Lehman Brothers Essays (Examples)

Financial Analysis of Lehman rother

Lehman rothers

The history has been full of financial collapses and financial scandals and one of the biggest financial collapses that a company has ever seen was that of Lehman brother. The collapse of a firm as huge as Lehman rother and a firm which has such great experience of over a hundred years lead the world into a shock. It created doubts in the minds of people regarding the condition of other financial institutions. The history of Lehman rother is rich which is further discussed.

The history of Lehman rother dates back to 1844, when a boy named Henry who was a 23-year-old son of a cattle merchant who immigrated to the United States from Germany and he settled in Alabama State of the United States where he opened dry goods store. In 1847, when Henry Lehman's elder brother arrived to Alabama, the firm…

Bibliography

1. Bebchuk, L.A., Cohen, A., & Spamann, H. (2010). The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008. Yale Journal on Regulation,27(2), 257+.

2. Blake, D. (2000). Financial Market Analysis. New York: Wiley. Cetorelli, N., Mandel, B.H., & Mollineaux, L. (2012). The Evolution of Banks and Financial Intermediation: Framing the Analysis. Federal Reserve Bank of New York Economic Policy Review, 1+.

3. Dwyer, G.P., & Tkac, P. (2009). The Financial Crisis of 2008 in Fixed Income Markets.Federal Reserve Bank of Atlanta, Working Paper Series, 2009(20), 1+.

4. Fitzpatrick, T.J., & Thomson, J.B. (2011). How Well Does Bankruptcy Work When Large Financial Firms Fail? Some Lessons from Lehman Brothers. Economic Commentary (Cleveland), (2011-23), 1+.

By re-characterizing the epo 105 dealing as a sale, Lehman detached the account from its balance sheet (Durden, 2010).

Lehman frequently augmented its utilization of epo 105 transactions in the time previous to reporting interludes to decrease its openly reported net leverage and balance sheet. Lehman's intermittent reports did not reveal the money borrowing from the epo 105 transaction, even though Lehman had in reality borrowed tens of billions of dollars in these dealings, Lehman did not reveal the acknowledged responsibility to pay back the liabilities. Lehman utilized the money from the epo 105 dealings to pay off other dangers, thus dropping both the entire debts and the entire assets accounted for on its balance sheet and decreasing its power percentages. Therefore, Lehman's epo 105 dealing was made up of a two-fold procedure: performing epo 105 dealings followed by the utilization of epo 105 cash borrowings to pay down debts,…

References

Durden, Tyler. (2010). The "Repo 105" Scam: How Lehman Fooled Everyone (Including

Allegedly Dick Fuld) and How Other Banks Are Likely Doing This Right Now. Retreived

April 10, 2011, from Web site:  http://www.zerohedge.com/article/repo-105-scam-how-lehman-fooled-everyone-including-allegedly-dick-fuld-and-how-other-banks-a 

Goldstein, Jacob. (2011). Repo 105: Lehman's 'Accounting Gimmick' Explained. Retreived April

According to Frank Ahrens (2010, April 20) not only did Lehmann Brothers hide this practice from the investing public, rating agencies, and government regulators, they even deceived their own board of directors. "In this way Lehmann reversed engineered the firm's leverage ratio for public consumption."

In 2008 analysts frequently asked about the means by which the company was able to achieve reduction in risk. Lehmann Brothers' company official reported reducing its leverage through the sale of less liquid asset categories claimed and simultaneously claimed they were trying to give the group a great amount of transparency on the balance sheet. (Ahrens, 2010, April 10)

Lehmann Brothers executives are currently under criminal investigation. Subpoenas in grand jury probes were issued as early as October, 2008. Andrew Clark (2010, March 12) reports the problem is that it isn't easy to prove fraud in many of these cases. A top law or accounting…

Resources

Ahrens, F. (2010, April 20). Lehmann brothers, the evil repo 105s and the danger of off-balance-sheet deals. washingtonpost.com, Retrieved on May 13,2010, from C:UsersOwnerDesktop

epo 105Economy Watch - Lehman Brothers, the evil Repo

105s and the danger of off-balance-sheet deals.mht

Clark, a. (2010, March 12). Lehman Brothers: Repo 105 and other accounting tricks.

Margin Call

The movie Margin Call recounts a fictionalized version of the fall of Lehman Brothers in the autumn of 2008. The story centers around the trading floor, the company's exposure to toxic mortgage-backed securities and its responses to these challenges. The movie discusses and provides a framework for analyzing a number of financial concepts. This report will use Margin Call to discuss a number of different microeconomic concepts that are seen in the movie.

Market Failure

Lehman Brothers is ultimately a story of market failure, so this is a natural starting point for this analysis. Marker failure occurs when the "quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers" (Investopedia, 2013). Market failure is evident in a number of ways, based on the story of the movie. For example, the traders are instructed to unload their positions in the toxic assets, but…

References

Investopedia. (2013). Market failure. Investopedia. Retrieved November 20, 2013 from  http://www.investopedia.com/terms/m/marketfailure.as

Improvements in Integrity, Financial Accountability, Ethical Conduct and Corporate Responsibilities under the Sarbanes-Oxley Act of 2002

e passed Sarbanes-Oxley in the wake of the Enron scandal to try to root out financial and accounting irregularities. How could similar irregularities occur at Lehman Brothers? History has a way of constantly repeating itself. -- Joseph Grant 2010

The high-profile corporate shenanigans by Enron and Lehman Brothers have made it clear that tough legislation was needed to compel Americans businesses to clean up their financial acts. Indeed, in response to Enron's late 2001 bankruptcy, Congress enacted the Sarbanes-Oxley Act of 2002 but the Lehman Brothers' bankruptcy in late 2008 made it clear that there was still a problem in some sectors of American business. This paper provides a review of the relevant literature to determine how the integrity of corporate finance, ethics, and other responsibilities have improved, what the corporate finance industry culture…

Works Cited

Bierstaker, James, Marshall, Kenneth K. And Greenwald, Jonathan. (2010, December).

"Strengthen Your Core: Are You Getting the Most from Your Compliance, Operations,

Risk, and Enterprise Support Functions?" Strategic Finance 92(6): 35-39.

Carter, Charles C. (2011, May 1). "Freefall: America, Free Markets, and the Sinking of the World Economy." Journal of Real Estate Literature 9(2): 492-499.

But amid the celebration, crucial opportunities have been lost: In September 2009, the "inspector general for the Troubled Asset Relief Program, a k a, the bank bailout fund, released his report on the 2008 rescue of the American International Group, the insurer. The gist of the report is that government officials made no serious attempt to extract concessions from bankers, even though these bankers received huge benefits from the rescue. And more than money was lost. By making what was in effect a multibillion-dollar gift to all Street, policy makers undermined their own credibility -- and put the broader economy at risk" (Krugman 2009). Many banks have given back their TARP funds, in exchange for the ability to once again engage in risky activities, to pay traders the bonuses they desire, and to pay executives what seems to be overinflated compensation. In June ten of the largest recipients of aid,…

Works Cited

Cohan, William. "A tsunami of greed." The New York Times. March 11, 2009.

December 8, 2009.

 http://www.nytimes.com/2009/03/12/opinion/12cohan.html 

"Credit Crisis." Special feature. The New York Times. Last September 22, 2009.

As Taibbi shows, it is not easy: "I'm going to say something radical about the Tea Partiers. They're not all crazy. They're not even always wrong. hat they are, and they don't realize it, is an anachronism. They're fighting a 1960s battle in a world run by twenty-first-century crooks" (Griftopia 16-17). Taibbi makes clear that the Tea Party is not even homogenous: it is made up of a broad spectrum of individuals (some of whom do not even want to be called Tea Partiers) who are angry and looking for someway to focus their anger.

In conclusion, recouping the losses is not an easy thing to do. hen a company like Lehman Brothers can be allowed to collapse while their competition (Goldman Sachs) can be bailed out by tax payer dollars, citizens are going to start wondering how their country got to such a point in the first place. Taibbi…

Works Cited

AP/HuffPost. Charles Ferguson's Oscar Speech Rips Wall Street: 'Inside Job' Director

Levels Criticism During Acceptance. HuffPost Business. Web. 8 Apr 2011.

Campbell, Andrea Louise. "Is the Economic Crisis Driving Wedges Between Young and Old? Rich and Poor?" Generations 33.3, Fall 2009: 47-53. Print.

