Charles D asked:


I read FT partly to get myself up to speed on the finance most biz majors learn their first year of school. I came across this passage which has several concepts that go over my head.

“But even following the plan to convert preferred shares to common equity, Citi will have $80B of tangible equity versus assets of $2T. With Citi’s consumer bias, that is still worryingly geared.”

This passage concentrates much that I don’t know into a small space. What is the significance of the stock conversion; because it would reduce Citi’s expenses by reducing their dividend payments? Why is the ratio of tangible equity to assets concerning? (I guess I find this puzzling b/c I thought all assets qualify as tangible equity. Is the difference b/n the two the claims against the assets?) Why does the consumer bias of Citi’s services make it more worrying? (By “consumer bias” I presume is meant they emphasize retail services over commercial clients.) Why do they use the qualifier “tangible”? Is this to distinguish it from equity raised through stock issues?

Thanks a million! (And if you’d prefer I break up the questions for more points, just ask.)

Mathew

cruachanmusic asked:


I blame the following from most to blame to least to blame:

1) Unions: unsklled assembly workers getting $70000+ a year to do something a monkey could do. Theres your problem. How can any company survive with these greedy slackers?
Companies have been forced to put cheaper parts in their cars leading to a lower quality, just to finance these insane wages for a bunch of greedy unions.

2) Design: Concerntrating on SUV’s and really doing nothing new with their car designs in the last 20 years has meant that N.A. auto manufacturers have no longer got the attention of car buyers. They seem boring.

3) Oil prices: Killed whatever buying of SUV’s was keeping the companies afloat. Also increased their freight costs, their raw materials costs etc.

4) Import ingenuity: Lets face it; Toyota, Hyundai, Honda etc. have simply cut the fat, streamlined operations, designed well around consumer needs, and have great cars at a great price.

Charles