Friday, June 29, 2012

Who's Heading into Finance, 2012?


Over 85 Consortium first-year MBAs this year indicated an interest in finance or financial services. That is within the range of what CFN has observed over the past four years--typically a range from 80-90, about a quarter of the total number of Consortium first-year MBA students in 2012.

In the aftermath of the financial crisis and amidst the occasional turbulence since then, many would swear the numbers of those expressing interest in finance would have declined over the years. MBA students, we are finding out, continue to have varying levels of interest in financial services. But most of them are less eager to rush to Wall Street to become associates in mergers & acquisitions at a big bank. The opportunities they dreamed of while applying are not always evident when recruiting season starts. And some, after they learn the process and procedures to secure Wall Street jobs, are reluctant to play the hard ball it sometimes takes to get there:  lotteries, informational interviews, technical interviews, and rounds and rounds of sweltering sessions with senior bankers. 

That's not to say Consortium MBAs aren't adequately represented on Wall Street. Year after year, many do find spots within the investment-banking corridors of Goldman Sachs, Merrill Lynch, Barclays, and JPMorgan. They thrive there, too.

Among the 85 or so, interests this year, as in recent years, vary from private equity to community banking, real estate (yes, even after that debacle in recent years), corporate banking, financial consulting, private banking, asset management and energy finance. MBA students in finance in 2012 know they must evaluate opportunities carefully and always make sure they have plenty of options. The recruiting game changes too often, too quickly and too vigorously. Not even the best, most experienced MBA students can become too confident or comfortable.

In this year's first-year class, it's no surprise that 14 from NYU-Stern will explore finance. But NYU is not the finance leader this year, as it tends to be among Consortium classes. At Cornell, 16 have expressed an interest in finance, eight at Rochester, and five each at Yale, Virginia, and Emory. (At least two from each of the 17 Consortium schools said they intended to study, explore or pursue finance.)

These numbers will likely change, just as students' interests and ambitions change. Opportunities in 2013 and how they present themselves this fall will either boost these numbers or cause them to dwindle. Seemingly remote factors as Europe in crisis and a presidential election, believe it or not, can have a direct impact on how many MBA associates banks, insurance companies and industrial companies will hire for the summer, 2013. How students survive finance, accounting and capital markets courses will have impact, too.  The 85 could blossom to 100 or dwindle to 60 by graduation, 2014.

The same numbers above often tend to be under-stated, as some students have many interests and may not yet be comfortable selecting one concentration before school starts.  These are the large numbers of MBA students interested, for example, in both finance and marketing, finance and economics, finance and corporate strategy, finance and international business.

Stay tuned, as students discover what they really want to be and do and as the finance industry evolves and rumbles along.

Tracy Williams

See also:

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Insolvency and UK’s Battle Against Debt

The credit crisis that currently grips the UK shows no sign of abating and the sheer size of debt in the country is astronomical. Insolvency numbers are expected to rise as debt levels have tripled over the last decade. Licensed insolvency practitioners are preparing to help thousands of struggling people solve their debt problems.

The current financial state of the UK doesn’t make pleasant viewing and it is affecting consumers up and down the country. Insolvency levels are fully expected to reach record highs this year and a report has shown that young people are amongst the most financially vulnerable in the UK due to the level of debt that they have accrued.

Insolvency – The debt cycle

Financial experts often suggest that an individual voluntary arrangement is a good way for people with high levels of debt to tackle their problems. Debt problems in the UK are getting to the stage where the threat of insolvency or bankruptcy looms large over a vast proportion of the population. The studies conducted by building societies discovered that apart from rent and mortgages, interest upon debts has become the largest single outgoing for those under 35. This invariably leads to spiralling debts and insolvency may occur for many who find repayments impossible. However, those within the financial industry have seen individual voluntary arrangements successfully guide many away from the precipice of debt.
Debt Images

The credit card culture of consumers in the UK has seen levels of debt reach unsustainable levels. The financial fallout from this will be record numbers of insolvency in 2012 as people struggle to stay on top of their finances and become unable to meet the repayments demanded by their creditors. In many cases, individuals will opt for an individual voluntary arrangement (IVA) in order to solve their monetary woes and stave off the threat of insolvency.

Insolvency – A Numbers Game

The sheer scale of debt in the UK is testament to the spending culture of Briton’s and has reached a point at which it becomes impossible for the lending to continue in such an unrestricted manner. By the end of the second quarter of 2007, the size of consumer debt in the UK was an unprecedented £1.345 trillion, which outstripped the annual gross domestic product by some £15 billion. This financial discrepancy will have the effect of increasing the number of insolvency cases in the UK as people can no longer sustain their spending levels. An IVA is often utilised by those in debt as it can ward off the threat of bankruptcy and it is a legally binding contract between the individual and their creditors to pay back their debt at a level within their means.

Insolvency – Taking Financial Risks

The levels of debt in the UK and the way in which people spend at a level beyond their means is causing a massive debt gulf which will swallow a record number this year as insolvency levels are set to skyrocket. Speaking to the Daily Mail, Mark Allen, a financial expert spoke of the precarious situation of people’s personal finance, “It's not uncommon these days to see some individuals with unsecured debt upwards of £50,000 spread across four or five credit cards and a mortgage on top of that. These people are balancing on a perilous tightrope”. As insolvency levels reach record levels, the numbers who see an individual voluntary arrangement as the ideal solution to their debt woes is likely to increase exponentially and many will return to financial security as a result.

Friday, June 22, 2012

Big Banks: The Dreadful Downgrades

Moody's this week downgraded 15 banks, including top names such as Morgan Stanley, Citi, Bank of America, Goldman Sachs and JPMorgan Chase. This was not unexpected. Morgan Stanley's rating (Baa1) is now barely a notch above "high yield" status (or whatever the nomenclature today is for non-investment grade, "junk" or "non-prime" issuers).

Banks, analysts, and equity markets have tried--even until now--to determine and quantify the impact of the downgrade on each bank's profitability, ROEs, deployment of capital, liquidity, and access of funding, although banks all over are arguing they are stronger, better capitalized, more averse to risks and subject more to oversight and regulation than they were five years ago.

Ratings, for example, have impact on trading activity, as much as access to funding and the interest rate they pay on outstanding debt. When ratings decline, banks must pledge more in collateral for derivatives and trading-related activities (swaps of all kinds and forms, currency transactions, deposits at exchanges and clearinghouses, etc.).

That's collateral they pledge (normally in the form of low-yielding government securities) to support existing trading activity that could be capital deployed for more profitable purposes (corporate or small-business lending, international expansion, higher-yielding investments, etc.). Among the five large banks, estimates range from $1-3 billion in the amount of incremental collateral the ratings decline will force a bank to pledge for existing trades.

At each bank, that's $1-3 billion in capital that will be deployed for pledged securities earning less than 2% and capital not supporting incremental business in the form of more loans to support middle-market and small businesses, more investments in corporate projects, and more commitments for corporate- or municipal-bond underwritings.  And this doesn't include the impact of permitted leverage, where $1 million in extra capital can result in, say, over $5 million in actual business activity (loans, investments, etc.) because of the bank's ability to use debt and capital to fund activity.

Hence, banks squeal and squirm, when they hear about the threat of a ratings decline or experience the actual confirmation of one.

The ratings agencies rationalize banks are more interconnected to all the vagaries and turmoil in markets all over the world (including Europe). Others say these are downgrades that should have occurred long ago, even if the banks have stronger balance sheets and substantially more in capital today than in 2007.  When Greece, Spain and Italy cough, U.S. banks can get a cold, too--because of complicated lending, funding, and trading arrangements with institutions in every corner of the globe.

The banks have known since the beginning of the year downgrades were pending. Nonetheless, it  adds to a long list of headaches, as somehow they try to grow profits, remain stable, endure tricky economic times, and get ready for the flood of new Dodd-Frank and Basel III regulation. While regulators and many market watchers want banks to simplify their business models (engaging in old-time deposit-taking and community-based lending), running and managing a bank--particularly a giant, money-center institution--becomes mind-numbing complex every year.

Tracy Williams

Click also:

CFN:  Risk management at major banks
CFN:  Banks and regulation
CFN:  Basel III and Capital
CFN:  The Volcker Rules, Part II
CFN:  The Volcker Rules, Part I

Thursday, June 21, 2012

Younger borrowers turn to reverse mortgages

According to recent reports, a large number of young homeowners are turning to reverse mortgages as they’re experiencing a huge increase in their unsecured debt levels. Reverse mortgage loans are the best financing options for the seniors who live on a fixed income level and need immediate cash for home renovation or any other purpose. Studies suggest that the previous borrowers of the reverse mortgage loans used them to improve their home, their biggest asset, but now the younger borrowers are taking resort to the reverse mortgage loans in order to meet their pressing financial needs. No amount of professional debt settlement advice can aid the young borrowers get out of debt. 

The reverse mortgage loans are actually tailored to meet the need of the seniors above 62 years of age. The government issues all reverse mortgages to the seniors through the HECM or the Home Equity Conversion Mortgage program and through this the senior can access the cash that he has accumulated as equity in his home and receive regular monthly payments from the lender. The reverse mortgage program is usually considered as the most exotic product for the seniors but the recent study shows that the borrowers of this kind of loan are those who are about to enter the retirement age and they all are taking out such loans in order to control their soaring household debt burden. It isn’t a far-fetched fact that the close-to-retirement-aged people are considering reverse mortgages as most of them have grown up managing their financial debt and according to them reverse mortgages give them the chance to facilitate their monthly repayment structure. 

reverse mortgages

Are reverse mortgages cheap products? 

The fees and the interest rates that are associated with reverse mortgages that were there in 1999 made such mortgage programs prohibitive to the mortgage programs and it is since then that the US Department of Education and the HUD or the Housing and Urban Development stepped in to make these cheaper and affordable for the seniors of the US who are suffering financially. This made the HECM saver the ultimate product for all those who are looking for a reasonable mortgage to repay their soaring debt obligations. 

The HECM has a few disadvantages for the younger borrowers as the young people may expect less cash or lower monthly payments than their older counterparts. According to a survey by MetLife, one in four baby boomers seeks reverse mortgage loans when they have subsequent amount of debt. All those belonging to the “sandwich generation” may find themselves in dire financial straits when they don’t take out a reverse mortgage to meet the needs. They can stop running to the debt help companies if they’re sure about the reverse mortgage program.

Myrina Stein is a regular writer for various finance related Communities including Oak View Law Group and CDFA. She is a Post Graduate degree holder in Finance from a reputed University in California and right now working in a Finance Consultancy as a Project Manager. She is well equipped to write articles on debt consolidation , debt settlement advice, bankruptcy, credit problems etc

Tuesday, June 12, 2012

Sigma Wealth Stock Analysis Advance Course

Last weekend we had just completed a 4 day stock analysis course. It was overall a comprehensive learning experience for the participants as they learn about economics, ratio analysis, intrinsic value, value investing, charts and patterns, price and volume analysis, Dow theory, Elliott Wave, Fibonacci support and resistance, market sentiment indicators and more!

What a list! Yes, we covered so much in just 4 days, of course, we have all the follow ups through our exclusive facebook "secret group" - only for the graduates, to discuss our daily trades and so that we can all make money together! Also, I've to thank Iqbal for coming all the way from KL to attend our seminar in Johor Bahru!

Here are some of the graduates comments:

"This course provides me a bigger pictures of how the stock market works and an in-depth analysis of stocks performance. I'll recommend friends to join this course as it transforms me from a novice into a knowledgeable investor. Lecturer is helpful and willing to share." Dickson Tan

"This course is useful for my future trading and investment!" Iqbal

"This course helps us to understand the fundamental and technical side of stock analysis, very useful for my trading!" Tan Teng Huat

"Overall the course covers a lot in the given time. Most other trading course do not include Fundamental Analysis, which I think is important to know. Value for money!" Joshua Lim

Our next intake is August 25 & 26, Sept 8 & 9. Interested please enquire through email: info@stocktips123.com or call Ms Teh at 012-7795292.

Where Are We Heading To?

Where is our KLCI heading to?

Everyone is asking this multimillion dollar question!