Espo, David. "Deadline nears: Shutdown looms without agreement." Yahoo! News, 8

eaction to Proposal

The Financial Accounting Standards Board proposal is not written in stone yet. The main reason for this is that the Financial Accounting Standards Board is allowing for some time is to allow for investors and companies to provide their feedback to the Financial Accounting Standards Board regarding the current framework and feel of the proposals. The two main points of feedback asked for with the proposal is what people and investors think about the proposal and what would they prefer to happen to the rules and reporting requirements. The current deadline for the feedback is March 29th, 2013 (FASB, 2013).

Theoretical Model & Hypotheses

The basic question and issue being address by the Financial Accounting Standards Board as it relates to repurchase agreements is quite clear and is made much more so by consulting the Financial Accounting Standards Board documentation on the topic. They note that the…

References

Chircop, J., Vicky Kiosse, P., & Peasnell, K. (2012). Should Repurchase Transactions

be Accounted for as Sales or Loans?. Accounting Horizons, 26(4), 657-679.

doi:10.2308/acch-50176

Current Developments in the Private Sector. (2011). CPA Journal, 81(8), 37.

Deficiencies in Organizational Management That esulted in the Economic Meltdown

Since the onset of the global financial crisis, everyone wanted to know what happened and what caused the entire situation. Analysts, economists and experts have all come up with many different reasons and explanations for what triggered the meltdown. To some extent many of these are intertwined and connected to another. Organizations such as Bear Sterns, Lehman Brothers, Freddie Mac and Fannie Mae were flawed at similar regions. In other words, there was a common denominator that ultimately led to the crisis for all these corporations. A fundamental error which is present in nearly all of the organizations which were directly to blame for and were directly affected is the problem of governance and management within organizations. As the companies and firms were not managed in a sustainable and healthy manner, their minor everyday errors built up and lead to…

References

Berrone, P. (2008). Current Global Financial Crisis: An Incentive Problem. Occasional Paper,. [e-book] Madrid, Spain: Unversity of Navarra.  http://www.kantakji.com/fiqh/Files/Markets/p109.pdf  [Accessed: 30th July, 2013].

Buiter, W. (2009). Lessons from the Global Financial Crisis For Regulators And Supervisors.. [e-book] Available through: London School of Economics and Political Science  http://eprints.lse.ac.uk/29048/1/Lessons_from_the_global_financial_crisis.pdf  [Accessed: 30th July, 2013].

Clarke, T. (2010). Recurring Crises In Anglo-American Corporate Governance. Contributions to Political Economy, 29 pp. 9-32.

Kirkpatrick, G. (2009). The Corporate Governance Lessons from the Financial Crisis. Financial Market Trends, 1.

Nortel Case Study

Nortel Networks Corporation, more commonly referred to as Nortel, was a global company of Canadian origin that at its peak in the early 2000's had comprised of one-third of the total valuation of the companies listed on the Toronto Stock Exchange (TSX). Nortel was founded in 1895 in Montreal, Quebec, with its manufacturing headquarters currently located in Mississauga, Ontario. The company manufactured data networking equipment along with offering telecommunication services. It employed over 94,500 employees worldwide.

Nortel's troubles began in the 1990's when under CEO John Roth, the company expanded into the internet technology market. Roth used media to alter public perception of the company. The sale of the optic fibre networking gear by the company from then on was hyped up by the speculators in the market, driving the share price of the company up, even though the company failed to produce overall annual profits. This…

" The code also states when communicating investment information care must be taken to ensure that it is fair, accurate and complete as well as make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer.

Evidence indicates Lehman's senior financial executives knew of the Repo 105 transactions and certified the accuracy of Lehman's financial statements and disclosures despite having full knowledge that the company had engaged in the use of these transactions to hide their toxic assets and make their financial statements appear to be in good health when, in reality, they were not. These executives were fully aware that the financial statements were misleading and did not fairly present the true position of the company.

Hiding toxic assets and releasing favorable financial statements to investors each quarter clearly…

Works Cited

Ahrens, Frank. "Lehmann Brothers, the Evil Repo 105s and the Danger of Off-

Balance-Sheet Deals." Washingtonpost.com, 20 April 2010. Web. 18 March 2013.

"Code of Ethics and Professional Standards" CFA Institute, Vol. 2010, No. 14, June 2010. Web. 18 March 2013.

Jeffers, Agatha E. "Lehman Brother -- the Thin Line between Aggressive Accounting and Unethical Behavior." European Journal of Management, Vol. 11, Issue 4, Winter 2011. Web. 18 March 2013.

Once this has happened, the auditor is in a position to assess the risk of material misstatement in the financial statements. The auditor should consider, for example, management's selection and application of accounting principles in assessing the risk of fraud. Some red flags identified in the alert are when the transaction is overly complex; whether or not management has discussed the accounting of such transactions; if management is placing undue emphasis on accounting treatment of a transaction; if transactions involve third parties, including special purpose entities; and if the transactions do not have sufficient substance.

The alert prescribes a course of action for situations when an auditor believes that there is a significant risk of material misstatement. The auditor must identify his or her findings in an engagement completion document; document actions taken to address significant unusual transactions and must state the basis for the conclusions reached.

In the Lehman…

Estimation Techniques of Financial Crisis

The unquestionable ethical conducts within the corporate circle had been the major factor that led to 2008/2009 financial crisis. By studying the root causes of the crisis, it has been revealed that bad conducts among the CEOs of Bear Stearns, Lehman Brothers, Citigroup and Countrywide Financial have been the primary factors leading to 2008/2009 financial crisis.

Objective of this paper is to argue that the CEOs of Bear Stearns, Lehman Brothers, Citigroup and Countrywide Financial did not take the interest of the companies into a consideration leading to frictions between the CEO and the shareholders

In 2007, the financial markets were shaken by a serious financial crisis because of a dryness in liquidity associated with a subprime mortgage business where people with doubtful credit reports were offered mortgage loans leading to a rise of loan default. Moreover, lack of transparency, greediness and excessive desire for…

Reference

Gorton, G. B. (2008). The Subprime Panic, National Board of Economic Review, Working Paper 14398,

Larcker, D. & Brin, T. (2010). Lehman Brothers: Peeking Under the Board FaAade, Stanford Closer Look Series.

Tucker, E. (2014). Citigroup to Pay $7 Billion to Settle Subprime Case. Associate Press.

Wiggins, R.Z. Piontek, T. & Metrick, A. (2014). The Lehman Brothers Bankruptcy: Overview. Yale Program on Financial Stability Case Study.

With them saying in their first quarter 2008 earnings report that they had: a liquidity pool of $34 billion, unencumbered assets of $64 billion and $99 billion in regulated assets. At the same time they affirmed the Moody's credit rating of A1, on the basis of the company's capital basis and liquidity. (Kuhlengisa, 2008) This is problematic, because when looking at this statement and considering what would happen a few months later, it was obvious that managers / executives knew something was wrong. Instead of disclosing this fact to investors, they continued to play down the effects on its overall bottom line, until it could no longer be hidden. The way the accounting industry would help to perpetuate the collapse, is by having independent auditors making conservative estimates on those assets that were frozen. Using the Lehman rothers statement, the $64 billion in unencumbered assets was more than likely a…

Bibliography

Brown, B. (2009). The Wider Picture in the U.S.A. The Decline and Fall of Banking. (pp. 401 -- 431). Liecester: Matador.

Francis, J. (2000). Federal Investment Regulations. Shaums Outline of Investments. (pp. 86 -- 94). New York, NY: McGraw Hill.

Kuhlengisa, M (2008). Leham Brother Holdings First Quarter Conference Call. 123 Jump. Retrieved from  http://www.123jump.com/earnings-calls/Lehman-Brothers-Holdings-First-Quarter-Earnings-Call/26998/61 

Reed, D. (2010). What Happened and How did We get here? Decoding the New Mortgage Market. (pp. 1 -- 10). New York, NY: Abamacom.

The job in Structured Finance entails creation of financial vehicles to redirect cash flows to investors. Asset-backed Commercial Paper -- CP, collateralized bond obligations --CBOs and repackaged asset vehicles are the other growth areas. This job calls for a good blend of spreadsheet skills, accounting and legal expertise. Derivatives get their worth from options, swaps and futures which are instances of derivatives. This is a highly profitable business whose demand for skilled practitioners has been extremely high. Here the skills demanded are in mathematics particularly the stochastic differential equations. Advisory services are extended by the investment banks in favor of public and private banks participating in M&A & financing. This job demands evaluation of client's value, options for creation of value or on a client's industry conditions. (Investment Banking: Job Options)

eferences

Businesses. etrieved at http://www.lehman.com/business/. Accessed on 30 August, 2005

Corporate Finance: Salaries. etrieved at http://www.careers-in-finance.com/cfsal.htm. Accessed on 31…

References

Businesses. Retrieved at  http://www.lehman.com/business/ . Accessed on 30 August, 2005

Corporate Finance: Salaries. Retrieved at  http://www.careers-in-finance.com/cfsal.htm . Accessed on 31 August, 2005

Financial Planning. Retrieved at  http://www.morganstanleyindividual.com/planning/financialplanning/ . Accessed on 31 August, 2005

Goldman Sachs JBWere Private Wealth Management. Retrieved at  http://www.gsjbwere.com/products/default.cfm?p=AS_WerePrivate . Accessed on 30 August, 2005

"

This is significant because it shows how some critics of contrarian investing will often point to the various instances of speculation and assume that it is contrarian investing. In some cases the psychology of consumers can become so extreme, that the definition of what is speculative expands greatly. As a result, using contrarian investing in conjunction with other indicators / tools can help prudent investors and traders, be able to identify when the market condition are becoming more extreme.

