Finance and Funds Flow

In August of 2007, then Federal Reserve Chairman Ben Bernanke told Congress that the subprime crisis would be contained.  We went on to have the Great Financial Crisis GFC), of which the subprime crisis was just one cockroach. Now we’re facing another financial crisis- potentially worse than the GFC- caused by another 15 years or […]

It started in May of 1984 when Continental Illinois Bank failed.  And was rescued.  People were saved from having made a bad investment.  So much for moral hazard- the idea that investing is a risk, which has evolved to be not the case in “too big to fail” companies. We know what happened.  More and

On October 31, I posted an article called “What’s Wrong with Capitalism?” After a couple of paragraphs of me ranting and raving there was a link to an article that described what Ben Hunt calls the “financialization of Texas Instruments.  It was disturbing to a few people I heard from and, I hope, to some

Well, uh, nothing actually.  Okay, not nothing.  Some things- sure.  There’s no perfect system.  But the real problem is that what we actually have is less and less like real capitalism.  Adam Smith’s invisible hand and Schumpeter’s idea of creative destruction have both taken it on the chin.  Quantitative easing, low to negative interest rates,

Last Wednesday Shopko, a general merchandise retailer with 333 stores, filed for chapter 11 bankruptcy.  On January 17th, SGB Media published an article on Shopko and the filing by Thomas J. Ryan with the title, “Shopko Becomes Latest Casualty Of Online Disruption.” I took umbrage at the suggestion that online disruption was the primary cause

Once upon a time, way back in 2003, an investment bank could only have leverage of up to twelve to one. In 2004, the Security and Exchange Commission gave five investment banks, and only five, the ability to leverage up to 30 or 40 times or so. Guess which five they were? I almost don’t want to bother

If your only business is snowboarding, you need money for three reasons. First, your business should grow at least as fast as the industry, and that growth translates into more cash tied up in the business. Second, extreme seasonality and the extended dating customers are demanding requires more working capital. Finally, tough competitive conditions are probably reducing margins,