In order to answer this question, we must first look at the S&P 500 chart, as that will determine our market in the near term. According to the above chart, we are at the cross road whereby the S&P is below the 50 day moving average but was supported by the 200 day moving average. This spells some uncertainty over the market in the short term. Now we have to observe for the next 2 weeks whether we can stay above both 50 day and 200 day moving average, if yes, it means the bull trend continues. However, it S&P 500 breaks below these two moving averages, it means we have the "death cross", which is bad news for our KLCI as well.

Of course, we must not forget the Greece re-election is around the corner, this Sunday, as all eyes will be on the outcome whether the New Democratic Party (New Democracy, in support of the euro zone) and the radical left-wing coalition (Syriza, left-wing, opposed to rescue) will win?

Happy investing,
Pauline Yong

Monday, June 11, 2012

Commencement, 2012: "Avoid Monday Decisions"

UVA Darden's Dean Bruner: "Moral Courage is an all-the-time thing."
Before they ventured into the land of consulting, banking, finance, and product management, MBA graduates sat through commencement--one last chance to gather noisily with classmates and then ponder what lies ahead.

They sat through an on-stage commotion of deans and queues of speakers--some from from the highest rungs of business, some students like themselves. What parting words did they hear?  What taps on the back did they receive, as they set off beyond the campus cocoon?

In 2012 during the MBA graduation season, some themes are prevalent everywhere. Most graduating classes endure orations describing frail economic times and the responsibility they have to clean up the messes in the financial system or to assist others who face hardships.

MBA graduates are often admonished to seek achievement beyond the corporate bottom line: Don't just rush out of here, they are told, to join a 10-year race to accumulate titles, prestige and net worth. Contribute to the community, speakers advise--including speakers who have accumulated titles, prestige and net worth in bundles. Appreciate the support of family, and be mindful of others, as you make the arduous journey to senior management.  Take a breather along the way, too.


Some graduates are offered a dare: Dare to be different. Look beyond Wall Street. Start a company. Work in manufacturing. Spend time on the operations floor. Take an assignment abroad. Dabble in non-profit activity. All graduates are reminded to keep their addresses up to date and make yearly contributions to the b-school fund.

Consortium business schools, just like the rest, welcomed speakers to tell them something they may recall years later or share one last parting bit of advice, wisdom, or funny, leg-shaking one-liner.

At Consortium school Berkeley-Haas, the CEO of Adobe, Shantanu Narayen spoke to the MBA graduates.  Students, especially those with interests in finance and accounting, had been buried in finance models, spreadsheets, balance sheets and cash-flow statements the past two years. He knew that. But at the podium, he spoke about how the answers are not always in the spreadsheets, the numbers, or the financial ratios--no matter how useful the tools are.  He reminded them to "trust their gut," not the numbers, when they confront tough business, personal, and career-related decisions.

Steve Roth, a Tuck alumnus and now the chairman of  Vornado Realty Trust, spoke to Dartmouth's MBA graduates.  He skipped some conventional commencement platitudes and provided a laundry list of astute, wise-beyond-years business advice. At the Tuck Graduation, he told the graduates to do the following:  (a) Avoid making major decisions on Mondays, (b) be mathematical in analyzing businesses, and (c) access the bond market and interest rates more than equity markets in assessing the economy.

"My career was marked by a few really good decisions," Roth said. "That's all it takes, three or four
good calls in a lifetime."  Many graduates hoped the first good call might have been their decision to return to school for the MBA.

Yale's new dean of its School of Management, Edward Snyder, spoke to the Class of '12. Few careers, he reminded them, will follow "straight lines."  Snyder is in his first year after leaving the business school, Booth, at the University of Chicago.


Yale MBA grad Dan Magliocco received the honor to speak to his classmates. "We've been taught that transparency is better than secrecy, and alliances are better than enemies," he said "It forms the backbone for a smarter way to compete. It's our greatest advantage."


Virginia-Darden's MBA ceremony was marred by rain. Its dean, Robert Bruner, avoided a lengthy speech as graduates dodged the threat of pelting rain. He posted his speech on "Moral Courage" in his own blog. "Moral courage is not a sometime thing," he wrote. "It's an all-the-time thing. You acquire moral courage by doing it. Moral courage is like physical conditioning. You must work at maintaining it.

"I wish you moral courage to get after the problems that really matter, whether they be in your companies, your communities or your nations," he told the Class of '12. "Whether you succeed or fail, make us proud of your efforts."