Contrarian Indicators and Tools

When using the different contrarian indicators / tools in conjunction with one another, you can begin to see how this strategy can be used, to effectively determine if the market conditions are overbought or oversold. There are number of different tools that can be utilized to indentify major changes that are occurring in the trend of a stock or the market averages. These would include: headlines…

Bibliography

"3M Historical Prices," Yahoo Finance,  http://finance.yahoo.com/q/hp?s=MMM&a=00&b=2&c=1970&d=04&e=25&f=2010&g=v&z=66&y=0 

"3M Reports First Quarter Results," 3M, http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjA2NjEwOHxDaGlsZElEPTMzNDE0MXxUeXBlPTI=&t=1

"3M Reports Fourth Quarter and Full Year 2008 Results," 3M, http://library.corporate-ir.net/library/80/805/80574/items/322063/054431D4-6347-45F1-AF4D-85CCA5F89C52_mmmQ4release.pdf

"American Depository Receipt." Investopedia,  http://www.investopedia.com/terms/a/adr.asp

Frankfurter landed on the Harvard law faculty, thanks to a financial contribution to Harvard by Felix Warburg and Paul Warburg..." (Viereck, 1932; as cited by Mullins, 1984)

In the "Federal Reserve Directors: A Study of Corporate and anking Influence" as cited by The World Newsstand publication is that chart one "...reveals the linear connection between the Rothschilds and the ank of England, and the London banking houses which ultimately control the Federal Reserve anks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J.P. Morgan Co., and Kuhn, Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve ank of…

Bibliography

French, Douglas E. (1994) Separating Money and the State, Part I: Eighty Years of Destruction" October 1994. Online available at  http://www.fff.org/freedom/1094e.asp .

Mullins, Eustace (1982) Historical Beginnings...The Federal Reserve "The London Connection." The Federal Reserve Bank of Boston, 1982. Online available at http://www.apfn.org/apfn/reserve.htm.

Nathaniel Wright Stephenson (1930) Nelson W. Aldrich, A Leader in American Politics, Scribners, N.Y. 1930.

Charles A. Lindbergh, Sr. (1913) Banking, Currency and the Money Trust, 1913, p. 131

Thus it was confidence ebbed that had ebbed actual income. The Hiscox Wealth eview of 2009 found: "The recession has left its mark on the psyche of the Working Wealthy with a lack of confidence impacting their perceptions of wealth and appetite for risk. Whilst two in five (41%) say the recession has not had an impact on the amount of money they have to spend, almost an equal number (44%) say they are fearful of the future" (PN Newswire, 2009). But, observed Vanity Fair reporter tartly: "Most 60-year-old ex-Lehman Brothers bankers likely squirreled away enough to at least scrape by on a couple of million a year" (Shnayerson 2009, p.3). If they did cut back, it was in relatively minor ways: "Why should I pay $250,000 for a private plane," said one man to the magazine "when I can pay $20,000 to fly commercial first class" (Shnayerson 2009, p.1).…

References

Beattie, Keith. (2009). Industries that thrive on recession. Investopedia.

Retrieved December 10, 2009 at  http://www.investopedia.com/articles/stocks/08/industries-thrive-on-recession.asp?viewed=1 

Besharov, D., & Call, D. (2009). Income transfers alone won't eradicate poverty.

Policy Studies Journal, 37(4), 599-631. Retrieved December 10, 2009, from ABI/INFORM Global. (Document ID: 1905094061).

Big to Fail by Andrew Ross Sorkin

Andrew Ross Sorkin's book Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System -- and Themselves (Viking, 2009) presents a dramatic and informative account of the disastrous collapse of some of the nation's largest, wealthiest, and oldest financial firms on Wall Street. The book details the complex negotiations involving the heads of Lehman Brothers, Goldman Sachs, and officials in the federal government, some of whom had long previous relationships with those firms before assuming public-sector positions of trust. In some respects, that aspect of the story told by Sorkin may be the most significant as well as the least thoroughly investigated.

Specifically, U.S. Treasury Secretary at the time was Henry "Hank" Paulson, previously the CEO at Goldman Sachs was legally obligated to limit any involvement with his old firm after taking office in…

Mr. Taubman had other worries. Maybe they were being used to help Lehman goose its stock price? "If I were their guys, I'd want to put my own spin on this."

In combination, those passages (and other hints throughout the book) leave wide open the question about whether or to what degree the Treasury Secretary honored his legal obligation.

If there is a weakness to Sorkin's work, it might be that it fails to provide a more detailed explanation of the underlying problems throughout the financial derivatives market that gave rise to the problems responsible for Lehman's and Goldman Sach's and AIG's predicaments. By contrast, Michael Lewis's The Big Short: Inside the Doomsday Machine (W.W. Norton, 2010) and Moneyball: The Art of Winning an Unfair Game (W.W. Norton, 2011) both do a better job of explaining how mechanisms devised in those firms (such as so-called "credit default swaps") that were designed very specifically to circumvent regulatory policies prohibiting taking out insurance on certain kinds of investment outcome losses (Lewis, 2010; 2011). It was precisely those decisions that laid the groundwork for the risk environment exploited by Goldman Sachs and AIG that ultimately triggered their collapse and that almost took down the entire American economy when the housing bubble burst, virtually instantaneously obligating the issuers of those non-insurance types of insurance policies against the drop in mortgage derivatives to make good on those agreements (Lewis, 2010; 2011). While Sorkin presents a dramatic look into the interpersonal exchanges and relationships at the center of the circumstances leading up to the infamous Wall Street bailout, works such as those by Lewis do a better of job helping lay readers actually understand how those events actually occurred.

Sorkin's book does a good job of giving the details on what happened among Lehman Brothers, Barclays, JP Morgan, Goldman Sachs, the Fed, and Big Gov following the collapse. Essentially, everyone had egg on his face -- but some of the bigger powers had the muscle to save face -- and sink competitors at the same time: which is exactly what Goldman Sachs did to Lehman. Goldman had been placing its cronies in the hite House for years -- and it would now go through the hite House to see who got bailed out and who did not. AIG got one -- because it owed a large chunk to Goldman (who had figured out the game ahead of time and started betting against itself by buying insurance through AIG). Sorkin's work is a work full of the kind of details that other writer's like Taibbi and Lewis do not take…

Works Cited

Lewis, Michael M. The Big Short: Inside the Doomsday Machine. New York, NY: W.

W. Norton & Company, 2010. Print.

Sorkin, Andrew. Too Big to Fail: the inside story of how Wall Street and Washington

fought save the financial system -- and themselves. New York, NY: Penguin, 2010. Print.

Since, this one lacks structure means that many employees can become confused about their responsibilities. Once this occurs, it can often lead to employee issues, where this confusion can become an issue of contention between the staff and management. As management is telling them to engage in particular activity, yet they don't understand why they are doing such tasks. Over time, this can cause moral to drop as those employees who do not thrive under such a system, begin to lower the overall positive attitude in the work environment. ("Contingency Theory," 2010)

Despite some of the obvious weaknesses, the contingency theory is effective for those organizations that are small. This is because the in formalized structure allows managers / owners the opportunity to adapt to changes that are occurring in real time. Where, they can use their experience and common sense to adjust to various business conditions. As a result,…

Bibliography

Building Emotional Capital. (2004, June 24). Retrieved April 10, 2010, from Executive Education website:  http://executive.education.insead.edu/programme/documents/Nissan_004.pdf 

Contingency Theory. (2010). Retrieved April 9, 2010, from Values-Based Management website:  http://www.valuebasedmanagement.net/methods_contingency_theory.html 

Babineck, M. (2006, March 13). The Enron Trial. Retrieved April 10, 2010 from Chron website:  http://www.chron.com/disp/story.mpl/special/enron/3718892.html 

Bissonette, Z. (2008, August 1). How Does General Motors CEO Rick Wagoner Still Have a Job. Retrieved April 10, 2010 from Blogging Stocks website:  http://www.bloggingstocks.com/2008/08/01/how-does-general-motors-ceo-richard-wagoner-still-have-a-job/

" To that end, the Treasury Department would limit executive compensation for institutions receiving "exceptional assistance" (Geithner and Summers, 2009).

Troubles continued in the financial sector -- both Citigroup and the Bank of America needed second rounds of capital infusions, and federal guarantees against losses totaling tens of billions more -- while Ben S. Bernanke, the Federal Reserve chairman, warned that more capital injections might be needed to further stabilize the financial system. On Jan. 16, the Senate voted 52-42 to release the second round of funds (Gerth, 2009).

THE GEITHNER PLANS -on Feb. 10, Mr. Geither presented the rough outlines of the Obama administration's plan. A central piece of the proposal would create one or more so-called bad banks that would rely on taxpayer and private money to purchase and hold banks' bad assets. Another centerpiece of the plan would stretch the last $350 billion that the Treasury has…

fr). 2005).

FSB's holdings in Hansabank were 98% (Swedbank 2005). In 2007, Hansabank controlled 62% of the entire Baltic (Estonia, Lithuania and Latvia) card market which is located in a small, but quickly developing market which has a high amount of savings and low credit card usage. The 2006-year, as predicted was a particularly good year for Hansabank. They were first among banks in the credit card market in the Baltic and had the largest sector of the deposit market at 32% to back things up (Hansabank/Swedbank 2007 13).

Needless to say, the market research before entering potential markets is critical in predicting how much of a gamble is involved in that market penetration. The market research prior to the entry into the Nordic and Baltic markets was extensive and meticulous and paid off nicely the next year in 2006.

E. Performance During the ecession

Even good companies have their…

References

BBC. (2010). UK Bank Barclays Reports Profits up 92% to £11.6bn . Available:  http://news.bbc.co.uk/2/hi/8517438.stm . Last accessed 14 Dec 2011.

Barclaycard. (2011). Barclaycard Timeline. Available:  http://www.barclaycard.com/what-we-do/timeline.html . Last accessed 14 Dec 2011.

BBC. (2011). Barclays Profits Fall by a Third. Available:  http://www.bbc.co.uk/news/business-14368974 . Last accessed 14 Dec 2011

Business Case Studies. (2011). Barclays Bank. Available:  http://www.sap.com/uk/about/success/casestudies/barclays.epx . Last accessed 14 Dec 2011.

Despite the fact that it also required heroic efforts on the part of Congress and the President, Time even gives credit to Bernanke for the $700 billion Troubled Asset elief Program (TAP) (Grunwald 2009, p.4).

Many, if not most of these decisions were profoundly unpopular and cost both the Obama and Bush Administration as well as Congress a great deal of political collateral. The relatively isolated Bernanke did not have to suffer such a risk in the court of public opinion, and even today critics of these policies ask: what of moral hazard? Supporters of the TAP and other aggressive government measures would counter that worshipping at the altar of moral hazard, caused the fall of Lehman Brothers and the freezing up of the microcredit market in the first place. But once the expectation of bailouts are created, one bailout tends to lead to another -- the bailout of Bear…

References

Grunwald, M. (2010, January). Ben Bernanke: Person of the year. Time Magazine.

Retrieved January 3, 2010.

 http://www.time.com/time/specials/packages/article/1,28804,1946375_1947251,00.html 

Thoma, Mark. (2009, December 21). Is criticism of Bernanke justified? Moneywatch.

.." The Federal Reserve continues to keep a watch on both "current and potential exposures..." And are in the process of a review of the collateral valuation methods of the banking industry." (Kohn, 2008)

Kohn states that disruptions in liquidity in some financial markets have resulted in banking organizations facing challenges and specifically at present "significant liquidity demands can emanate from both the asset and liability of the bank's balance sheet." (Kohn, 2008) Kohn relates that when liquidity is reduced in the markets specifically for "certain structured credit products the creation of challenges and concerns relating to valuating spreads into other sectors and "illiquidity in some credit markets may make it difficult for some market participants, including banking organizations, to hedge positions effectively." (Kohn, 2008) Kohn states that the banking industry in the U.S. is up against some very serious challenges however, the Federal Reserve in cooperation with banking agencies…

Bibliography

Berger, Allen N.; and Bouwman, Christa H.S. (2007) Bank Liquidity Creation. 15 Jan 2007

Brown, Ellen (2008) April Fools: The Fox to Guard the Banking Henhouse 30 Mar 2008. Online 'The Web of Debt' available online at  http://www.webofdebt.com/articles/banking-henhouse.php 

Buiter, Willem (2008) Lessons from Northern Rock: Banking and Shadow Banking. VOX. 4 March 2008. Online available at  http://www.voxeu.org/index.php?q=node/960 

Estrella, Arturo (2002) Securitization and the Efficacy of Monetary Policy. Economic Policy Review. Vol. 8 No.1 Federal Reserve Board Bank of New York. Online available at  http://www.newyorkfed.org/research/epr/02v08n1/0205estr/0205estr.html#chart1

The article that was written by Conley (2011) discusses the impact that collateralized debt obligations (CDO's) would have upon the subprime loans. These were created in 1987, by the Wall Street firm Drexel urnham. In this product, the investment bankers would take a number of different articles and combine them together as one investment. The various assets that were used included: junk bonds, mortgages and other high yielding investments from the debt. The idea with these different products is that the investment bank could offer customers a stated return on their investment. The way it worked is the brokerage firm would distribute each investor, the stated amount of returns that they would make off of the tranche (the CDO investment). This was derived using a complex mathematical formula that would divide the total amount of interest that was received, from the various high yielding products that were inside the CDO.…

Bibliography

Case Study, 2011, Investopedia. Available from: [14 February 2011]

Citi Merger a Mistake, 2008, Huffington Post. Available from: [14 February 2011].

Deregulation Redux, 2011, FCIC. Available from: {14 February 2011].

Derivatives, 2011, Financial Dictionary. Available from: [12 February 2011].

The U.S. is a property owning civilization and a number of the people wanted land and housing. Americans however scarcely ever create savings. "The country itself lives on other countries' savings by issuing bonds to finance its excessive consumption. The current crisis began with cheap housing loans offered by banks. Banks provided loans but instead of holding the loan in their books, they packaged them into collateralized debt obligations (CDOs) and sold them to other agencies. These agencies passed them on to others and spread them globally as assets" (the Current Economic Crisis, its causes, its impact and possible alternatives, 2009).

Interest rates were lowered and housing loans went up with construction activities leading to land prices increasing. The real estate was booming, generating employment and incomes. But as the rate of interest on housing loans came down, banks started to compete to get more business. Because of low interest…

References

Avizius, R. 2009. Financial Crisis Big Picture: What has the Government Response Been? [ONLINE] Available at:  http://www.marketoracle.co.uk/Article9229.html . [Accessed 22 May 2012].

Centeno, M.A. & Cohen, J.N. 2012. The Arc of Neoliberalism. [ONLINE] Available at:  http://www.yale.edu/macmillan/transitionstomodernity/papers/CentenoCohen.pdf . [Accessed 22 May 2012].

Crotty, J. 2009. Structural causes of the global financial crisis: a critical assessment of the 'new financial architecture' . [ONLINE] Available at:  http://cje.oxfordjournals.org/content/33/4/563.full . [Accessed 22 May 2012].

Esteva, G. (n.d.). The Meaning of the Global Crisis and "Recovery" for Study Abroad: What are we Preparing Students for? [ONLINE] Available at:  http://digitalcollections.sit.edu/cgi/viewcontent.cgi?article=1110&context=faculty_symposium . [Accessed 22 May 2012].

Williams - Case Analysis

Williams -- Case Analysis

Why is Williams considering a $900 million one-year loan from Warren Buffett and Lehman Brothers?

Williams is a company based in Tulsa whose business operations are energy related, including exploration and production, energy trading, pipelines and telecommunications. In the present, the company is suffering from deterioration in the energy markets as a result of the crash and decline of Enron, in addition to pressure on profit margins in the telecommunications business sector due to oversupply and investigations by regulators with regard to suspected financial indecencies. Williams is considering a $900 million one-year loan from Warren Buffett and Lehman Brothers because of a number of reasons.

To begin with, an oversupply in the telecommunications business sector has resulted in deterioration in the profits generated as well as margins generated within the industry, which in turn, has instigated several players within the industry to…

References

Atrill, P. & McLaney, E. (2013). Accounting and finance for non-specialists. 8th Ed. Harlow, UK: Pearson Publishing.

