Category: finance

Bitcoins, Taxation and Hedges

I am referring to the two major bitcoin-related developments that happened this week of course. First, the first ever bitcoin swap agreement took place. It would work like this: An institution would ensure that a company accepting bitcoin for payment gets…

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TSLA Valuation Blues

Predicting the future is hard enough as it is, but if you’re doing it for a well-established, large company, then your task is significantly easier. The past will be a fairly decent predictor of the future (except when it’s not).…

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De Fault of the Government

Apologies for the bad pun above, but there’s a lot of talk about default, and the uncertainty has made investors sell off short-term Treasuries. From this week’s Wall Street Journal: Banks are dumping short-term government debt, usually one of the…

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Having Trouble With Your Forecasts?

You are not alone. This week’s Wall Street Journal has an article on how analysts “sober up,” and bring their optimism down a notch as the actual earnings announcements from companies come due. In each quarterly earnings announcement and the associated conference…

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The Paradoxical Stock Buyback

From 2004 through 2011 the S&P 500 companies spent $2.7 trillion buying back their own stock. A recent article in the WSJ discussed how companies tend to buy back their stocks when they are flush with cash, which usually happens during market boom…

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The TED Spread and Europe: Another Risk Premium

The TED spread is the difference between the three-month commercial interbank lending rate (LIBOR) and the three-month US Treasury bill yield. LIBOR is a rate that is used to measure the cost of bank-to-bank lending and borrowing.  The US Treasury…

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