Robert Zlotnick, the CEO of StarTex Power, spoke to the MBA grads at Texas-McCombs. Zlotnick told them they should plan life with the same vigor they do in a business setting (in a deal, a project, a branch expansion, an analysis, or presentation to board members).  He urged graduates to have a strategic life plan that encompassed family, life, career, community service and health. "In a sense, I planned how I wanted my obituary to ready," he said.  "You should treat your life as an entrepreneurial venture."

At Cornell Johnson,  Dean L. Joseph Johnson told the assembled group of MBA graduates, "Go out into this messy world and manage that privilege with integrity and purpose."

From b-school campus at Berkeley to Tuck and from Michigan to Texas, what did MBA grads actually hear and absorb, as they jostled in their seats, in the rain in some places, in searing heat in others? Wonder confidently into the messy world, dare to be different, expect non-linear career trails, trust your gut, maintain moral strength and courage, have a plan for life, write the check annually, and, yes, please don't make big decisions on a Monday after a long weekend. 

Tracy Williams

Tuesday, June 5, 2012

Find the Cheapest Car Insurance


With the struggling economy, you might find yourself needing to find ways to save money. One way that you can save money is with the cost of insurance. All of us need insurance; however, you do not need to pay a fortune for your insurance needs. Here are five tips to find cheap insurance.

1. Increase your Credit Score: 

You should ask for a copy of your free credit report and make sure that it is correct. If you have any unpaid bills, make sure you get them paid, and start making payments in a timely manner. You should also try to lower the amount of debt that you have. This can save you lots of money on insurance premiums.

2. Shop Around: 

One of the best ways to find cheap insurance is to compare different companies. Insurance companies are very competitive, so you should shop around for the best rate. You might even have the power to negotiate and get a better rate. Most insurance companies will give you free quotes, so it is a good idea to request at least three quotes and compare prices.

cheapest car insurance

3. No Deposit Car Insurance: 

Car insurance companies are very competitive; many are now offering no deposit car insurance. You will not fact a penalty for making monthly payments instead of one lump sum. Your car insurance payment will be divided into 12 months. If you are strapped for cash, this is a good option.

4. Increase your Deductible: 

You can lower your monthly payments if you increase your deductible. By increasing your deductible, you can save as much as 30 per cent on insurance. However, you want to make sure that you can cover the cost before your deductible is met.

5. Consolidate Policies: 

You can save money by combining your life, health, car and home insurance into one policy. Many people think that they do not need life insurance; however, the cost of a funeral and burial can really be a burden to your loved ones, so it is imperative that you have life insurance. Health and home insurance are also important for you to have, so you will not be stuck with huge bills. By combining policies with the same provider, you can save thousands of dollars.

My name is Patrick and I’m guest blogging for www.carinsurancewithnodeposit.co.uk.

Top 5 Best Finance Websites For You

Keeping up with the world of finance can be difficult with all of the information that is available out there. If you are interested in finance, there are several websites that you can check regularly to stay up to date with what is going on in the world. Here are five of the best finance websites for you to bookmark.

CNN Money 

 CNN Money is one of the most well-known finance websites out there. It is updated throughout the day with contributions from experts in their respective fields. They get content from Fortune, Money, and of course, CNN. They have information about the stock market, banking, bonds, real estate, insurance, and a lot more. 

Investopedia 

Investopedia is one of the best finance websites online. It has a plethora of information about anything that is related to investing. You can get definitions of terms that you understand. You can find articles from investment experts that provide you with tips and strategies. They also provide up-to-date market analysis articles that help you figure out exactly what to do with your portfolio. If you have any questions about investing, this is one of the places that you need to go. 

Best Finance Websites

The Motley Fool 

The Motley Fool is perhaps the most entertaining finance website in the industry. They take a lighthearted approach to analyzing the financial markets and distributing news. Their writers are very knowledgeable, but they also have a good sense of humor. If you don't like the straightforward manner that comes with most of the other finance websites out there, this is definitely one that can keep you interested. They have updated news articles daily, and they also have columns from regular contributors throughout the week. 