Christensen, H. B., & Nikolaev, V. V. (2012). Capital versus performance covenants in debt contracts. Journal of Accounting Research, 50(1), 75-116.

Big Fail" title a recent book a movie HBO. It refers bailout major financial institutions began 2008, time concern,, United States fall a depression aid. For purpose discussion I include bailout General Motors Chrysler.

Too big to fail

In the second half of 2007, the real estate sector in the United States of America showed the first signs of weakness. Devaluations were gradually observed and the investments made in the field came to lose value. The problem was mainly represented by the fact that the population did not afford the properties, but the financial institutions had traded in money as it had already been reimbursed. The bubble eventually burst and the financial institutions were the first to suffer the major hit.

In Too big to fail, the focus falls on the bankruptcy of Lehman Brothers, based on the recurrent assumption that it was this bankruptcy which onset the unfolding of…

References:

Maggs, J., 2010, Criticism of TARP persists, Politico,  http://www.politico.com/news/stories/1010/42995.html  last accessed on November 14, 2011

Weiner, M., 2009, Biggest mistake of the financial crisis: Lehman Bros. Bankruptcy, Politics Daily,  http://www.politicsdaily.com/2009/09/15/biggest-mistake-of-the-financial-crisis-lehman-bros-bankruptcy  / last accessed on November 14, 2011

2011, Troubled Asset Relief Program, Investopedia,  http://www.investopedia.com/terms/t/troubled-asset-relief-program-tarp.asp  last accessed on November 14, 2011

Too big to fail, HBO Movie, Directed by Curtis Hanson, based on a book by Peter Gould and Andrew Ross Sorkin

Economic Globalization

Has the 2008 financial meltdown in the U.S. And the ongoing economic crisis in Europe have practically ended the era of economic globalization?

Following the financial crisis that marred the U.S. economy along with other global economies as well as the ongoing Eurozone debt crisis, there have been projected concerns that this predicament would end economic globalization. The purpose of this paper is to assess this claim. Going by Immanuel Wallenstein's World Systems Theory, the political economy of Third World economies and developed economies of the West are mutually dependent. Wallenstein's conjecture is that the growth and expansion of Third World economies relies on constant interaction with Western developed economies seeing as the world is characterized by a structural division of labor where the developing nations of the Third World provide cheap labor and raw materials while the developed economies are the holders of capital and controllers of…

References

Ebrahimi, H, 2012, "John Lewis warns Amazon's tax avoidance 'will drive UK companies out of business" The Telegraph

Held, David; The Open University, eds. (2004). A Globalizing World?: Culture, Economics, Politics (2nd ed.). London; New York: Routledge, in association with the Open University. p. 84.

Katz, I & Christie, R (2011) "Geithner Called Housing Giants Biggest 'Moral Hazard'" Bloomberg

Lynch, Katherine (2003). The Forces of Economic Globalization. Kluwer Law International

Hansel & Krahnen (2007) conducted a study that noted the equity beta of banks engaged in the marketing of CDOs increased relative to banks that did not market CDOs. This again highlights the risk associated with CDOs, especially given that the impact on the firm's beta was more pronounced in smaller, less well-capitalized banks.

hile CDOs introduced more risk into the banking system, they also encourage more risk in the credit markets. CDOs accomplished this by providing a secondary market for credit assets. There was only a limited secondary market for low-grade corporate debt and for subprime mortgages prior to the rise of CDOs (Deng, Gabriel & Sanders, 2008). The increase in the amount of subprime loans granted in the U.S. correlates with an increase in the availability of a secondary market for such debt in the form of CDOs. In turn, this encourage the adding of more subprime debt…

Works Cited:

Barnett-Hart, a. (2009). The story of the CDO market meltdown: An empirical analysis. Harvard College. Retrieved May 1, 2011 from  http://www.hks.harvard.edu/m-rcbg/students/dunlop/2009-CDOmeltdown.pdf 

Deng, Y.; Gabriel, S. & Sanders, a. (2008). CDO Market implosion and the pricing of CMBS and sub-prime ABS. Real Estate Research Institute. Retrieved May 1, 2011 from  http://www.reri.org/research/article_pdf/wp150.pdf 

Hansel, D. & Krahnen, J. (2007). Does credit securitization reduce bank risk? Evidence from the European CDO market. Gothe University Frankfurt. Retrieved May 1, 2011 from  http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID967430_code120211.pdf?abstractid=967430 

Lannin, S. (2011). Lehman expected CDO market to worsen. ABC News. Retrieved May 1, 2011 from  http://www.abc.net.au/news/stories/2011/03/22/3170054.htm

Economists call this 'moral hazard,' where individuals have an incentive to behave recklessly because they know they will not be punished for their mistakes" (Interview, Der Spiegel, 2009).

The obvious response to such allegations is that the failure of Lehman Brothers which precipitated the collapse of the world's markets indicates what can transpire when something that people expected to be backed by a government is allowed to flounder. Lehman felt certain that the U.S. government would and could bail it out, just as it had similar companies in the past. Now the government is afraid NOT to extend aid to failing institutions, given what transpired post-Lehman.

So the cycle continues -- assurance of no need to suffer moral hazard results in a collapse of an industry (or government), the institution is shored up because it is too dangerous to let it fail, which results in the revivification of a dangerously…

Works Cited

"Did foreign reserves help weather the crisis?" IMF Survey Online. October 9, 2009.

October 19, 2009.

 http://www.imf.org/external/pubs/ft/survey/so/2009/NUM100809A.htm 

"IMF Moves to Boost Resources to Combat Global Crisis." IMF Survey Online.

Today, even the local gas station and supermarket use computer technology and applications that are much more advanced in their capability than the computer systems used to launch and recover the first generation of spacecraft (Evans, 2004; Kaku, 1997).

Modern computer applications perform calculations and allow analyses of very high volumes of information that far exceed the capacity of direct monitoring by human operators (Larsen, 2007; Nocera, 2009). That is not necessarily inherently problematic; in fact, it is incredibly beneficial in too many ways to count. Today, international manufacturers and shippers can pinpoint the location of goods thousands of miles away in real time; supply chain managers in one office can monitor stock throughout hundreds of retail and wholesale outlets electronically and automatically adjust output and shipping schedules to match their rates of sale at the local level (Evans, 2004; Larsen, 2007). However, the interdependence of modern life in general…

References

Baker, W., Hylender, C., Valentine, J. (2008). Verizon Business Data Breach

Investigation Report. Retrieved October 22, 2008, from:

 http://www.verizonbusiness.com/resources/security/databreachreport.pdf 

Ballezza, RA. "The Social Security Card Application Process: Identity and Credit Card Fraud Issues." The FBI Law Enforcement Bulletin; Vol. 76, No.5.

ite Aid Fraud

Over the years, there have been numerous cases of financial fraud perpetuated within the organizational mainstream of major companies. Financial fraud is often a well-coordinated sort of white-collar crime that often -- but not always - requires complicity and collusion amongst financial accountants, top management and auditors. ite Aid came to the limelight after the U.S. Securities and Exchange Commission announced that it would be filing accounting fraud charges against the company in 2002

Meanwhile, the United States Attorney for the Middle District of Pennsylvania leveled similar criminal charges accusing former CFO Frank Bergonzi, former CEO Martin Grass and former Vice Chairman Franklin Brown of perpetuating an immense accounting fraud scheme

. Compounding the crisis, according to former ite Aid COO, Timothy Noonan, were years of legal coaching amongst staff and mid-level employees. As investigations ensued, evidence of fraudulent manipulation of accounts, corporate malfeasance, and financial overstatement…

Reference List

Carlin, Wayne M. & Pennington, Nelson "SEC Announces Fraud Charges Against Former Rite Aid Senior Management" Security and Exchange Commission 2002

Federwisch, Anne Exploring Ethical Lapses during the Rite Aid Crisis Santa Clara University: Center for Allied Ethics, 2002

Jennings, Marianne Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns Before it's Too Late Arizona State University W.P. Carey School of Business, 2007

Carlin, Wayne M. & Pennington, Nelson "SEC Announces Fraud Charges Against Former Rite Aid Senior Management" Security and Exchange Commission 2002

As banks faltered and default rates rose, rates of consumption and demand plummeted. Unemployment began to increase, and in a predictable Keynesian fashion, as individuals grew more insecure about their job prospects they began to spend less money. The United States has a particularly consumer-driven economy -- Americans are known for having historically low rates of savings and to engage in high rates of spending -- so this was particularly disruptive to the usual rhythms of the economy.

