1) Fairholme Capital Management uses MBIA Inc. as a case study to illustrate its investment strategy of ignoring the crowd and investing in out of favor positions.
2) Fairholme believes that if MBIA Inc's corporate transformation is judicially confirmed, it could lead National Public Finance Guarantee Corporation to increase its credit ratings, lower expenses, raise capital, and write new municipal bond insurance business.
3) Fairholme also believes that MBIA Insurance Corporation's ongoing efforts to de-risk its portfolio through commutations will further reduce its exposure and volatility, and that MBIA is likely to recover a significant portion of past claims paid through legal proceedings against counterparties like Bank of America.
The document discusses secondary markets for structured cash flows, such as pensions, which allow individuals to sell future income streams for a lump sum payment. It provides details on Future Income Payments, LLC, a company that facilitates these transactions, including their process for underwriting sellers, mitigating risks through reserve accounts, and replacing cash flows if needed. Examples of purchase prices, terms, and monthly payments are given to illustrate potential returns from structured cash flows compared to other fixed income options like annuities.
Financial institutions face various types of risks that can impact their returns and solvency. The document discusses 12 main risks: credit risk, liquidity risk, interest rate risk, market risk, off-balance sheet risk, foreign exchange risk, sovereign risk, technology risk, operational risk, fintech risk, insolvency risk, and interactions among risks. Managing these risks is a major objective of financial institution management to increase returns while maintaining solvency. The risks stem from activities like lending, trading, and transformations of assets and liabilities across maturities and currencies.
Chapter 22_Insurance Companies and Pension FundsRusman Mukhlis
This document summarizes key topics related to insurance companies and pension funds. It discusses the fundamentals of insurance, types of insurance like life and health insurance, and how insurance companies are organized and regulated. It also covers the different types of pension plans like defined benefit and defined contribution, and how pension plans are regulated in the US by acts like ERISA.
This document provides an overview of mortgage markets and mortgage-backed securities. It defines different types of mortgages like home mortgages, commercial mortgages, and adjustable-rate mortgages. It describes how mortgages are securitized into mortgage-backed securities and the roles of government agencies like Fannie Mae, Freddie Mac, and Ginnie Mae in the secondary mortgage market. It also discusses trends in subprime lending and the financial crisis.
Commercial banks are the largest financial institutions in terms of total assets. They take in deposits and make loans. The document provides an overview of the commercial banking industry, including:
- Major assets are loans and investment securities. Major liabilities are deposits.
- Banks play key roles in monetary policy transmission, payments, and maturity transformation. They are regulated to protect deposits and financial stability.
- Large banks engage in both retail and wholesale banking, while small banks focus on retail. Regulations and consolidation have reduced the number of banks in the US over time.
This document provides an overview of securities firms and investment banks. It discusses how investment banks help corporations raise capital through underwriting new stock and bond issues. It also describes how securities firms facilitate secondary market trading. The document outlines the size and structure of the industry as well as subgroups within it. It explains various functions of securities firms and investment banks like investment banking, market making, trading, and mergers and acquisitions advising. Regulatory bodies for the industry are also summarized.
This document provides an overview of money markets and various money market instruments. It defines money markets as involving debt instruments with original maturities of one year or less. It then discusses various money market instruments like treasury bills, federal funds, repurchase agreements, commercial paper, negotiable certificates of deposit, and banker's acceptances. For each instrument, it provides details on what they are, how they are used, and how yields are calculated. It also discusses participants in money markets and international money markets.
This document provides an overview of securities firms and investment banks. It discusses how investment banks help corporations raise capital through underwriting new stock and bond issues. It also describes how securities firms facilitate secondary market trading of existing securities. The document outlines the size and structure of the industry as well as subgroups of national full-service firms. It explains various functions of securities firms like investment banking, venture capital, market making, and mergers and acquisitions advising. Regulatory bodies for the industry are also summarized.
The document discusses secondary markets for structured cash flows, such as pensions, which allow individuals to sell future income streams for a lump sum payment. It provides details on Future Income Payments, LLC, a company that facilitates these transactions, including their process for underwriting sellers, mitigating risks through reserve accounts, and replacing cash flows if needed. Examples of purchase prices, terms, and monthly payments are given to illustrate potential returns from structured cash flows compared to other fixed income options like annuities.
Financial institutions face various types of risks that can impact their returns and solvency. The document discusses 12 main risks: credit risk, liquidity risk, interest rate risk, market risk, off-balance sheet risk, foreign exchange risk, sovereign risk, technology risk, operational risk, fintech risk, insolvency risk, and interactions among risks. Managing these risks is a major objective of financial institution management to increase returns while maintaining solvency. The risks stem from activities like lending, trading, and transformations of assets and liabilities across maturities and currencies.
Chapter 22_Insurance Companies and Pension FundsRusman Mukhlis
This document summarizes key topics related to insurance companies and pension funds. It discusses the fundamentals of insurance, types of insurance like life and health insurance, and how insurance companies are organized and regulated. It also covers the different types of pension plans like defined benefit and defined contribution, and how pension plans are regulated in the US by acts like ERISA.
This document provides an overview of mortgage markets and mortgage-backed securities. It defines different types of mortgages like home mortgages, commercial mortgages, and adjustable-rate mortgages. It describes how mortgages are securitized into mortgage-backed securities and the roles of government agencies like Fannie Mae, Freddie Mac, and Ginnie Mae in the secondary mortgage market. It also discusses trends in subprime lending and the financial crisis.
Commercial banks are the largest financial institutions in terms of total assets. They take in deposits and make loans. The document provides an overview of the commercial banking industry, including:
- Major assets are loans and investment securities. Major liabilities are deposits.
- Banks play key roles in monetary policy transmission, payments, and maturity transformation. They are regulated to protect deposits and financial stability.
- Large banks engage in both retail and wholesale banking, while small banks focus on retail. Regulations and consolidation have reduced the number of banks in the US over time.
This document provides an overview of securities firms and investment banks. It discusses how investment banks help corporations raise capital through underwriting new stock and bond issues. It also describes how securities firms facilitate secondary market trading. The document outlines the size and structure of the industry as well as subgroups within it. It explains various functions of securities firms and investment banks like investment banking, market making, trading, and mergers and acquisitions advising. Regulatory bodies for the industry are also summarized.
This document provides an overview of money markets and various money market instruments. It defines money markets as involving debt instruments with original maturities of one year or less. It then discusses various money market instruments like treasury bills, federal funds, repurchase agreements, commercial paper, negotiable certificates of deposit, and banker's acceptances. For each instrument, it provides details on what they are, how they are used, and how yields are calculated. It also discusses participants in money markets and international money markets.
This document provides an overview of securities firms and investment banks. It discusses how investment banks help corporations raise capital through underwriting new stock and bond issues. It also describes how securities firms facilitate secondary market trading of existing securities. The document outlines the size and structure of the industry as well as subgroups of national full-service firms. It explains various functions of securities firms like investment banking, venture capital, market making, and mergers and acquisitions advising. Regulatory bodies for the industry are also summarized.
This chapter introduces key concepts about financial markets and institutions. It discusses why studying financial markets and institutions is important, as they are primary channels for allocating capital in society. The chapter defines different types of financial markets, including primary versus secondary markets, and money versus capital markets. It also introduces various financial instruments and derivative markets. Additionally, it provides an overview of different types of financial institutions and how they benefit both suppliers and users of funds. The chapter concludes with discussions around regulation of financial markets and institutions.
Preferred stocks blend characteristics of stocks and bonds. They provide higher yields than common stocks through fixed dividend payments, and have higher claims on company assets than common shares. Preferred stocks offer greater assurances of receiving dividend payments than common stocks. Companies issue preferred shares as a relatively cheap way to raise capital, for balance sheet management purposes, and to maintain flexibility in dividend payments. Preferred stocks historically have offered higher yields than other asset classes like bonds and money market accounts, providing potential portfolio diversification benefits due to their low correlations with other assets.