Mint 

Mint is a finance website that makes it possible for you to stick to a budget for once. Many people have problems tracking their finances and sticking to a specific budget amount on a regular basis. With Mint, you can set up an account and tie it to all of your other financial accounts online. For example, you can tie it to your checking account, your savings account, credit card accounts and your mortgage. It will update all of your financial accounts regularly so that you can see exactly where you stand. You can set budgets, and then when you make a purchase, it will be deducted from the appropriate spending category in the system. This allows you to see exactly how much you have left at any given time. 

Kiplinger 

Kiplinger is another well-known site in the financial realm. It provides information about investments and recent news events. It also has a section specifically designed for beginners who need to learn the basics of finances.

Sharon Dyer is the Morgan Law Firm Outreach Director and a frequent blogger on a variety of subjects. See her recent article on Travis County divorce on the firm's divorce blog.

How to Dispute Discrepancies on Your Credit Report

Your credit report is one of the most important documents in determining your financial standing. A good credit report can help you achieve your financial goals, purchase valuable assets, and qualify for competitive interest rates on new lines of credit. A bad credit report can keep you from purchasing a new home or car, as well as preventing you from qualifying for credit at low interest rates. This makes it essential to know what’s in your credit report and what you can do to improve your credit by reviewing your credit file regularly.

According to a study released on Bankrate.com, a startling 70 percent of all credit reports contain serious errors or discrepancies which can affect an individual’s credit rating. These include having accounts listed twice, incorrect account statuses, discrepancies on the date penalties were incurred, and even the assignment of incorrect aliases that aren’t the same person. Each of these mistakes can cause decreases in your credit rating and affect your ability to borrow at competitive rates.

By Federal law, every U.S. resident is allowed a free copy of their credit report each year. You can get your free reports by going to annualcreditreport.com and following the instructions to get each of your reports. Keep in mind, your free credit report actually includes the three different variations since you get a different report from each of the three main credit bureaus. Each of the three bureaus—Experian, Equifax, and TransUnion—has their own credit reporting system so they maintain their own version of your credit file. If you want to improve your credit, it’s important to check all three reports.

Credit Report


Once you receive copies of each of your reports, the next step is to carefully review the information included therein. Here are some tips of what you want to look for if you’re trying to find discrepancies:

Check your contact information, paying special attention to any aliases the report indicates are you. In most cases these will be variations of your name, but in some instances the credit bureau will incorrectly assign an alias that’s not actually you.
Check the status of each credit account. Make sure current accounts are showing current on your credit report. For delinquent accounts or any penalties incurred from delinquency or litigation make sure the date the penalty was incurred is correct.
Check to make sure your accounts are only listed once, since double listed accounts increase your total debt load. Total debt owed is a major determining factor in FICO credit scores, so a mortgage listed twice can cause serious damage to your credit.

If you find any errors or discrepancies, submit your request for correction in writing to each of the three credit bureaus. It’s important to send the correction to all three agencies, since they’re not required to communicate with each other. Always submit disputes in writing and keep copies of all correspondence. Keep your explanations brief and to-the-point, and you’ll also want to provide copies of any proof or documentation you have. 

Once you submit your corrections, the credit bureaus will communicate the disputes to all of your relevant creditors. They will have an opportunity to confirm or deny your dispute. If the dispute is confirmed as an error, your report gets corrected and you must be notified if the correction gets rejected or changed at a later time. If you are denied a correction, you are allowed by law to present a summary of your side on the dispute in writing to be included in your credit file.

Even after you correct any errors in your credit reports with the three credit bureaus, you may not have the credit scores you had hoped to see. The credit history listed in your credit report is a main determining factor in your credit scores, but it is not the only piece of your credit puzzle. Total debt owed is another major determining factor. In this light, if correcting discrepancies doesn’t deliver the result you want, your best bet is to find ways to improve your credit history and pay off your debt as quickly as possible. If you need help, contact a non-profit credit counseling agency to allow a certified credit counselor to assess your debts and provide recommendations to help you improve your situation.  

Connie Solidad has been writing about finances and debt consolidation for years. She's an expert in the industry and writes about debt incurred from credit cards, debt management options and credit counseling. When Connie is not working, she loves playing with her two dogs in Tampa, Florida. To learn more about debt management refer to ConsolidatedCredit.org.