Young people graduating from college suffered some of the worst effects of the recession. "Unemployment rates for individuals younger than 25 are currently 21% in the euro area and 19% in the U.S." (Branchflower 2010). They were competing with older, more experienced workers who had recently lost their jobs. The fear is that today's low starting salaries create a class of permanently low-earning graduates, many of whom have high levels of college…

Works Cited

Branchflower, David G. "Credit crisis creates Lost Generation." Bloomberg Business.

January 21, 2010. August 28, 2001.

 http://www.bloomberg.com/news/2010-01-22/credit-crisis-creates-lost-generation-david-g-blanchflower.html 

Ferguson, Niall. "Where did all the money go?" From the Great Hangover. Edited by Graydon

Collateralized loans will have demonstrably greater security than uncollateralized loans.

While these measures seem sound and will hopefully ensure that no institution will be penalized for making the types of loans that are necessary for the international economy to remain functional, much still needs to be done in exercising oversight over the practices that lead to the failure of Lehman Brothers in the first place. A lack of transparency in financial dealings remains a concern, and there are still a variety of financial instruments that are poorly regulated -- moreover, the precipitous drop in interest rates orchestrated by the Fed to stimulate the economy could give rise to yet another crisis of over-borrowing and widespread consumer debt. Greater regulation and oversight is necessary as well as greater insurance of debt.

eference

Press release. (2008, December 18). The Federal eserve. etrieved November 18, 2009

http://www.federalreserve.gov/newsevents/press/other/20081219a.htm

Reference

Press release. (2008, December 18). The Federal Reserve. Retrieved November 18, 2009

 http://www.federalreserve.gov/newsevents/press/other/20081219a.htm

Toward the end of the decade, Wall Street investment firms began hiring PhDs in mathematics and physics to create incredibly complex algorithms capable of modeling elements of the stock and futures markets. In most cases, the creators of these algorithms knew next to nothing about the financial industry, and the executives who employed them knew (literally) nothing about the mechanisms their firms had begun to rely on for their trading strategy. Destabilization of the Home Mortgage Industry:

In the early 1970s, stock analysts at Salomon Brothers, another Wall Street investment firm, developed a new kind of security based on home mortgages, called mortgage-backed securities. In principle, this allowed the conversion of illiquid (i.e. non- tradable) assets like the debt represented by home mortgages to be converted into a tradable commodity for profit. This new form of commercial transaction evolved into incredible levels of complexity after the widespread incorporation of mathematical…

References

Phillips, Kevin. "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism" New York: Viking (2008).

On the other hand, the need to promote productivity exerts pressure in favor of incentive schemes that have the foreseen consequence of material inequality (Ibid., 8). Yet, none of these policies exist in a vacuum -- instead, the synthesis of economic tendrils and market fluctuations act in congruence to a larger paradigm of causality -- one that takes on an almost philosophical regimine.

his ideology would be little more than rhetoric for Secretary Paulson and the Bush Administration, who would operate with a much clearer intent to benefit the irresponsibility of bank owners and administrators. his would be initiated during Paulson's tenure with Goldman-Sachs, when he would help to broker the conditions by which America's banks could lend frivolously to high-risk loan candidates. Simultaneously, banks were being allowed to voluntarily abide or resist reasury oversight requiring such firms to demonstrate the reserve funds to back up these loans. (ong, 1)…

This ideology would be little more than rhetoric for Secretary Paulson and the Bush Administration, who would operate with a much clearer intent to benefit the irresponsibility of bank owners and administrators. This would be initiated during Paulson's tenure with Goldman-Sachs, when he would help to broker the conditions by which America's banks could lend frivolously to high-risk loan candidates. Simultaneously, banks were being allowed to voluntarily abide or resist Treasury oversight requiring such firms to demonstrate the reserve funds to back up these loans. (Tong, 1) With the initiation of the sub-prime mortgage crisis, where countless home and business owners found themselves unable to contend with skyrocketing interest rate terms, the banking system collapsed. (Brinsley, 1)

After helping drive these destructive policies, Paulson was appointed to the Secretary of Treasury office, where he adapted a new position in support of massive government interventionism. To some accusers, Paulson may be said to have authored independent of oversight the largest 'bailout' in U.S. history. The Wall Street Journal would report a price tag on the Emergency Economic Stimulation Act as totaling over $700 billion, much of it going through the Troubled Assets Relief Program [TARP] and into the coffers of the banks and financial firms which have created the current turmoil. (Shindelar, 7). Paulson's commitment to the procedure he used to sell all his stocks at Goldman's and his effort to reach some outcomes states the uneasiness about the ethical misconduct which is evident due to the fact that Paulson was a senior member of the government and also his former company was collapsing. Paulson assisted both Bear Sterns and Lehman Brothers - direct the competitors of Goldman Sachs. Indeed, the choice to let Lehman collapse and bail out American International Group trading associates was baffling to members of congress and the market affiliates (Clemmens, 2009). Although Paulson had no financial gain in Goldman Sachs the company had to excel. Paulson was questioned about the part he played in making Goldman Sachs get $13 billion in taxpayer funds as an outcome of bailout of the American International Group (Gretchen, et.al., 2009).

When AIG collapsed, for instance, it would cost billions of dollars to its attendant relationship

This was able to guarantee the company a steady and sustainable growth, encouraging a constant profitability over this period of time.

Further more, the company is well-known for its principles of improving its performances and attempting to be more efficient in everything it does. Throughout its existence, the American retailer has focused on implementing information technology techniques in almost all its activities as the common belief was that automatization drives lower costs, lower prices, lower inventory, shorter delivery time and so on. Following these principles religiously, Wal-Mart has become one of the most efficient players in the entire American market, not just in its industry. Efficiency then was logically driving higher productivity rates and increased profitability for the shareholders.

Part D Company Report

The American retail market is dominated by 3 major players: Wal-Mart, Target and Kmart (see table 2). In 2005, the WalMart's market share was 8.82% increasing 0.2%…

Bibliography

WalMart 2006 Annual Report. On the company's website, last retrieved on September 2, 2007

Fortune 500 (2007),  http://money.cnn.com/magazines/fortune/fortune500/2007/ 

Hale, T. (2004), "Understanding the Wal-Mart Shopper," Consumer Insight Magazine,  http://www2.acnielsen.com/ 

Lehman Brothers (2002), "Wal-Mart Stores - it's All About the Lil' Smokies!," Global Equity Research, www.lehman.com

1-6 Summary

The accounting convergence project of the FASB and IASB has proceeded slowly, despite a new deadline of 2014 from the SEC. There remain several key issues that are bogging down the conversion process. This dissertation will outline where American public companies stand on this issue. It will attempt to ascertain how much they understand about the convergence process and how prepared they are for full conversion to international financial reporting standards.

orks Cited:

AICPA. (2010). IFRS primer for audit committees. AICPA. In possession of the author.

American Bar Association (2010) Program: International financial reporting standards: Implications of accounting convergence for business lawyers. American Bar Association. Retrieved November 2, 2011 from http://www.americanbar.org/content/dam/aba/publishing/business_law_today/buslaw_blt_content_2010_11_0005.pdf.

Barth, M., Landsman, ., Lang, M. & illiams, C. (2011). Are IFRS-based and U.S. GAAP-based accounting amounts comparable? Stanford University orking Paper No. 78.

Bratton, . (2011). Heedless globalism: The SEC's roadmap to accounting convergence. University of…

Works Cited:

AICPA. (2010). IFRS primer for audit committees. AICPA. In possession of the author.

American Bar Association (2010) Program: International financial reporting standards: Implications of accounting convergence for business lawyers. American Bar Association. Retrieved November 2, 2011 from  http://www.americanbar.org/content/dam/aba/publishing/business_law_today/buslaw_blt_content_2010_11_0005.pdf .

Barth, M., Landsman, W., Lang, M. & Williams, C. (2011). Are IFRS-based and U.S. GAAP-based accounting amounts comparable? Stanford University Working Paper No. 78.

Bratton, W. (2011). Heedless globalism: The SEC's roadmap to accounting convergence. University of Cincinnati Law Review. Vol. 79 (2) 470-498.

Economic Behavior

Berkshire Hathaway

It will be fun to follow Bershire Hathaway because Warren Buffett is a mastermind at selecting companies in which to invest and I have never had the time to really learn about his holdings.

