By Chris Bryant Tara Lachapelle – The global M&A boom has left a giant footprint on corporate balance sheets, and we’re not just talking about all that debt. Goodwill — the difference between what assets are worth on paper and how much an acquirer paid for them — is also soaring, and that could spell trouble for corporate earnings.
At S&P 500 companies, goodwill has risen by two-thirds over the past decade and accounts for more than one-third of net assets.
In the past two years, takeover targets have sold for a median of 11 times Ebitda — essentially 11 years of profit — whereas the multiple was only about 7-9 times in the years leading up to the recent merger frenzy.
As for who’s sitting on the most absolute goodwill, beer takes the cake. Anheuser-Busch InBev SA’s goodwill doubled to a cool $136.5 billion after its $100 billion takeover of SAB Miller Plc.
Impairments deplete shareholder equity, which makes lenders and bondholders nervous. Companies that financed takeovers with lots debt are particularly exposed. more> https://goo.gl/Ube7e8
Posted in Banking, Business, Economy, Education, History, Leadership, Media, Net
Tagged Business, Capital, Debt, Financial crisis, Government, Leadership, M&A
By Josh Pacewicz and Stephanie Lee Mudge – Many struggling U.S. cities and states compete fiercely with one another to attract and keep firms that offer jobs. Unfortunately, these are not the “good” jobs that Americans are looking for, jobs with middle-class pay, benefits and security.
This race to the bottom drains public coffers, preoccupies local leaders and fuels voter cynicism. “America First” sidesteps the problem.
Since the corporate mergers and restructurings in the 1980s, most cities depend not on one or two large factories but on many small subsidiary operations — light manufacturing, food processing, professional service firms, call centers, hotels and retail. These smaller subsidiaries mostly move between struggling cities and towns rather than leaving for other countries.
Much of the blame for that falls on federal policy. Unions have been hobbled by a changing legal environment. A corporate merger wave unleashed by financial deregulation eliminated local owners who paid workers living wages and contributed generously to their towns.
Tax code changes led to ballooning senior managers’ earnings at the expense of line-workers’ wages. Without changing the federal policies that led to these trends, bringing manufacturing back will not create good, safe jobs. more> https://goo.gl/leRpP1
Posted in Banking, Business, CONGRESS WATCH, Economic development, Economy, History, Leadership, Media, Regulations
Tagged Business, Capital, Congress Watch, Donald Trump, Government, Jobs, Leadership, M&A, United States
By Tim Fernholz – While the US taxes imported cars and cars parts at a maximum of 2.5%, China charges tariffs of between 21% and 30%. This gives foreign automakers who want to sell in China a big incentive to manufacture there to avoid the import charge. But China also requires foreign subsidiaries to operate as 50-50 joint ventures with Chinese companies. These, of course, then become classrooms for Chinese engineers to gain foreign know-how.
This isn’t exactly anyone’s definition of “fair” trade, but there is a logic to the situation. The system came into play in 2001, after China joined the World Trade Organization. At the time, Chinese industry was much further behind America’s. The idea was that future rounds of WTO negotiations would lower China’s trade barriers further, but global trade talks have stagnated completely.
Ironically enough, therefore, this “unfair” situation for America is a product of globalization’s stumbles, not the unyielding march forward that the Trump administration portrays it as.
And any attempts to convince China to drop its protections will now be coming from the most protectionist American administration in recent memory. more> https://goo.gl/7Supvh
Posted in Business, CONGRESS WATCH, Economic development, Economy, History, Leadership, Media, Net, Product, Technology, Transportation
Tagged Business, China, Congress Watch, Donald Trump, Government, Industrial economy, Jobs, Technology
By John Yates +- an define science as the systematic study of the natural world through observation and experiment, yielding an organized body of knowledge on a particular subject. The human mind is undeniably a suitable subject for scientific study, and one purpose of meditation is careful observation of one’s own mind.
This observation reveals consistent patterns that meditators share with one another and with teachers who direct their practice.
However, meditation is not simply passive observation, nor could it be, since the very act of observation is itself an activity of mind. Rather the meditator intentionally employs attention, awareness, and other mental faculties in a variety of ways to better understand the functional behavior of the mind. more> https://goo.gl/Pp47U6