| Blog Review 575 |
 |
 |
| Written by Netsmith | |
| Tuesday, 22 April 2008 | |
|
This is one way of looking at it: that the banks themselves are issuing new shares means that they think they are over-valued. On bank and financial market regulation: should it be rules based or principles based? Praise for the design of the credit market bail out. How regulation has been effected. For example, marijuana wasn't made illegal in the US: you just had to have a licence and they wouldn't issue any licences. Comparing the costs of locking up people from an area with the costs of policing an area to prevent the crime and thus the need to lock people up. That decline in Russian oil production might not be peak oil you know? And finally, imaginary animals, kosher or not? plus winning a caption competition.
Bookmark
Comments (5)
Too good to be true
written by Ian Mansfield, April 22, 2008
When a website with a story about a funny slogan appears to be too good to be true - I run over to Snopes to see what they say about it.
http://www.snopes.com/business/deals/carnation.asp
Selling Stock
written by Global Economist, April 22, 2008
If a company is selling stock, there is more to it than whether the companies underlying common stock is undervalued or overvalued. Selling stock is one of several options in which companies raise cash. What they do with the cash is their option. Unfortunately, these “jokers” have mismanaged their assets so much that they need the cash to cover their bad bets. Typically, follow on offerings such as the banks are doing these days are not a good sign. The decision on how to raise cash is based on the Weighted Average Cost of Capital for the firm. Essentially, it has now become cheaper for these distressed companies to sell stock to raise capital vs. issue bonds or take out loans. The opposite happens when companies are flush with cash and have little to no projects to improve the company’s earnings...they buy back stock or issue a higher dividend. Hopefully, we will have learned from our mistakes. Is this likely, no, but there is always hope. Oh and BTW regulation will not fix this problem. “Old men’s rules are no match for young men’s ingenuity.” Christopher Aber
Write comment
This content has been locked. You can no longer post any comment.
|
Subscribe to this comment's feed
About the ASI
The Adam Smith Institute is the UK's leading innovator of free-market economic and social policies. Politically independent and non-profit, the Institute promotes its ideas through reports, briefings, events, media appearances, and its website and blog. For further information, click here.Join our email list
Keep up-to-date with the latest events, reports and information from the Adam Smith Institute by joining our fortnightly email list. It's free and you can unsubscribe at any point. Just enter your email address here:
