Rolfe Winkler
Option ARMageddon
Lunchtime Links MLK Day
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McKinsey report on de-leveraging — pdf (McKinsey, ht Paul M) Lots of interesting charts. Conclusion is that debt reduction in the developed world has only begun. The Economist has a good summary too.
Why talking to yourself may be the highest form of intelligence (Just Seven Things) Smart post. I would add a related point, that the most effective study method is actually teaching. Students that must teach study partners a bit of material will engage it at a deeper level as they anticipate questions.
Wall St. weighs constitutional challenge to new tax (Dash, NYT)
New York Times ready to charge readers (Daily Intel) Felix has some thoughts on this, though he fails to defend his view that it’s “not smart business” to “cut users off from the website just for the sake of dealing with a nasty cashflow problem.” Explaining this particular point in detail would be helpful as “nasty cash flow problems” tend to, you know, put companies out of business. Still, Felix acknowledges that NYT needs to charge something in order to support content generation.
Bundles of cable (Surowiecki, New Yorker) Á la carte cable probably wouldn’t lead to lower bills for consumers. Instead, the channels that folks really watch –ESPN, e.g. — would end up taking a bigger piece of the pie.
Cruise ship docks at private Haiti beach for BBQ, water sports (BoingBoing)
Chavez nationalizes retailer (Crowe, DJN) The Venezuelan economy continues to rot from the inside out.
Elevated CO2 in school traced to students’ breath (WMUR) Apollo 13 anyone?
Why NBC breached Conan’s contract (Sklar, Mediaite)
Really fast roller coaster….(fast forward to 0:35)
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Rolfe,
McKinsey have failed once again (AOL – Time Warner anyone?)
McKinsey have performed a study on leverage, debt levels against Equity. They have done a lot of investigation and some good thinking.
They have failed totally to understand the flaw in their thinking.
The Equity value being used in the analysis is not worth the amount it is held at on the books – that goes for any asset except a few commodities. The net effect is that leverage rates are far higher than is reported.
Delevering will occur, everybody cheers. Then there will be some value discovery on the assets and the leverage will be as high or higher than at the start of the delevering.
This is a cyclic process and will take at least 3 cycles and 5 to 7 years to complete.
Fast Forward the video to 53, not 35 !
==RED