Normally, banks record profits on loans only as they are repaid, whether they securitize the loans or hold them on their books. – Alex Berenson
Robert M. Morgenthau, the Manhattan district attorney, has seen a few financial schemes in his time. As the lead local prosecutor in the world’s financial capital, he has battled frauds like the Bank of Credit and Commerce International, which stole billions of dollars from investors worldwide. – Alex Berenson
Most companies can survive even if their debt ratings are lowered below investment grade, although they will have higher borrowing costs. – Alex Berenson
Lower interest rates are usually considered good for stocks because they lower the cost of borrowing and make bonds a less attractive alternative investment. – Alex Berenson
Companies buy customers when they cannot win new business on their own. They merge when their executives do not have a better idea of what to do. – Alex Berenson
Wal-Mart does not do big mergers, though it will buy much smaller competitors in so-called ‘tuck-in acquisitions.’ – Alex Berenson
Automated call centers are only the most obvious way speech recognition will be used. The software is now becoming sophisticated enough to identify speakers through ‘voiceprints,’ akin to fingerprints, eventually reducing the need for personal identification numbers. – Alex Berenson
Of all the big Internet companies, Yahoo is the most highly valued on a price-earnings and price-sales basis. – Alex Berenson
The American pledge not to negotiate with terrorists has been honored more in the breach than the observance from the moment President Ronald Reagan made it. – Alex Berenson
To economists, prices serve as crucial signals to producers and consumers. In a regulated market, the state sets prices high enough for private companies to cover their costs and earn a guaranteed profit for their investors. But in a deregulated market, prices should vary with demand and supply. – Alex Berenson
Like many other banks and finance companies, Green Tree used a process called securitization to resell its home loans to outside investors. Green Tree grouped thousands of these small loans into a pool worth hundreds of millions of dollars. – Alex Berenson
The biggest profit center for investment banks is the hefty fees they charge for underwriting stock offerings and giving financial advice, and analysts put those profits at risk if they publish negative conclusions about the companies that pay the fees. – Alex Berenson
Most unfortunately, Enron’s plunge into bankruptcy court also cost many of its rank-and-file employees their savings. – Alex Berenson
The lower spreads mean lower costs for investors, because Nasdaq investors generally do not trade directly with one another. Instead, they usually buy and sell from market-makers, brokerage firms that flip shares between buyers and sellers and keep the spread for themselves. – Alex Berenson
Big banks have long had private equity divisions that put up capital for deals too complex or risky for individual shareholders to finance. – Alex Berenson
The thing to do with mutual funds is to buy a couple of decent ones, set up an investment plan and then never, ever think about them again, except maybe once a quarter or so when you take a peek at your statements to make sure that you have not accidentally been buying the Fidelity Peace-in-the-Middle-East fund. – Alex Berenson
To finance deficits, the government must sell bonds to investors, competing for capital that could otherwise be used to invest in stocks or corporate bonds. Government borrowings raise long-term interest rates, stifling economic growth. – Alex Berenson
Volatility may be rising simply because investors must digest more information every day. – Alex Berenson
Sochi started with the same problem as every Winter Olympics. Forget the crass commercialism, the fake amateurism, NBC’s refusal to televise important events live to all its viewers. As an event, the Winter Games fail on the most basic level. They’re lousy to watch. – Alex Berenson
Good spectator sports share certain fundamentals. Their competitors battle head-to-head. Their winners are determined objectively: fastest runner, most points. They are refereed, not judged. – Alex Berenson
John W. Snow was paid more than $50 million in salary, bonus and stock in his nearly 12 years as chairman of the CSX Corporation, the railroad company. During that period, the company’s profits fell, and its stock rose a bit more than half as much as that of the average big company. – Alex Berenson
The market always, in theory at least, looks ahead. And it’s always trying to take in every bit of information that it can as quickly as it can. You don’t really care so much if the company made a dollar last year; you want to know what it’s going to make this year. – Alex Berenson
Over the years, I’ve spent time in Saudi Arabia, the Bekaa Valley, Afghanistan, Jordan, and Kenya, among other vacation hotspots. – Alex Berenson
The fact that we haven’t faced another major terrorist attack on American soil since Sept. 11 is a very significant achievement, and one that’s easy to forget – it’s the dog that doesn’t bark. – Alex Berenson
Also, most people read fiction as an escape – and I wonder whether my books aren’t a bit too grounded in reality to reach the widest possible audience. – Alex Berenson
I think when you have lawyers arguing over whether you can keep a detainee at 46 degrees… for two hours, that’s not torture. It may be unpleasant, it may be coercive… but let’s say what torture actually is, and that’s not it. – Alex Berenson
Trust the Canadians to produce a game about mutual funds that is actually more boring than the real thing. – Alex Berenson
Some companies use off-balance-sheet partnerships to raise money or to buy assets without ever telling their shareholders in their financial statements. – Alex Berenson
On the New York Stock Exchange, all buy and sell orders are routed through a single ‘specialist,’ guaranteeing that most small trades can be matched directly. But most larger trades are delivered to the specialist on the floor of the exchange by human brokers, a system that big investors view as increasingly inefficient. – Alex Berenson