This document discusses liquidity risk management for financial institutions. It begins by defining liquidity risk and explaining that depository institutions are highly exposed due to holding short-term liabilities to fund long-term assets. It then examines the causes of liquidity risk, effects of deposit drains on banks' balance sheets, and tools for measuring and managing liquidity risk such as the financing gap and net liquidity statement. The document also addresses liquidity issues for other financial institutions like insurance companies and investment funds.
This document discusses analyzing the financial statements of commercial banks. It covers key components of bank balance sheets and income statements, as well as off-balance sheet items and how they are evaluated. Regulators use CAMELS ratings to assess banks, focusing on capital adequacy, asset quality, management, earnings, liquidity, and market sensitivity. Return on equity is a key framework for analyzing bank performance by decomposing it into return on assets and equity multiplier. Various ratios like net interest margin, overhead efficiency, and components of profit margin provide additional insights. The appropriate analysis depends on a bank's niche and size.
Insurance companies play an important role in society by compensating policyholders for specified events in exchange for premiums. There are two main types of insurance companies: life insurers which provide protection for death, illness, and retirement, and property-casualty insurers which protect against accidents and liability. Both types of insurers pool risks, invest premiums, and must balance premium income with payouts to remain profitable. Strict regulation at the state level oversees insurance company operations and solvency.
The document discusses investment companies, specifically mutual funds and hedge funds. It provides details on the types of mutual funds, including their growth and regulation. The key points are:
1) Investment companies pool financial resources from individuals and companies and invest them in diversified portfolios. Mutual funds are a type of investment company.
2) Mutual funds have grown significantly since the 1970s with the introduction of new types of funds. As of 2019, over $25 trillion was invested in US mutual funds.
3) Mutual funds are highly regulated due to protecting small investors. Regulations address areas like disclosure, fees, and preventing investor abuses.
What is the difference between common stock and preferred stock? And Financia...Awais Sandhu
What is the difference between common stock and preferred stock?
Financial statement
M. Awais Sandhu
University of agriculture Fsd
MBA 3.5y
03007271202
- The document discusses risk management strategies used by financial institutions to manage credit risk and interest rate risk.
- To manage credit risk, institutions screen borrowers, specialize in certain industries/locations, monitor borrowers, require collateral, and ration credit.
- To manage interest rate risk, institutions conduct income gap analysis to assess how changes in interest rates impact earnings, and duration gap analysis to assess impacts on market value and capital. The analyses are demonstrated on sample bank and finance company balance sheets.
This document discusses the various types of risks incurred by financial institutions. It describes credit risk as the risk of borrowers defaulting on loans. It also discusses liquidity risk, interest rate risk, market risk, off-balance sheet risk, foreign exchange risk, sovereign risk, technology risk, operational risk, and insolvency risk. For each risk, it provides details on how the risk can impact a financial institution's returns, balance sheet, and equity value. It includes examples and figures to illustrate different risks.
This document provides an overview of derivative securities markets based on a chapter from a textbook on financial markets and institutions. It defines derivatives and describes their main uses for hedging and speculation. It also outlines various types of derivative contracts including forwards, futures, options, swaps, and discusses the key characteristics and uses of these contracts. The document concludes with tables showing the size of various derivative markets from 1999 to 2016.
Finance companies provide financing for consumers and businesses and have grown significantly since the 1980s. They issue commercial paper and loans to generate income. Their main risks include default, liquidity, interest rate, and rollover risk. Finance companies are classified by the customers they serve, such as consumer, business, or sales finance companies. Their balance sheets are comprised mostly of loan portfolios, commercial paper, and notes as assets and liabilities.
Corporations often have two types of stocks: common and preferred. There are both advantages and disadvantages to each. Let’s say you have $10,000 to invest in a corporation that issues both common and preferred stock. Your main goal is to maximize the amount of dividends received. Which of the types of stock would you invest in? Explain your answer.
This document provides an investor presentation for Third Point Reinsurance Ltd. It begins with cautionary statements about forward-looking statements and non-GAAP financial measures included. It then summarizes the company as a Bermuda-based specialty property and casualty reinsurer with an A- rating. Key metrics on growth in book value per share and returns are provided for 2014 and prior periods. The document discusses the company's total return business model, management team, flexible underwriting strategy, relationship with investment manager Third Point LLC, strong capital base, and growth in gross premiums written.
This document provides information about insurance companies, including life insurance companies and property-casualty insurance companies. It discusses the primary functions of insurance companies, types of insurance policies, major assets and liabilities of life and property-casualty insurers, regulation of the insurance industry, and recent trends in underwriting ratios for property-casualty insurers. It also provides examples of calculating annuity payments and analyzes balance sheets and financial ratios of life and property-casualty insurers.
This document provides an overview of chapter 8 from the textbook "Financial Markets" which discusses stock markets. It defines key terms related to common stock such as dividends, voting rights, and returns. It also describes the primary functions and features of major stock exchanges like the New York Stock Exchange and NASDAQ. Additional topics covered include stock market indexes, regulations, and the role of American Depository Receipts in facilitating international investment.
This document discusses various aspects of raising funds domestically and globally. It begins by outlining the key topics that will be covered, including the process of fund raising, roles of different players, regulatory environment, types of instruments, costs, risks, and challenges. It then provides details on the introduction and process of fund raising. It describes the roles of various players like government, regulators, service providers, and media. It also discusses the regulatory environment, domestic and global instruments, specialized instruments, costs, risks, and challenges related to fund raising.
1) Financial intermediaries such as banks, credit unions, insurance companies, and pension funds facilitate the flow of funds between lenders and borrowers in an indirect manner.
2) There are several types of financial intermediaries that perform different functions - depository institutions like banks accept deposits and make loans, contractual savings institutions acquire funds contractually and have predictable payouts, and investment intermediaries raise funds to purchase securities.
3) Financial intermediaries are regulated by several government agencies to ensure stability and protect consumers, with regulations addressing issues like chartering, examinations, disclosures, restrictions on activities, and deposit insurance.
Pension funds offer tax-deferred savings plans for working individuals to accumulate savings for retirement. There are two main types of pension funds - defined benefit plans where employers commit to providing a specific retirement benefit, and defined contribution plans where employers commit to specified contributions. Regulation of pension funds in the US is governed by ERISA which sets standards for funding, vesting periods, fiduciary responsibilities, and provides insurance for underfunded plans. Global pension systems vary, with some European countries having traditional state-funded pensions.
This document discusses credit risk management for financial institutions. It covers topics such as how financial institutions transform household savings into loans, the importance of credit risk management, credit quality problems over time, analyzing different types of loans including real estate, consumer, small business and commercial loans. It discusses tools for credit analysis like the five C's of credit, cash flow analysis, ratio analysis, Altman's Z-score model and Moody's expected default frequency model. The document is from a textbook on financial institutions by Dr. Muath Asmar from An-Najah National University.
El documento presenta una introducción al plan de negocios, incluyendo su contenido y características. Explica que debe ser simple, específico, realista y completo. Detalla las secciones como resumen ejecutivo, concepto del negocio, análisis de la industria, planes de marketing, operaciones y financiero. También cubre el pensamiento estratégico, análisis FODA y las cinco fuerzas de Porter para evaluar la posición competitiva de una empresa.
The document provides examples of case studies conducted in education research. It discusses case studies done at the B.Ed, B.El.Ed, and M.Ed levels. Examples of published case studies are provided covering topics such as language development in children, use of technology in teaching, and inclusion of visually impaired students in physical education. The document also discusses the meaning of case, characteristics of case studies, data collection methods, components and steps involved in conducting a case study.
This chapter introduces key concepts about financial markets and institutions. It discusses why studying financial markets and institutions is important, as they are primary channels for allocating capital in society. The chapter defines different types of financial markets, including primary versus secondary markets, and money versus capital markets. It also introduces various financial instruments and derivative markets. Additionally, it provides an overview of different types of financial institutions and how they benefit both suppliers and users of funds. The chapter concludes with discussions around regulation of financial markets and institutions.
Preferred stocks blend characteristics of stocks and bonds. They provide higher yields than common stocks through fixed dividend payments, and have higher claims on company assets than common shares. Preferred stocks offer greater assurances of receiving dividend payments than common stocks. Companies issue preferred shares as a relatively cheap way to raise capital, for balance sheet management purposes, and to maintain flexibility in dividend payments. Preferred stocks historically have offered higher yields than other asset classes like bonds and money market accounts, providing potential portfolio diversification benefits due to their low correlations with other assets.
This document discusses liquidity risk management for financial institutions. It begins by defining liquidity risk and explaining that depository institutions are highly exposed due to holding short-term liabilities to fund long-term assets. It then examines the causes of liquidity risk, effects of deposit drains on banks' balance sheets, and tools for measuring and managing liquidity risk such as the financing gap and net liquidity statement. The document also addresses liquidity issues for other financial institutions like insurance companies and investment funds.
This document discusses analyzing the financial statements of commercial banks. It covers key components of bank balance sheets and income statements, as well as off-balance sheet items and how they are evaluated. Regulators use CAMELS ratings to assess banks, focusing on capital adequacy, asset quality, management, earnings, liquidity, and market sensitivity. Return on equity is a key framework for analyzing bank performance by decomposing it into return on assets and equity multiplier. Various ratios like net interest margin, overhead efficiency, and components of profit margin provide additional insights. The appropriate analysis depends on a bank's niche and size.
Insurance companies play an important role in society by compensating policyholders for specified events in exchange for premiums. There are two main types of insurance companies: life insurers which provide protection for death, illness, and retirement, and property-casualty insurers which protect against accidents and liability. Both types of insurers pool risks, invest premiums, and must balance premium income with payouts to remain profitable. Strict regulation at the state level oversees insurance company operations and solvency.
The document discusses investment companies, specifically mutual funds and hedge funds. It provides details on the types of mutual funds, including their growth and regulation. The key points are:
1) Investment companies pool financial resources from individuals and companies and invest them in diversified portfolios. Mutual funds are a type of investment company.
2) Mutual funds have grown significantly since the 1970s with the introduction of new types of funds. As of 2019, over $25 trillion was invested in US mutual funds.
3) Mutual funds are highly regulated due to protecting small investors. Regulations address areas like disclosure, fees, and preventing investor abuses.
What is the difference between common stock and preferred stock? And Financia...Awais Sandhu
What is the difference between common stock and preferred stock?
Financial statement
M. Awais Sandhu
University of agriculture Fsd
MBA 3.5y
03007271202
- The document discusses risk management strategies used by financial institutions to manage credit risk and interest rate risk.
- To manage credit risk, institutions screen borrowers, specialize in certain industries/locations, monitor borrowers, require collateral, and ration credit.
- To manage interest rate risk, institutions conduct income gap analysis to assess how changes in interest rates impact earnings, and duration gap analysis to assess impacts on market value and capital. The analyses are demonstrated on sample bank and finance company balance sheets.
This document discusses the various types of risks incurred by financial institutions. It describes credit risk as the risk of borrowers defaulting on loans. It also discusses liquidity risk, interest rate risk, market risk, off-balance sheet risk, foreign exchange risk, sovereign risk, technology risk, operational risk, and insolvency risk. For each risk, it provides details on how the risk can impact a financial institution's returns, balance sheet, and equity value. It includes examples and figures to illustrate different risks.
This document provides an overview of derivative securities markets based on a chapter from a textbook on financial markets and institutions. It defines derivatives and describes their main uses for hedging and speculation. It also outlines various types of derivative contracts including forwards, futures, options, swaps, and discusses the key characteristics and uses of these contracts. The document concludes with tables showing the size of various derivative markets from 1999 to 2016.
Finance companies provide financing for consumers and businesses and have grown significantly since the 1980s. They issue commercial paper and loans to generate income. Their main risks include default, liquidity, interest rate, and rollover risk. Finance companies are classified by the customers they serve, such as consumer, business, or sales finance companies. Their balance sheets are comprised mostly of loan portfolios, commercial paper, and notes as assets and liabilities.
Corporations often have two types of stocks: common and preferred. There are both advantages and disadvantages to each. Let’s say you have $10,000 to invest in a corporation that issues both common and preferred stock. Your main goal is to maximize the amount of dividends received. Which of the types of stock would you invest in? Explain your answer.
This document provides an investor presentation for Third Point Reinsurance Ltd. It begins with cautionary statements about forward-looking statements and non-GAAP financial measures included. It then summarizes the company as a Bermuda-based specialty property and casualty reinsurer with an A- rating. Key metrics on growth in book value per share and returns are provided for 2014 and prior periods. The document discusses the company's total return business model, management team, flexible underwriting strategy, relationship with investment manager Third Point LLC, strong capital base, and growth in gross premiums written.
This document provides information about insurance companies, including life insurance companies and property-casualty insurance companies. It discusses the primary functions of insurance companies, types of insurance policies, major assets and liabilities of life and property-casualty insurers, regulation of the insurance industry, and recent trends in underwriting ratios for property-casualty insurers. It also provides examples of calculating annuity payments and analyzes balance sheets and financial ratios of life and property-casualty insurers.
This document provides an overview of chapter 8 from the textbook "Financial Markets" which discusses stock markets. It defines key terms related to common stock such as dividends, voting rights, and returns. It also describes the primary functions and features of major stock exchanges like the New York Stock Exchange and NASDAQ. Additional topics covered include stock market indexes, regulations, and the role of American Depository Receipts in facilitating international investment.
This document discusses various aspects of raising funds domestically and globally. It begins by outlining the key topics that will be covered, including the process of fund raising, roles of different players, regulatory environment, types of instruments, costs, risks, and challenges. It then provides details on the introduction and process of fund raising. It describes the roles of various players like government, regulators, service providers, and media. It also discusses the regulatory environment, domestic and global instruments, specialized instruments, costs, risks, and challenges related to fund raising.
1) Financial intermediaries such as banks, credit unions, insurance companies, and pension funds facilitate the flow of funds between lenders and borrowers in an indirect manner.
2) There are several types of financial intermediaries that perform different functions - depository institutions like banks accept deposits and make loans, contractual savings institutions acquire funds contractually and have predictable payouts, and investment intermediaries raise funds to purchase securities.
3) Financial intermediaries are regulated by several government agencies to ensure stability and protect consumers, with regulations addressing issues like chartering, examinations, disclosures, restrictions on activities, and deposit insurance.
Pension funds offer tax-deferred savings plans for working individuals to accumulate savings for retirement. There are two main types of pension funds - defined benefit plans where employers commit to providing a specific retirement benefit, and defined contribution plans where employers commit to specified contributions. Regulation of pension funds in the US is governed by ERISA which sets standards for funding, vesting periods, fiduciary responsibilities, and provides insurance for underfunded plans. Global pension systems vary, with some European countries having traditional state-funded pensions.
This document discusses credit risk management for financial institutions. It covers topics such as how financial institutions transform household savings into loans, the importance of credit risk management, credit quality problems over time, analyzing different types of loans including real estate, consumer, small business and commercial loans. It discusses tools for credit analysis like the five C's of credit, cash flow analysis, ratio analysis, Altman's Z-score model and Moody's expected default frequency model. The document is from a textbook on financial institutions by Dr. Muath Asmar from An-Najah National University.
El documento presenta una introducción al plan de negocios, incluyendo su contenido y características. Explica que debe ser simple, específico, realista y completo. Detalla las secciones como resumen ejecutivo, concepto del negocio, análisis de la industria, planes de marketing, operaciones y financiero. También cubre el pensamiento estratégico, análisis FODA y las cinco fuerzas de Porter para evaluar la posición competitiva de una empresa.
The document provides examples of case studies conducted in education research. It discusses case studies done at the B.Ed, B.El.Ed, and M.Ed levels. Examples of published case studies are provided covering topics such as language development in children, use of technology in teaching, and inclusion of visually impaired students in physical education. The document also discusses the meaning of case, characteristics of case studies, data collection methods, components and steps involved in conducting a case study.
The document analyzes the market share and profits of two textile companies, Beauregard and C&P, over several quarters from 1988-1990. It considers the effects on profits if one or both companies were to increase their prices. Beauregard initially holds a higher market share but sees losses, while C&P has steady profits. The analysis shows Beauregard could gain profits by increasing its price to $4 even if C&P retains its $3 price, due to Beauregard's local presence. However, both profit most by maintaining the $3 price to share the market.
- BTC's market share for product T30 declined from 56% in 1988-1989 to an estimated 33% in 1990 as its price increased, while competitor C&P's share rose to 67%.
- Keeping the price at $4/yard allows BTC to cover its fixed costs and make a profit if it sells over 72,000 yards. Increasing its sales volume would further boost profits.
- The analysis recommends BTC maintain the $4 price and aim to sell at least 80,000 yards, while encouraging C&P to also keep its price at $4. This would increase BTC's market share and profits.
This will provide you with an ideal format for how to lay out a Long Range Strategic Plan with the vision, purpose, values, big idea, strategies, and tactics.
We coach Brand Leader on the principles of good analysis, how to assess health and wealth of the brand and turning your analytical thinking into strategic stories, projections and reports. We look at:
1. Principles of Good Analytics Gain more support for your analysis by telling analytical stories through data.
2. Health and Wealth of the Brand Assess brand situation looking category, consumer, channels, brand and competitors
3. Analytical stories get Decision Makers to “what do you think” stage Analysis turns fact into insight and data breaks form the story that sets up strategic choices.
4. Turn analytical thinking into projections Extrapolating data into the future, starts with what you are see in the current.
5. Monthly Brand Report Keep everyone on the team informed, engaged and aware of the strategic thinking
The document provides background information on Starbucks, including its history from founding in 1971 through expansion led by Howard Schultz in the 1980s and 1990s. It discusses Starbucks' vision, mission and objectives. It also performs external analysis using PEST and Porter's Five Forces frameworks to understand the business environment and competitive landscape.
Workshop on How to Think Strategically.
We teach brand leaders to think strategically. We show them how to ask the right questions before seeing solutions, how to map out a range of decision trees that intersect and connect by imagining how events will play out. We take them through the 7 elements of good strategy: vision, opportunity, focus, speed, early win, leverage and gateway. We look at strategy from a competitive position, consumer connectivity, core strength and situational
Starbucks has achieved success through several factors:
1) Their unconventional marketing strategy focuses on high quality products and customer experience rather than traditional advertising.
2) Strategic expansion establishes hubs in major cities before expanding to surrounding areas, allowing them to quickly achieve market dominance.
3) While threats from competitors exist, Starbucks differentiates itself through its brand image and emphasis on consistency in customer experience across all stores.
The document discusses various types of financial instruments and markets. It begins by explaining how companies raise money through financial markets and the packaging of future cash flows. It then defines different financial markets and instruments such as money markets, capital markets, bonds, stocks, and preferred shares. It also discusses how private companies obtain financing and the process for companies going public.
Mutual funds pool money from individual investors to purchase securities like stocks and bonds. They provide benefits like diversification and lower costs than individual investors can obtain. The mutual fund industry has grown dramatically in recent decades as more households invest in mutual funds for retirement. However, the industry has also faced scandals involving late trading, market timing, and other conflicts of interest between fund managers and investors.
The document provides an overview of mutual funds in India, including their history and types. It discusses four phases of growth of the mutual fund industry in India from 1964 to the present. It also describes the basic concepts of mutual funds and lists 15 principal types of mutual funds categorized by their primary objectives such as growth, income, and specialized funds.
IDFC Banking and PSU Debt Fund_Key information memorandumJubiIDFCDebt
The document provides key information about the IDFC Banking & PSU Debt Fund mutual fund scheme. The scheme aims to generate optimal returns over the short to medium term by predominantly investing in debt and money market instruments issued by public sector undertakings, banks, public financial institutions and municipal bonds. It has a moderate risk profile with the principal at moderate risk. The scheme offers both growth and dividend options under the regular and direct plans.
IDFC Banking and PSU Debt Fund_Key information memorandumIDFCJUBI
The document is a Key Information Memorandum for the IDFC Banking & PSU Debt Fund, an open-ended debt scheme that predominantly invests in debt instruments issued by banks, public sector undertakings, public financial institutions, and municipal bonds. The fund seeks to generate optimal returns over the short to medium term through such investments. It notes the asset allocation of the fund, investment strategy of active allocation across fixed income instruments and maturities, and risks associated with the scheme around market, liquidity, and credit risk.
The document discusses several topics related to finance and investing, including:
1) It provides an overview of recent developments in the Indian stock market and new financial products approved by SEBI.
2) It discusses securitization and how it allows the conversion of existing or future cash flows into marketable securities.
3) It defines what a hedge fund is and how they charge various fees including management and incentive fees.
The document discusses several topics related to finance and banking including:
1) SEBI approved new derivatives products in India to attract more domestic investors. BSE and NSE indices rose and the dollar and gold prices were stable.
2) Securitization is the process of converting existing assets or future cash flows into marketable securities like bonds. This allows companies to raise funds.
3) Hedge funds charge management and incentive fees and seek returns with low correlation to stocks and bonds. They have more flexible regulations than mutual funds.
This document summarizes the strategies and services of Singer Financial Group. They aim to create substantial and sustainable advantages for clients' financial portfolios through strategies that protect principal, retain gains, and guarantee income. They emphasize downside protection using "Finsurance" strategies that blend finance and insurance, such as equity-indexed annuities. Their goal is to help clients enjoy retirement without losing money or running out of money using a "Fortress Balance Sheet" approach.
- Xpresso Delight Limited is seeking $30 million in capital to fund a business expansion.
- The report identifies and evaluates sources of debt financing (loans, debentures, bonds) and equity financing (common shares, preferred shares, retained earnings).
- After analyzing the advantages, disadvantages, and implications of each source, the report selects the appropriate financing sources based on risk, legal, financial, and control considerations.
IDFC Credit Risk Fund_Key information memorandumIDFCJUBI
The document provides a key information memorandum for the IDFC Credit Risk Fund, an open-ended debt scheme predominantly investing in AA and below rated corporate bonds. Some key points:
- The fund seeks to generate returns by investing predominantly in AA and below rated corporate debt securities across maturities.
- The asset allocation includes 65-100% in corporate bonds rated AA and below, and 0-35% in other debt and money market instruments.
- The investment strategy focuses on managing long-term capital with a view to provide superior yields across credit spectrum and maturities by investing in high yielding, less liquid corporate debt securities.
- The fund aims to manage risks associated with debt markets such as market,
IDFC Credit Risk Fund_Key information memorandumTesssttest
The document provides a key information memorandum for the IDFC Credit Risk Fund, an open-ended debt scheme predominantly investing in AA and below rated corporate bonds. It summarizes the investment objective as generating returns by investing in corporate debt securities across credit ratings and maturities. It outlines the asset allocation targets and investment strategy, which focuses on managing long-term capital with a view to provide superior yields across credit ratings and maturities through investing in high yielding, less liquid corporate debt securities. It also describes the risks associated with the scheme and risk management strategies to mitigate these risks.
IDFC Credit Risk Fund_Key information memorandumJubiIDFCDebt
The document provides a key information memorandum for the IDFC Credit Risk Fund, an open-ended debt scheme predominantly investing in AA and below rated corporate bonds. Some key points:
- The fund seeks to generate returns by investing predominantly in AA and below rated corporate debt securities across maturities.
- The asset allocation includes 65-100% in corporate bonds rated AA and below, and 0-35% in other debt and money market instruments.
- The investment strategy focuses on managing long-term capital with a view to provide superior yields across credit spectrum and maturities by investing in high yielding, less liquid corporate debt securities.
- The fund aims to manage risks associated with debt markets such as market,
IDFC Corporate Bond Fund_Key information memorandumJubiIDFCDebt
1. The document is a Key Information Memorandum for the IDFC Corporate Bond Fund, an open-ended debt scheme that predominantly invests in AA+ and above rated corporate bonds.
2. The fund seeks to provide steady income and capital appreciation by investing primarily in AA+ and above rated corporate debt securities across maturities.
3. The fund faces risks associated with investing in debt markets like market risk, liquidity or marketability risk, and credit risk. The fund aims to manage these risks through strategies like increasing allocation to money market securities in rising interest rate scenarios and focusing on securities with adequate liquidity.
IDFC Corporate Bond Fund_Key information memorandumIDFCJUBI
1. The document is a Key Information Memorandum for the IDFC Corporate Bond Fund, an open-ended debt scheme that predominantly invests in AA+ and above rated corporate bonds.
2. The fund seeks to provide steady income and capital appreciation by investing primarily in AA+ and above rated corporate debt securities across maturities. It aims to allocate assets among various fixed income instruments to optimize returns based on prevailing market conditions.
3. The fund faces risks associated with investing in debt markets like market risk, liquidity risk, and credit risk. It aims to manage these risks through strategies like increasing allocation to money market securities in rising interest rate scenarios and investing in securities with adequate liquidity.
IDFC Corporate Bond Fund_Key information memorandumTesssttest
The document provides a key information memorandum for the IDFC Corporate Bond Fund, an open-ended debt scheme that predominantly invests in AA+ and above rated corporate bonds. The fund seeks to generate medium to long term optimal returns through investments in high quality corporate bonds. It aims to provide steady income and capital appreciation. The fund allocates 80-100% of its assets to corporate bonds rated AA+/equivalent and above and 0-20% to other debt securities including government bonds and money market instruments. The fund invests using a strategy focused on credit spreads among available corporate bonds and aims to optimize returns through allocation across fixed income instruments.
The document contains charts showing the performance of the S&P 500 index over various time periods from 1926 to 2012. It provides rolling returns for 5-year and 10-year periods. The charts show that the index has fluctuated over time but generally increased in value, especially over longer periods. Standardized performance data is also presented along with disclosures about risks of investing in various funds, including market risk, small companies risk, and foreign securities risk.
Bonds tend to have less risk than stocks, but at the cost of less return. However, a proper use of certain kinds of bonds may temper the risk of your overall portfolio using diversification.
Blog post scheduled for 9 Sep 2015
http://wp.me/p2Oizj-CR
The document discusses stocks and bonds as the two main types of marketable securities, noting that while they have some similarities as financial instruments that enable investment, they differ significantly in aspects such as ownership structure, cash flow predictability, and risk level. Stocks represent ownership in a company and have uncertain dividends and capital appreciation, while bonds are essentially loans that guarantee periodic interest payments and return of principal, making them generally less risky than stocks.
- The document provides information on the Tulip Trend Fund A EUR, including its monthly net returns from 2002-2016, key figures such as annual returns and maximum drawdown, and fund facts.
- The fund uses a quantitative trend following strategy across global futures and forwards markets to participate systematically in trending markets.
- Over its lifetime, the fund has generated an annualized return of 1.558999% and maximum drawdown of -11.01%, with relatively low correlation to major stock and hedge fund indices.
The fund returned -10.8% in February, underperforming its benchmark. The short equity book and long equity book both made negative contributions after currency hedging. Within the short book, negative contributions came from Anglo American, Las Vegas Sands, and Royal Dutch Shell. Within the long book, negative contributions came from Nokia, Sky, and Bank of America. Elsewhere, active currencies returned -0.4% while government bonds and commodities returned +0.1% and +1.4% respectively. The manager remains convinced markets will continue to struggle without credit expansion and believes central banks have limited options to address slowing growth and falling productivity.
The portfolio manager discusses the Third Avenue Focused Credit Fund. They reiterate their commitment to maximizing value in the portfolio and returning capital to shareholders in a timely manner. Eight of the top ten holdings have restructured in the past two years, reducing debt levels. The manager believes the portfolio contains significant embedded value that will be realized as market conditions normalize and corporate events occur. They intend to provide transparency to shareholders through monthly fact sheets and quarterly commentary on the fund's website. The manager also discusses recent volatility in the high yield and distressed debt markets, noting that credit spreads spiked in 2015 but it is unclear if this will lead to recession or opportunity.
The document discusses the performance of the Odey European Inc fund in December 2015. It summarizes the positive and negative contributions from various long and short equity positions. It then analyzes economic and market conditions, including concerns about bubbles in China, falling oil prices, and central banks' responses to risky lending behaviors through interest rate policies. The document warns that markets may be fragile given high valuations and falling corporate profits, and that a significant market correction is possible in the coming year.
The document discusses the performance of the Odey European Inc fund in December 2015. It summarizes the positive and negative contributions from various long and short equity positions. It then analyzes economic and market conditions, including concerns about bubbles in China, falling oil prices, and central banks' responses to risky lending behaviors through interest rate policies. The document warns that markets may be fragile given high valuations and falling corporate profits, and that a significant market correction is possible in the coming year.
The fund returned +6.6% in August compared to -8.3% for the MSCI Europe index. Positive performance came from holdings in consumer discretionary (+4.2%), energy (+1.4%), and materials (+0.9%). Las Vegas Sands (+1.3%) and Sands China (+0.9%) were top performers, while Sky (-0.8%) and LM Ericsson Telefon (-0.4%) underperformed. The manager believes developed markets face earnings risk with high valuations and sees further global economic adjustments ahead, rather than the crisis being over, as China addresses debt, competitiveness and slowing growth issues in a deflationary environment.
El documento resume la evolución del fondo Gestión del Ciclo FI en mayo de 2015. Retrocedió un -0,22% en mayo debido a las caídas generalizadas en casi todos los activos. Sin embargo, su rentabilidad acumulada en 2015 sigue siendo del +5,65%, por encima de la media de su categoría. La liquidez, posiciones inversas en deuda alemana y estadounidense, y el oro ayudaron a limitar las pérdidas en mayo.
The fund lost money significantly in April (-19.3%) due to losses from its long USD position (-11.6%), short equity book (-7%), and Australian government bond positions (-0.9%). Positive individual stock positions such as Las Vegas Sands Corp. and Kellogg Company were outweighed by losses from stocks like Seadrill Ltd. and BG Group Plc. The document discusses challenges faced by the fund, changes made to reduce risk, and the manager's views on current market conditions and outlook.
30638 tl bill gross investment outlook may 2015-exp 5.30.16_3Frank Ragol
Bill Gross provides a lengthy outlook on the current state of investment markets and the economy. He argues that after 35 years, the great bull market that began in 1981 is showing signs of ending, with asset prices reaching unsustainable levels. While declines may not be imminent, future returns will likely be low. Investors should recognize the current "sense of an ending" and shift to more defensive strategies focusing on income rather than capital gains to better weather the changing environment.
Resultados consolidados banca en españa a 30 septiembreFrank Ragol
El documento presenta los estados financieros consolidados de los principales grupos bancarios españoles a septiembre de 2014. Entre los grupos analizados se encuentran Santander, BBVA, Sabadell, Popular, Bankinter y otros bancos españoles. Los estados muestran el activo, pasivo y patrimonio de cada grupo, incluyendo partidas como caja, depósitos bancarios, cartera de inversión, créditos y préstamos otorgados, depósitos de clientes, y capital social.
This document provides a summary of major systemic risks in the global economy as seen by the author. It discusses how systemic risk was transferred from the private sector to governments and how investors are engaging in "cognitive dissonance" by acknowledging past excesses but preventing rational deleveraging. The author outlines several fault lines including aggressive monetary policies, the risks of zero interest rate policies, the limits of deficit spending, and debt levels around the world. While opportunities still exist, the author advises exercising caution given expected volatility in 2011.
- Greif, Inc. (GEF) has engaged in a large acquisition spree over the past decade, spending over $1.2 billion to acquire 40 companies. However, GEF has provided limited disclosure to investors about these acquisitions.
- GEF appears to have obfuscated and revised the financial performance and costs of its acquisitions. In one example, it increased the reported purchase price of 2010 acquisitions by $98 million through a misleading presentation.
- With high acquisition debt on its balance sheet, GEF may be vulnerable in a weaker economic environment. It derives around 55% of sales from foreign markets, exposing it to currency risks from a stronger US dollar.
Third point-q4-2014-investor-letter-tpoiFrank Ragol
This letter summarizes Third Point LLC's investment results and outlook for 2015. In 2014, Third Point achieved mid-single digit returns due to poor performance during market volatility and prematurely exiting some positions. Already in 2015, markets have been highly volatile. Third Point is focusing on companies with strong cash flows and consistent growth, and looking to take advantage of market dislocations. The letter discusses two of Third Point's largest equity positions - Amgen and Fanuc.
The document summarizes the performance of the Odey European fund for December 2014. The fund returned +11.7% for the month compared to the MSCI Europe return of -1.4%. Active currency positions contributed significantly to returns, particularly positions in AUD/USD and USD/ZAR. Short equity positions also contributed positively, while long equity positions made a smaller but still significant contribution. The manager believes a slowdown in the Chinese economy and falling commodity prices will negatively impact commodity-producing economies and their trading partners, leading to a global recession. Central banks have limited ability to counter this downturn through monetary policy. The manager remains short-biased on equities and bearish on commodity-related sectors and EM
- The SKAGEN Global fund underperformed its benchmark index in November, rising 1.1% compared to the index's 2.4% gain. Weak Russian and oil-related stocks contributed to the underperformance.
- Year-to-date the fund has gained 7.2%, lagging the benchmark index by 10.4%.
- Samsung Electronics was the top positive contributor in November while Weatherford was the largest detractor.
- The fund managers continued reducing smaller positions and increasing the concentration of larger holdings in the top 10.
- The document discusses lessons that can be learned from recent fluctuations in oil prices, specifically how few predicted the large decline in prices.
- It notes that consensus forecasts often only make small incremental changes rather than considering order-of-magnitude shifts, and few foresaw how low oil could fall.
- The author outlines various direct and indirect consequences of lower oil prices across many industries and economies to illustrate how difficult it is to anticipate all potential impacts and ramifications.
The fund returned 2.4% in October, outperforming the MSCI World Index which returned 2%. Long positions positively contributed, notably in Plus500, Regus, and Ethan Allen. Short positions in 10-year Treasury futures and Australian banks detracted from performance. Overall, the fund has outperformed its benchmark since inception with a net annualized return of 21.3% compared to 12.6% for the index.
The fund returned 2.4% in October, outperforming the MSCI World Index which returned 2%. Long positions positively contributed, notably in Plus500, Regus, and Ethan Allen. Short positions in 10-year Treasury futures and Australian banks detracted from performance. Overall, the fund has outperformed its benchmark since inception with a net annualized return of 21.3% compared to 12.6% for the index.
This document is a quarterly letter from GMO discussing potential investment environments and their implications. It presents two potential scenarios - "Purgatory" where interest rates rise gradually from very low levels, and "Hell" where rates remain near zero forever.
Under the "Hell" scenario of permanently low rates, traditional stock and bond allocations would still be reasonable investments. However, expected returns would be lower across all assets. Under the "Purgatory" scenario, current valuations would need to fall as rates rise, so returns over the next 7 years would be worse than in "Hell" though better over the long-run. The appropriate portfolio depends on the scenario, with lower allocations to stocks and bonds in
Este documento presenta datos estadísticos sobre el tráfico de pasajeros, operaciones y carga en los aeropuertos españoles en 2013. Los aeropuertos con mayor tráfico de pasajeros fueron Adolfo Suárez Madrid-Barajas, Barcelona-El Prat y Palma de Mallorca. En general, la mayoría de los aeropuertos tuvieron una ligera disminución en el tráfico de pasajeros en 2013 en comparación con 2012. El tráfico total de pasajeros en todos los aeropuertos españoles fue de
Optimizing Net Interest Margin (NIM) in the Financial Sector (With Examples).pdfshruti1menon2
NIM is calculated as the difference between interest income earned and interest expenses paid, divided by interest-earning assets.
Importance: NIM serves as a critical measure of a financial institution's profitability and operational efficiency. It reflects how effectively the institution is utilizing its interest-earning assets to generate income while managing interest costs.
The Universal Account Number (UAN) by EPFO centralizes multiple PF accounts, simplifying management for Indian employees. It streamlines PF transfers, withdrawals, and KYC updates, providing transparency and reducing employer dependency. Despite challenges like digital literacy and internet access, UAN is vital for financial empowerment and efficient provident fund management in today's digital age.
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Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
2. This presentation uses MBIA, Inc. (“MBIA” or the “Company”) as a case study to illustrate Fairholme Capital Management’s investment strategy for each of
The Fairholme Fund, The Fairholme Focused Income Fund (“The Income Fund”), and The Fairholme Allocation Fund (“The Allocation Fund”), (each a “Fund”
and collectively, the “Funds”). In the pages that follow, we show the Funds’ shareholders why we “Ignore the crowd” with regard to our portfolio positions
that are currently out of favor in the market.
However, nothing in this presentation should be taken as a recommendation to anyone to buy, hold, or sell certain securities or any other investment
mentioned herein. Our opinion of a company’s prospects should not be considered a guarantee of future events. Investors are reminded that there can
be no assurance that past performance will continue, and that a mutual fund’s current and future portfolio holdings always are subject to risk. As with
all mutual funds, investing in the Funds involves risk including potential loss of principal. Opinions expressed are those of the author and/or Fairholme
Capital Management, L.L.C. and should not be considered a forecast of future events, a guarantee of future results, nor investment advice.
The Funds’ holdings and sector weightings are subject to change. As of May 31, 2012, MBIA securities comprised 3.0% of The Fairholme Fund’s total net
assets, 37.4% of The Income Fund’s total net assets, and 29.3% of The Allocation Fund’s total net assets. The Funds’ portfolio holdings are generally
disclosed as required by law or regulation on a quarterly basis through reports to shareholders or filings with the SEC within 60 days after quarter end. A
complete list of the Funds top ten holdings is available on our website at www.fairholmefunds.com.
The Fairholme Fund is non-diversified, which means that it invests in a smaller number of securities when compared to more diversified funds. Therefore,
The Fairholme Fund is exposed to greater individual stock volatility than a diversified fund. The Fairholme Fund also invests in foreign securities which
involve greater volatility and political, economic and currency risks and differences in accounting methods. The Fairholme Fund may also invest in “special
situations” to achieve its objectives. These strategies may involve greater risks than other fund strategies.
The Income Fund is a non-diversified mutual fund, which means that the Income Fund invests in a smaller number of securities when compared to more
diversified funds. This strategy exposes the Income Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio
companies. The Income Fund's investments are also subject to interest rate risk, which is the risk that the value of a security will decline because of a
change in general interest rates. Investments subject to interest rate risk will usually decrease in value when interest rates rise and rise in value when
interest rates decline. Also, securities with long maturities typically experience a more pronounced change in value when interest rates change. Debt
securities are subject to credit risk (potential default by the issuer). The Income Fund may invest without limit in lower-rated securities. Compared to
higher-rated fixed income securities, lower-rated debt may entail greater risk of default and market volatility.
The Allocation Fund is a non-diversified mutual fund, which means that the Allocation Fund can invest in a smaller number of securities when compared to
more diversified funds. This strategy exposes the Allocation Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio
companies. The allocation of investments among the different asset classes, such as equity or fixed-income asset classes, may have a more significant effect
on the Allocation Fund’s net asset value when one of these classes is performing more poorly than others.
The Funds’ investment objectives, risks, charges, and expenses should be considered carefully before investing. The Prospectus contains this and other
important information about the Funds, and may be obtained by calling shareholder services at (866) 202‐2263 or by visiting our website at
www.fairholmefunds.com. Read it carefully before investing.
Fairholme Distributors, LLC (08/12)
FAIRHOLME Ignore the crowd.
3. * Please see last slide for definition and terms.
** Bruce R. Berkowitz, FAIRHOLME, June 9, 2011.
FAIRHOLME Ignore the crowd.
Market Capitalization *
MARKET PRICE INTRINSIC VALUE *
“INVESTING IS ALL ABOUT WHAT YOU GIVE VERSUS WHAT YOU GET.” **
Net Asset Values
Run-off Insurance
Run-off Derivatives
New Business
Legal Structures
1
4. MBIA INC.
CORPORATE STRUCTURE
FAIRHOLME Ignore the crowd.
NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION
(Non-Recourse to MBIA Inc.)
$5.7 billion in claims paying resources *
$3.0 billion in statutory capital *
$352 million in liquidity *
Cumulative loss experience on U.S. Public Finance
exposure of 0.03% since inception
$100+ billion per year market potential for new
business
MBIA INSURANCE CORPORATION
(Non-Recourse to MBIA Inc.)
$5.2 billion in claims paying resources
$1.7 billion in statutory capital
$534 million in liquidity
Mitigating remaining future loss volatility
Litigation upside
MBIA INCORPORATED
2
ADVISORY SERVICES
CUTWATER
* Please see last slide for definition and terms.
CORPORATE
OPERATIONS
WIND-DOWN
OPERATIONS
U.S. PUBLIC FINANCE INSURANCE STRUCTURED FINANCE & INTERNATIONAL INSURANCE
5. CATALYST #1
NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION
A STAND ALONE SUBSIDIARY OF MBIA INC.
FAIRHOLME Ignore the crowd.
Party Status
Rabobank Withdrawn
SMBC Capital Markets Withdrawn
Canadian Imperial Bank of Commerce Withdrawn
JP Morgan Chase Withdrawn
Barclays Bank Withdrawn
Royal Bank of Canada Withdrawn
Citibank Withdrawn
KBC Investments Withdrawn
Credit Agricole Withdrawn
Wells Fargo (f/k/a Wachovia) Withdrawn
Royal Bank of Scotland (also f/k/a ABN Amro) Withdrawn
HSBC Bank Withdrawn
Morgan Stanley Withdrawn
BNP Paribas Withdrawn
UBS Withdrawn
Natixis Withdrawn
Societe Generale Ongoing
Bank of America Ongoing
PLAINTIFFS OPPOSING MBIA TRANSFORMATION
As of August 2012
National is legally, financially, and
operationally separate from
MBIA Insurance Corporation.
Judicial Confirmation of MBIA Inc.’s
Transformation Could Lead to:
An Increase in Credit Ratings
Lower Expenses
Capital Raise
New Municipal Business
3
6. CATALYST #1 (CONTINUED)
NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION
A PROFITABLE, STABLE, AND VALUABLE ENTERPRISE
FAIRHOLME Ignore the crowd.4
$0
$5
$10
$15
$20
$25
$30
2008 2009 2010 2011 H1 2012
$pershare
Growth in National’s Book Value Since 2008
Adjusted Book Value GAAP Book Value
MBIA Inc.’s common stock currently trades at 44% of
National’s Adjusted Book Value. *
GAAP Book Value for National has grown at an
average of 15% per year since 2008. *
“2012 insured penetration remains reasonable
given only one active insurer.” ** During Q2 2012,
Assured Guaranty underwrote $4.7 billion in public
finance policies.
National is poised to provide much needed supply
of financial guarantee insurance to the municipal
market.
* As of 8/24/2012, MBIA Inc. stock price was $10.55. Please see last slide for definition and terms.
** National Public Finance Guarantee Corporation, Investor Presentation, August 2012.
Since 2010
New Business Opportunities
Municipal Issuance Insurable Potential *
$926,000,000,000
$390,000,000,000
7. CATALYST #2
MBIA INSURANCE CORPORATION
DE-RISKING
$0
$50
$100
$150
$200
$250
$300
$350
2007 2008 2009 2010 2011 H1 2012
$inbillions
"As a result of commutation activity, our exposures to the riskiest CMBS pools and ABS CDOs have been reduced
substantially. At this point, the CMBS exposures with the most significant potential future claims are with a single
counterparty — a Bank of America subsidiary — whose affiliate, Countrywide, is currently in default of its contractual
obligations to repurchase billions of dollars of ineligible mortgages from securitizations insured by MBIA Corp.”
- C. Edward Chaplin, Chief Financial Officer, MBIA Inc., August 8, 2012
FAIRHOLME5 Ignore the crowd.
8. $0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2007 2008 2009 2010 2011 H1 2012
$inmillions
Gross Loss Payments on Insured Exposures
(Excluding Second-Lien RMBS)
MBIA Insurance exchanges cash in order to
terminate CMBS, CRE CDO, ABS CDO and
subprime RMBS insurance contracts, which
reduces volatility. *
Since 2007, MBIA Insurance has paid $5 billion
to terminate $68 billion insurance policies.
Within MBIA’s current loss expectations for
insured CMBS, Bank of America constitutes the
largest remaining loss exposure.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2007 2008 2009 2010 2011 H1 2012
$inmillions
Declining Claim Payments on Second-Lien RMBS
As an insurer of financial obligations, MBIA
Insurance pays defaulted obligations as they
come due.
Claims paid on Second-Lien RMBS have declined
by 69% since 2009.
Bank of America and its subsidiaries represent
over 60% of the total claims paid since 2007.
CATALYST #2 (CONTINUED)
MBIA INSURANCE CORPORATION
DE-RISKING
FAIRHOLME6 Ignore the crowd.* Please see last slide for definition and terms.
9. Since 2007, MBIA Insurance has paid $6.5 billion of gross claims on policies insuring second-lien
RMBS securitizations.
Within those securitizations that have incurred insurable losses, MBIA believes that the vast majority
(in some cases over 90%) of the underlying mortgage loans failed to comply with the representations and
warranties made by the seller/servicers of the securitizations to which those mortgage loans were sold. *
MBIA carries $3.2 billion of the $6.5 billion of gross claims paid as a receivable. This expected
recovery amount – which is conservatively recorded when compared to the reality of recovery
expectations – is reviewed and approved by the New York State Department of Financial
Services and PricewaterhouseCoopers on a quarterly basis.
Fairholme expects MBIA to recover at least half of the gross claims paid to date in a 2012
settlement or all in a 2013 trial.
CATALYST #3
MBIA INSURANCE CORPORATION
REIMBURSEMENT FOR CLAIMS PAID
FAIRHOLME Ignore the crowd.
“Recent legal settlements paid and reserves taken by defendants are convincing skeptics
of the company’s ability to more than just survive.”
- Bruce R. Berkowitz, FAIRHOLME, January 26, 2012
7
* Jay Brown, Chief Executive Officer, MBIA Inc., March 20, 2012, & August 8, 2012.
.
10. FAIRHOLME Ignore the crowd.
COUNTERPARTY RESPONSIBILITY TO INSURERS
Insurance is the business of pricing risk; and it cannot function efficiently if the insured conceals or misrepresents the
risks a policy covers. State of New York law provides than an insurer has an interest in receiving complete and accurate
information before deciding whether to issue a policy. *
FAVORABLE LEGAL PRECEDENT
On June 19, 2012, the Southern District of New York ruled in Syncora Guarantee v. EMC Mortgage Corporation that a
residential mortgage originator that securitized mortgage-backed securities (“MBS”) could be liable for alleged
breaches of representations and warranties it made to the insurance company that insured principal and interest
payments to investors in the MBS, and could be forced to repurchase mortgages even if (a) the breaches did not cause
the underlying mortgages to default and (b) the underlying mortgages have not yet defaulted.
INCREASED PRESSURE ON MORTGAGE ORIGINATORS
On July 27, 2012, O'Melveny & Myers LLP (legal counsel to Bank of America) circulated a “Client Alert” noting that
institutions involved in lawsuits similar to Syncora “may wish to re-evaluate their exposure, and possibly adjust
reserves set aside to cover such risks, based on the type of plaintiff and the specific language in the securitization
agreements at issue.”
CATALYST #3 (CONTINUED)
MBIA INSURANCE
REIMBURSEMENT FOR CLAIMS PAID
8
* Syncora Guarantee v. EMC Mortgage Corporation, Opinion & Order, June 19, 2012.
11. Who is Examining MBIA Inc.?
Securities and Exchange Commission
New York State Department of Financial
Services
PricewaterhouseCoopers
Credit Rating Agencies
Who is Examining the Counterparties?
Securities and Exchange Commission
Federal Reserve Bank of New York
Federal Deposit Insurance Corporation
U.S. Department of the Treasury
Office of The Special Inspector General for the
Troubled Asset Relief Program
Auditors
Credit Rating Agencies
Judicial Review
New York Supreme Court Appellate Division,
First Department
United States Federal Court System
Expert Third Party Testimonies
Outside Consultants
Precedent Outcomes
Government Sponsored Entity
Settlement (December 2010)
Assured Guaranty Settlement
(April 2011)
Bank of New York Mellon/Bank of
America Settlement (June 2011)
State Attorney General Settlement
(February 2012)
Syncora Guarantee Settlement
(July 2012)
Increased Counterparty
Representation and Warranty
Reserves (2010-2012)
CHECKS AND BALANCES
FAIRHOLME9 Ignore the crowd.
12. FAIRHOLME Ignore the crowd.
OWNERS’ EQUITY
Non-Guarantor Divisions
Intact Franchise
Intact Business Models
CONTINGENCY RESERVES
$1.8 Billion of Statutory Capital
Not in Owners’ Equity Between
National and MBIA Insurance.
RUN-OFF EARNINGS
$3.5 Billion+ of Unearned
Premiums & Mark-To-Market
Reversals Not in Owners’ Equity
TRENDS
Stable Municipal Insurer
Stabilizing Asset Guarantor
Winning Every Meaningful Legal
Decision to Date
Potential New Business in 2013
Improving Macro Environment
10
MARKET PRICE INTRINSIC VALUE
13. FAIRHOLME
Adjusted Book Value (ABV): ABV, a non-GAAP measure, is used by the Company to supplement its analysis of GAAP book value. The
Company uses ABV as a measure of fundamental value and considers the change in ABV an important measure of periodic financial
performance. ABV adjusts GAAP book value to remove the impact of certain items which the Company believes will reverse over time,
as well as to add in the impact of certain items which the Company believes will be realized in GAAP book value in future periods. The
Company has limited such adjustments to those items that it deems to be important to fundamental value and performance and which
the likelihood and amount can be reasonably estimated. ABV assumes no new business activity. The Company has presented ABV to
allow investors and analysts to evaluate the Company using the same measure that MBIA’s management regularly uses to measure
financial performance. ABV is not a substitute for and should not be viewed in isolation from GAAP book value.
ABV is calculated on a consolidated basis and a segment basis. ABV by segment provides information about each segment’s
contribution to consolidated ABV and is calculated using the same formula.
ABV per share represents that amount of ABV allocated to each common share outstanding at the measurement date.
Collateralized Debt Obligations (CDO): A debt instrument that is secured (collateralized) by a pool of other securities, typically loans
and bonds. CDOs can include all types of loans and bonds, including high-yield bonds, emerging market bonds, asset-backed
transactions and middle-market bank loans. Collateralized Bond Obligations (CBOs), Collateralized Loan Obligations (CLOs), and
Collateralized Mortgage Obligations (CMOs) are types of CDOs.
CDO-Commercial Real Estate (CRE): Transactions secured by a diversified pool of commercial real estate-oriented loans and/or bonds.
Transactions are actively managed pools of collateral with a Collateralized Debt Obligation (CDO) structure with first loss positions
provided by subordinated tranches. Transactions are usually managed pools with reinvestment permitted subject to Eligibility Criteria.
Claims-Paying Resources (CPR): CPR is a key measure of the resources available to National and MBIA Corp. to pay claims under their
respective insurance policies. CPR consists of total financial resources and reserves calculated on a statutory basis. CPR has been a
common measure used by financial guarantee insurance companies to report and compare resources and continues to be used by
MBIA’s management to evaluate changes in such resources. The Company has provided CPR to allow investors and analysts to evaluate
National and MBIA Corp. using the same measure that MBIA’s management uses to evaluate their resources to pay claims under their
respective insurance policies. There is no directly comparable GAAP measure.
Commercial Mortgage Backed Securities (CMBS): A type of mortgage-backed security, the word is used to distinguish it from
residential mortgage-backed securities (RMBS). Commercial mortgages represent mortgage loans for non-residential properties such as
office buildings, retail stores, etc.
Ignore the crowd.11
14. FAIRHOLME
Contingency Reserves: Reserve in excess of legal requirements to provide for unexpected contingencies
GAAP Book Value: The net asset value of a company, calculated by total assets minus total liabilities.
Insurable Potential: Total insurable amount of municipal issuances.
Intrinsic Value: The value of a security based on an underlying analysis of all aspects of the business distinct from market value.
Liquidity: MBIA Inc. defines liquidity as beginning cash and cash equivalents plus or minus the surplus or deficit from operations within
the fiscal year plus other assets with expected maturities of less than 12 months deemed to be liquid but not included in cash and cash
equivalents.
Market Capitalization: The total value of a company’s publicly-traded shares outstanding.
Residential Mortgage Backed Securities (RMBS): A type of mortgage-backed security composed of a wide array of different
noncommercial mortgage debts. It securitizes the mortgage payments of noncommercial real estate. Different residential mortgages
with varying credit ratings are pooled together and sold in tranches to investors looking to diversify their portfolios or hedge against
certain types of risks.
Statutory Capital: Statutory capital and surplus differs from stockholder's equity determined under GAAP principally due to statutory
accounting rules that treat loss reserves, premiums earned, policy acquisition costs, deferred income taxes and investment carrying
values differently. Statutory capital consists of net income plus capital and surplus as well as contingency reserves.
12 Ignore the crowd.