| ...ironically, she got her bachelor's in women studies and wants to get her masters in family and marriage counseling ;-) Here's the link to the story. |
Monday, 22 September 2008
Girl Selling Her Virginity to Pay for College...
Posted on 11:34 by Unknown
Lehman, Money Market Funds, and the Government Guarantee Controversy
Posted on 08:36 by Unknown
Before this week, most people probably thought of money market funds as ultra-safe places to park cash.
While money market mutual funds aren't FDIC insured like money market accounts at banks, they can only invest in "safe", short-term commercial paper with an average maturity of 90 days.
The funds work to keep their value per share at a constant $1. "Breaking the buck", or having a loss, was something avoided at all costs. If, on occasion, a paper dropped slightly in value, the fund's holding company would buy it from its fund at par.
In return for this safety of principle, investors willingly accepted yields lower than stocks or bonds.
Now, in the wake of Lehman's collapse, one of the original pioneers of money market funds, Reserve Management, wouldn't (or couldn't) buy back its Primary Fund's investment in Lehman paper.
Instead, the Primary Fund wrote off $785 million in Lehman debt, and its value per share dropped to 97 cents.
It became the first money market fund to "break the buck" in 14 years, and shareholders withdrew 60% of the assets in 2 days. The fund since delayed investor redemptions by 7 days.
Even though money markets remain one of he safest investments, and most of the money market fund companies (such as Vanguard, Fidelity, Merrill Lynch, or Schwab) have many times the resources of Reserve Management, investors started to become worried about money market funds.
On Thursday, Putnam Investments closed its $12 billion Prime Money Market Fund after its institutional clients pulled their money out.
On Friday, to calm the markets, the Treasury took the unusual step of temporarily guaranteeing money market funds against losses up to $50 billion.
Needless to say, the American Bankers Association is very unhappy. They saw their FDIC coverage as a competitive advantage for their money market accounts vs. money market funds.
While money market mutual funds aren't FDIC insured like money market accounts at banks, they can only invest in "safe", short-term commercial paper with an average maturity of 90 days.
The funds work to keep their value per share at a constant $1. "Breaking the buck", or having a loss, was something avoided at all costs. If, on occasion, a paper dropped slightly in value, the fund's holding company would buy it from its fund at par.
In return for this safety of principle, investors willingly accepted yields lower than stocks or bonds.
Now, in the wake of Lehman's collapse, one of the original pioneers of money market funds, Reserve Management, wouldn't (or couldn't) buy back its Primary Fund's investment in Lehman paper.
Instead, the Primary Fund wrote off $785 million in Lehman debt, and its value per share dropped to 97 cents.
It became the first money market fund to "break the buck" in 14 years, and shareholders withdrew 60% of the assets in 2 days. The fund since delayed investor redemptions by 7 days.
Even though money markets remain one of he safest investments, and most of the money market fund companies (such as Vanguard, Fidelity, Merrill Lynch, or Schwab) have many times the resources of Reserve Management, investors started to become worried about money market funds.
On Thursday, Putnam Investments closed its $12 billion Prime Money Market Fund after its institutional clients pulled their money out.
On Friday, to calm the markets, the Treasury took the unusual step of temporarily guaranteeing money market funds against losses up to $50 billion.
Needless to say, the American Bankers Association is very unhappy. They saw their FDIC coverage as a competitive advantage for their money market accounts vs. money market funds.
Business Lesson: How NBC's "The Biggest Loser" Reverse-Engineering a Weight-Loss Brand
Posted on 07:51 by Unknown
The Chicago Tribune business section recently had an article about a 4 year old reality show on NBC called "The Biggest Loser" - in which overweight people compete to see who can lose the most weight.
Reality shows tend to use product placement on their shows to make money. In the case of "The Biggest Loser", however, the producers turned down placement offers from the major weight loss brands - such as Weight Watchers, Jenny Craig, etc.
Instead, they are now starting to advertise their own products.
It turns out that, from the beginning, the show was planned to not just rely on a television advertising model. Instead, they had a new business model in mind - to build a major weight loss brand in reverse.
The traditional brands - like Jenny Craig and Weight Watchers - built up their brands, products, centers, etc. first, and then advertised on television.
The "Biggest Loser" will do the opposite. It started off as a TV show and they are now trying to expand into a brand with its own products.
Consumers have already spent $50 million on the current line of "Biggest Loser" products - fitness videos, cookbooks, a weight-loss club, and products in NBC's online store (scales, socks, etc).
Next to roll out will be branded exercise equipment, kitchen stuff, and protein powder. Future possibilities include meals delivered to your doorstep, yoga mats, exercise balls, etc.
Reality shows tend to use product placement on their shows to make money. In the case of "The Biggest Loser", however, the producers turned down placement offers from the major weight loss brands - such as Weight Watchers, Jenny Craig, etc.
Instead, they are now starting to advertise their own products.
It turns out that, from the beginning, the show was planned to not just rely on a television advertising model. Instead, they had a new business model in mind - to build a major weight loss brand in reverse.
The traditional brands - like Jenny Craig and Weight Watchers - built up their brands, products, centers, etc. first, and then advertised on television.
The "Biggest Loser" will do the opposite. It started off as a TV show and they are now trying to expand into a brand with its own products.
Consumers have already spent $50 million on the current line of "Biggest Loser" products - fitness videos, cookbooks, a weight-loss club, and products in NBC's online store (scales, socks, etc).
Next to roll out will be branded exercise equipment, kitchen stuff, and protein powder. Future possibilities include meals delivered to your doorstep, yoga mats, exercise balls, etc.
Friday, 19 September 2008
Lehman, Merril Lynch, and AIG Lead to The "Unbubble"
Posted on 08:58 by Unknown
I recently heard a description of the current financial situation as an "unbubble".
I think this is appropriate because it does seem that, like in a bubble, emotion is starting to get ahead of fundamentals.
They say that there are 2 main emotions in trading / investing: fear and greed.
Well, in a bubble, greed wins out over fundamentals, and the markets eventually come back to earth.
In this "unbubble", it looks like fear is starting to win out over fundamentals. For example, the remaining 2 independent investment banks (Morgan Stanley and Goldman Sachs) are relatively healthy, but are seeing their stock punished, and are being "pushed" into the idea of merging with commercial banks.
I think it is still wise to steer clear of most financial stocks, but this is probably a good time to start looking to buy good stocks in other sectors of the economy.
As they say, the big money is made by buying when there is "blood in the streets".
I think this is appropriate because it does seem that, like in a bubble, emotion is starting to get ahead of fundamentals.
They say that there are 2 main emotions in trading / investing: fear and greed.
Well, in a bubble, greed wins out over fundamentals, and the markets eventually come back to earth.
In this "unbubble", it looks like fear is starting to win out over fundamentals. For example, the remaining 2 independent investment banks (Morgan Stanley and Goldman Sachs) are relatively healthy, but are seeing their stock punished, and are being "pushed" into the idea of merging with commercial banks.
I think it is still wise to steer clear of most financial stocks, but this is probably a good time to start looking to buy good stocks in other sectors of the economy.
As they say, the big money is made by buying when there is "blood in the streets".
Tuesday, 16 September 2008
Quote for the Day
Posted on 07:56 by Unknown
|
Monday, 15 September 2008
Programming vs. Management
Posted on 09:11 by Unknown
| A man in a hot air balloon realized he was lost. He reduced altitude and spotted a woman below. He descended a bit more and shouted, 'Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don't know where I am.' The woman below replied, 'You're in a hot air balloon hovering approximately 30 feet above the ground. You're between 40 and 41 degrees north latitude and between 59 and 60 degrees west longitude.' 'You must be a programmer,' said the balloonist. 'I am,' replied the woman, 'How did you know?' 'Well,' answered the balloonist, 'everything you told me is technically correct, but I've no idea what to make of your information, and the fact is I'm still lost. Frankly, you've not been much help at all. If anything, you've delayed my trip.' The woman below responded, 'You must be in Management.' 'I am,' replied the balloonist, 'but how did you know?' 'Well,' said the woman, 'you don't know where you are or where you're going. You have risen to where you are due to a large quantity of hot air. You made a promise, which you've no idea how to keep, and you expect people beneath you to solve your problems. The fact is you are in exactly the same position you were in before we met, but now, somehow, it's my fault.' |
Friday, 12 September 2008
How To Become Rich
Posted on 12:11 by Unknown
In his Personal Financier blog, Dorian had a post entitled Coming To Terms with Never Getting Rich – A Look at the Pre-Requirements.
In this post, Dorian does a good job of describing the traits needed to become wealthy in business.
However, he then seems resigned that he is not strong in those areas and, therefore, will never be rich.
I commented that Dorian could surprise himself, and improve his abilities in those traits, by thinking in terms of yoga or physical stretching.
In the comment, I paraphrased from my post entitled Stretch Out of Your Comfort Zone, which is on my Tao of Simplicity blog.
In this post, Dorian does a good job of describing the traits needed to become wealthy in business.
However, he then seems resigned that he is not strong in those areas and, therefore, will never be rich.
I commented that Dorian could surprise himself, and improve his abilities in those traits, by thinking in terms of yoga or physical stretching.
In the comment, I paraphrased from my post entitled Stretch Out of Your Comfort Zone, which is on my Tao of Simplicity blog.
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