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China Faces "Minsky Moment" on Ponzi Financing

MishTalk

Inquiring minds are tuning into a report on the Ponzi finance setup in China. Our analysis indicates that China’s economy has arrived at that unstable state where speculative and Ponzi finance appear to dominate. Most assume China can grow at 7% a year, a notion that I have challenged on many occasions. Morgan Stanley agrees.

Finance 73
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A Refresher on Payback Method

Harvard Business

” And that’s exactly what the method shows you, says Knight: “The time it takes for the cash flow from the project to return the original investment.” Say, for example, the cash flow for the project was actually $3,000/year in Year 1 and nothing thereafter. Finance & Accounting Article.

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What We Lose When Giant Investment Funds Run All Our Companies

Harvard Business

But there has been a shift in how these entities are governed, one that has gone unnoticed in the outcry over executive pay packages, tax inversions, offshoring, and other controversies. They mean that I can have the rights to the cash flows from a company’s shares without owning the share itself. Capitalism needs owners.

Company 70
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What GE’s Board Could Have Done Differently

Harvard Business

Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cash flow drain from years of problematic acquisitions, divestitures, and buybacks. The Board Had No Finance Committee. in 2013 to 3.7 in early 2018, according to Moody’s.

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Housing Starts in China Plunge 25%; Did China's Property Bubble Finally Burst?

MishTalk

In the latest sign, housing starts plummeted 25 percent in April from a year ago, the Chinese government announced on Tuesday. The unregulated shadow banking sector has played a strong role in the recent credit boom, with the share of credit growth financed by the sector rising from 11 percent in 2006 to 32 percent in 2013.

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The Case for Stock Buybacks

Harvard Business

” The UK Government is launching an inquiry into buybacks , due to concerns that they “may be crowding out the allocation of surplus capital to productive investment.” A comprehensive survey of financial executives concluded that “repurchases are made out of the residual cash flow after investment spending.”

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Small and Young Businesses Are Especially Vulnerable to Extreme Weather

Harvard Business

Firms applied for credit to finance recovery. Despite the need for credit to finance recovery, disasters can also constrain the capacity of lenders to supply it because so many households and businesses are affected at once. Challenge risk financing conventions. Businesses likely need new forms of risk financing.