Berkshire Hathaway, Inc. is a publicly owned investment manager in the property and casualty industry of the finance sector (Yahoo Finance, 2011). Essentially, the firm is a holding company with a variety of businesses across the globe (Yahoo Finance, 2011). In the beginning, the company was just a group of textile mills, but Warren Buffett got the controlling shares in the mid1960s and began to divert cash flows (float) from the core businesses and invest the money in other types of businesses (Yahoo Finance, 2011). Berkshire Hathaway's subsidiaries engage in the business of insurance and reinsurance of property and casualty risks (Yahoo Finance, 2011).. The firm was founded in 1889 and is…

References

Farrell, M. (2011, August 26). Buffett's one-day win on Bank of America: $357 million. CNN Money. Retrieved  http://money.cnn.com/2011/08/26/markets  / warren_buffett_bofa_profit/index.htm?iid=EL

Farrell, M. (2011, September 26). CNN Money. Retrieved  http://money.cnn.com/2011/09/ 

26/markets/buffett_berkshire_buyback/index.htm

Berkshire Hathaway, Investopedia. Retrieved  http://www.investopedia.com/terms/b/berkshire-hathaway.asp#ixzz1ajECr68Z

Iceland's Economic Crisis

Web

Iceland's bankruptcy

The purpose of banking in Iceland: speculation and hedging

The central issue: too much too soon

Iceland's Transition

eplicating Wall Street

Taking on foreign "assets" at a ratio to GDP of 10:1

Is debt an asset?

Easy credit and the role of the Housing Financing Fund

Low interest rates

f. Inflation

g. The end of short-term financing in the wake of Lehman's collapse

h. The bubble bursts

The plight of the average citizen

j. Aliber's speech

k. Left holding the bag

The effects of financial deregulation

A prime opportunity for shorting

Iceland and Nationalization

Not Bailing out the Banks

Introduction: Statement of Purpose

The bankruptcy of Iceland in 2008 can be explained in one line from Michael Lewis's Boomerang: Travels in the New Third World. The line is stated by a representative of the International Monetary Fund (IMF) who is tasked with assessing whether…

References

Aliber, R. (2011). Preludes to the Icelandic Financial Crisis. UK: Palgrave

Christiansen, L. (2011). Iceland: Geyser Crisis. Preludes to the Icelandic Financial

Crisis. UK: Palgrave: 89-106.

Danielsson, J. (2008). The first casualty of the crisis: Iceland. The First Global

What the world needs today is an effective global banking system and a strong and sustainable trade relationship. The recent world recession reflects the collapse of the global banking system. This was the result of heavy advancement of loans and cumulative rates of interest that were collected on those loans, which led to economic growth in the short-term but economic collapse in the long-run. It is the time for the global powers to take the world economists and political leaders on board and make an effective decision on the creation of a banking system that offers loans to nations which are in urgent need of financial assistance such as Nigeria, Uganda and other African countries. The authority that looks after such banking system should ensure a balance between the First world and the third world in order to ensure that the world economy grows smoothly.

Cutting down public spending is…

References

World Trade Organization (1999). The WTO as the basic free trade institution: Ministerial Conference 1999. Retrieved from  http://www.wto.org/english/thewto_e/minist_e/min99_e/english/state_e/d5325e.pdf 

World Trade Organization (n.d.). About the WTO. Retrieved from  http://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm 

International Monetary Fund (2010). How the IMF promotes global economic stability. Retrieved from  http://www.imf.org/external/np/exr/facts/globstab.htm

High-road competition focuses on service quality (Working for America Institute 2004), which means developing property in prime locations and the regular upkeep and upgrade of property. Hotels using high-road competition charge high room rates but provide top-class amenities, satisfying customer service and on-site attractions, such as restaurants, lounges, conference sites, gift shops and concierge service to attract customers and incline them to spend. Upper segments are likelier to engage in high-road competition and lower segments, in low-road competition. Hotels in the limited-service segments must differentiate themselves from low-cost providers by offering better service, while upper-upscale and upscale hotels must reduce costs to increase or maximize profit (Working for America Institute). The amount and quality of service in the upper segments allow them to charge higher prices and to directly reward investment.

The high-road strategy may, however, not be conducive to the level of productivity that owners and managers would want,…

Bibliography

Hospitality Online. Hyatt Hotel Corporation. Property Portfolio, 2004.  http://profiles.hospitalityonline.com/20920/properties.html 

Corporate Profile, 2004.  http://profiles.hospitalityonline.com/209120.html 

MKG Consulting. MKG Presents the Worldwide Ranking of Hotel Groups - Worldwide Supply of Hotel Groups Grows by 3% in 2001. Hospitality.Net, 2004.  http://www.hospitalitynet.org/news/4012180 

Worldwide Supply of Hotel Groups - a Total of 5 Million Rooms, Up by 1.9% in 2002. Hospitality Job Resource, 2004. http://www.hoteljobresource.com/menu/article6450.html

Conclusions -- Was TAP Necessary -- A five member Congressional committee echoed a number of criticisms regarding TAP that many consumers, academics, and fiscal analysts were considering. What exactly was the Treasury's strategy with the $700 billion dollars for the supposed bail out? How can Treasury explain the significant gaps in their ability to find hundreds of billions of taxpayer money? In a nutshell, it appears that the departments that control the money given by the Congress (from the American people) have no ability to ensure that the bailed out banks will do what was needed and lend money; have no real standards of measuring success of failure of the program; and for ignoring pointed and specific questions from Congress about their performance (M. Crittenden).

The fact that many of the institutions bailed out with TAP funds, funds from the American taxpayer, did not distribute these funds back into the…

REFERENCES and WORKS CONSULTED

"2007 Public Company Bankruptcies Surpassed, According to BankruptcyData.com." 17 September 2008. AllBusiness.Com. 11 April 2010  http://www.allbusiness.com/company-activities-management/financial-performance/11564300-1.html 

Andrews, E., et.al. "Fed's $85 Billion Loan Rescues Insurer." The New York Times 16 September 2008:  http://www.nytimes.com/2008/09/17/business/17insure.html?_r=1&hp .

Bardeesy, Karim. "Bailout Baloney." 2 October 2008. The Big Money from Slate. 11 April 2010  http://www.thebigmoney.com/articles/juicy-bits/2008/10/02/bailout-baloney 

Bucznski, Richard. "Economic Crisis: When Will It End?" 2010. IBIS World. 9 April 2010  http://www.ibisworld.com/recession2009/

The reality was that a company which aspired to be "the No. 1 stock on all Street" was instead steadily bleeding money while claim growth in the billions.

The pressure placed upon accountants at ordCom was reflective of the pressure facing accountants throughout the economy during this period of widely absence securities oversight. Indeed, the relationship between regulation and accounting is essential, and this diminished link would have catastrophic implications for the profession as a whole. Such is shown by the Scott text, which tells that "efficient securities market theory has major implications for financial accounting. One of these is that supplementary information in financial statement notes or elsewhere is just as useful as information in the financial statements proper. Another is that efficiency is defined relative to a stock of publicly known information. Financial reporting has a role to play in improving the amount, timing, and accuracy of this…

Works Cited:

Kaplan, R.S. & Kiron, D. (2007). Accounting Fraud at WorldCom. Harvard Business School.

Scott, W.R. (2006). Financial Accounting Theory, 4th Ed. Pearson-Prentice Hall.

Skeel, D. (2005). Icarus in the Boardroom: The Fundamental Flaws in Corporate America and Where They Came From. Oxford University Press.

Cultures of greed, corruption and misrepresentation helped to facilitate a massive transfer of wealth, substantial enough to suggest that a denial of awareness on the part of personnel at such organizations is nothing short of implausible. Therefore, we can presume that an absence or real protections for would-be whistleblowers in private enterprises would help to accommodate a wave of corruption every bit as destructive to the public as any government indiscretion such as the histleblower Protection Act was designed to address.

Beyond this, there are indications that the federal legislation lacks the proper mechanisms even to serve as a template for that which might address the failures in private regulation. The article by Fischer (1991) provides myriad examples in which exceptions and clauses relating to the histleblower Protection Act have made it essentially toothless. Specifications such as that which denotes that only certain 'covered employees' qualify for the protections afforded…

Works Cited:

Fisher, B.D. (1991). Whistleblower Protection Act of 1989: A False Hope for Whistleblowers. Rutgers Law Review, 43(355).

Government Accountability Project (GAP). 2009). Whistleblower Protection Act & Amendments. Whistlblower.org.

U.S. Department of Labor (USDoL). (2008). The Whistleblower Protection Program. OSHA.

U.S. Securities and Exchange Commission (SEC). (1989). Whistleblower Protection Act Information. SEC.gov.

George W. Bush

George Walker Bush is the second man in the history of the United States to have followed in his father footsteps and become the President. Bush served two consecutive terms as President, starting with January 2001. He was born in 1946 in New Haven, Connecticut, but most of his childhood, he spent in Midland, and then his teenage years in Huston, Texas. George W. Bush was the first child born in George and Barbara Bush's family. At the time of his birth, his father was an undergraduate at Yale (Bush, A Charge to Keep, 15). George W. Bush enrolled at the same university where his father studied and received a BA in history there. ater, he graduated from Harvard, receiving a MBA at Harvard Business School, in 1975. Between his studies at Yale and Harvard, Bush activated as a pilot in the Texas Air National Guard (The…

Lobe, Jim. The Bush Team Reloaded. Middle East Report, No. 234 (Spring, 2005), pp. 10-16 Published by: Middle East Research and Information Project

King, D.S. Edwards III, G.C. The Polarized Presidency of George W. Bush. Oxford University Press, 2007

Hamilton, W. Bush Began to Plan War Three Months After 9/11. Washington Post. April 17, 2004; Page A01

EU nations have blamed deregulation in the U.S. sector for the credit crisis and subsequent recession, specifically the complex risk exposures not fully understood and assessed by banks and investors; poor and fraudulent underwriting standards; lack of investor and agency due diligence; a failure of transparency; and the structure of compensation schemes and incentives in the U.S. banking industry (Griffin 2008). The failure of the U.S. capital adequacy standards was apparent when even U.S. banks that possessed what would, under normal circumstances be adequate capital reserves were taxed in the subsequent panic, after Lehman Brothers was not 'bailed out' by the U.S. government and many lenders demanded a return on their investments.

The EU has always had more stringent liquidity risk management system. The current system requires all banks to have liquid assets that cover 100% of potential outflows over am eight-day period and 90% of potential outflows over a…

References

Capital adequacy. (2009). The Business Dictionary. Retrieved November 8, 2009 at  http://www.businessdictionary.com/definition/capital-adequacy.html 

Griffin, Conor. (2008, July 8). Basel II: Capital adequacy regulations and the credit crisis -- cause or cure? Chartered Accountants. Retrieved November 8, 2009 at htp://www.charteredaccountants.ie/Members/Technical1/Financial-Services/Accountancy-Ireland-Articles/BASEL-II-CAPITAL-ADEQUACY-REGULATIONS -- THE-CREDIT-CRISIS-CAUSE-OR-CURE/

Risk-based capital guidelines; capital adequacy guidelines; capital maintenance: Asset-backed commercial paper programs and early amortization provisions. (2003, October).

Retrieved November 8, 2009 at  http://www.bankinfosecurity.com/html/risk-based-baselii-meeting-summary.html

The second purpose of the $700 purchase of troubled assets is to create a market for the securitized versions of these assets. As a result of the crisis, the market for these assets became illiquid. The value of securitized debt obligations became near zero, which severely impacted the balance sheet of all banks that held these assets. By creating a secondary market for these products, the government hopes to increase their value. This will improve the balance sheets of the banks.

The second key clause in TARP is that banks selling troubled assets to the government are required to give the government warrants. This, in theory, protects the government from losses. The theory is that the banks will see an increase in value as a result of the government's efforts, allowing the government to profit from the warrants.

Ancillary to TARP was the FDIC's excusing of troubled assets in its…

Works Cited:

Dash, E. & Sorkin, a. (2008). Government seizes WaMu and sells some assets. New York Times. Retrieved November 3, 2009 from  http://www.nytimes.com/2008/09/26/business/26wamu.html 

Smith, a. & Yandle, B. (2009). Too big to fail, read, count or stop. Cato Institute. Retrieved November 3, 2009 from  http://www.cato.org/pubs/regulation/regv32n2/v32n2-11.pdf 

McIntire, M. (2009). Bailout is a windfall to banks, if not to borrowers. New York Times. Retrieved November 3, 2009 from  http://www.nytimes.com/2009/01/18/business/18bank.html?_r=2&pagewanted=1 

White, L. (2009). Federal Reserve policy and the housing bubble. Cato Journal. Retrieved November 3, 2009 from  http://www.cato.org/pubs/journal/cj29n1/cj29n1-9.pdf

2009).

Engle (2009) also notes that the costs of compliance in both monetary and human terms are greatly reduced by a willingness to embrace the regulation as a tool rather than shunning it as a "necessary evil." Though stating the obvious, he says what many in the business world simply couldn't bring themselves to hear just over a year ago, namely that "smart managers approach compliance before there is a problem that impacts the company and its stakeholders" (Engle 2009, p. 18). The issues at Bear Stearns and Lehman Brothers could have been prevented with regulation, but those at Enron and WorldCom were exacerbated by outright fraud, and the regulations provided by the Sarbanes-Oxley Act would have prevented such egregious mistreatment and mis-management of the company and its shareholders.

Strangely, the detection and prevention of fraud is not a benefit often perceived in the regulations of the Sarbanes-Oxley Act by…

References

Chang, H.; Choy, H.; Cooper, W.; Parker, B. & Ruefli, T. (2009). "Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes-Oxley Act." Socio-economic planning sciences 43(4), pp. 221-8.

Engle, P. (2009). "Making compliance effective." Industrial engineer 41(8), p. 8.

FEI. (2008). "FEI Survey: Average 2007 SOX Compliance Cost $1.7 Million." Financial Executives International. Accessed 25 September 2009. http://fei.mediaroom.com/index.php?s=43&item=204

High CEO salaries and bonuses reinforce that sense of specialness.

hat is emotional intelligence? How is it related to leadership? How is emotional intelligence related to different leadership traits? hat leadership traits might prevent corruption, or promote it? How might training and development in the area of emotional intelligence and leadership prevent corruption and unethical behavior from developing in organizations?

Emotional intelligence is often called 'people smarts,' or the ability to motivate individuals, to make them want to do what they must do, rather than to merely order them to 'do it.' A lack of emotional intelligence or empathy can lead to ham-fisted management, and to the bullying of employees. A good manager is interested in collaboration, and believes in the value of employee involvement in the company's decision-making processes. A lack of emotional intelligence generates hostility between different organizational branches and levels, and discourages suggestions and valuable input from…

Works Cited

Nahavandi, A. (2006). The art and science of leadership (4th ed.). Upper Saddle River, NJ:

Pearson Prentice-Hall.

At the core of the economic argument is Schumpeter's theory of creative destruction. In his seminal economic work, Capitalism, Socialism and Democracy, Schumpeter (1942) argued that innovation is the process by which economic growth occurs. At times, this means that old, established technologies and companies must be destroyed, but that the net effect will be beneficial. This sentiment runs counter to the theory that the economy would be better off if GM were saved. The economic costs might be high today -- the $150 billion or more figure is not disputed -- but that in the long-run the benefits would outweigh these costs.

In a later elaboration, it was demonstrated that big business turnover specifically resulted in smaller government, stronger rule of law, less bank dependence, stronger shareholder rights and greater transparency (Fogel et al., 2008). Bailing out General Motors therefore harms the economy because it stifles growth and innovation,…

Works Cited:

Krisher, Tom & Thomas, Ken. (2008). Advocates: Automaker bailout essential. Associated Press. Retrieved April 30, 2009 from  http://www.azcentral.com/business/articles/2008/11/12/20081112biz-automakers1113-ON.html 

Langfitt, Frank. (2008). Automakers Lobby Pelosi for Bailout Cash. NPR. Retrieved April 30, 2009 from  http://www.npr.org/templates/story/story.php?storyId=96713932 

Ross, Brian & Rhee, Joseph. (2008). Big Three CEOs Flew Private Jets to Plead for Public Funds. ABC News. Retrieved April 30, 2009 from  http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1 

Karnitschnig, Matthew; Solomon, Deborah; Pleven, Liam & Hilsenrath, Jon E. (2008). U.S. To take over AIG in $85 Billion Bailout. Wall Street Journal. Retrieved April 30, 2009 from  http://online.wsj.com/article/SB122156561931242905.html

At the same time, one also needs to consider that after the economic depression of 1929, it wasn't until 1945 that the economy could be considered as having resumed the same levels as before.

The authors point out that a slower growth (and a slow recovery) may be what the world economy actually needs, because it would be a more sustainable growth and it would allow the developing countries to correlate the macroeconomic mechanisms with this economic growth. Nevertheless, in my opinion, a slower recovery in the U.S. will have a negative impact on all the countries that use the U.S. As their main commercial partner.

ibliography

1. The Great American Slowdown. Economist.com. On the Internet at http://www.economist.com/opinion/displaystory.cfm?story_id=11016333.Lastretrieved on March 20, 2009

The Great American Slowdown. Economist.com. On the Internet at http://www.economist.com/opinion/displaystory.cfm?story_id=11016333.Lastretrieved on March 20, 2009

Bibliography

1. The Great American Slowdown. Economist.com. On the Internet at  http://www.economist.com/opinion/displaystory.cfm?story_id=11016333.Lastretrieved  on March 20, 2009

The Great American Slowdown. Economist.com. On the Internet at