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Showing posts from October, 2009

100th POST: The Failure of Corporate Governance in Banking Sector

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Pictures : Fat Cats, nickname to greedy directors that weren't governed effectively




-applicable to P1 (ACCA)
My Blog's 100th POST! Time flies. Experience increases. Expertise sharpens. These bound to happen, as lecturers or students alike when you do research and explain your analysis. I must say, more than 12 years in lecturing profession has been enriching in knowledge and enjoyable in teaching/guiding my students to ACCA SUCCESS.

Let's see the article below extracted from Economists.com. Read it and see what recommendations you can forward to improve the Corporate Governance. The bankers - fat cats have been notorious in taking 50% of accumalated profits past 10 years and leaving 50% for its owners. When the finance sector collapsed, causing the destruction of billions of shareholders' wealth, these fat cats Directors cooly walked away unscathed!

The governmments namely UK & USA scrambled to pump in billions of dollars aid to prop up the banks. As a side note, Dr. …

Canon may follow Xerox's Acquisition trail –Awaiting Disaster?

- related to P3 (BA)

P3 (Business Analysis, ACCA) Paper in action
Many businesses failed to ask a simple basic but paradoxically difficult question, “What business are we in?” using visions, mission statement and corporate objectives are mere tools to communicate but they fail when Board lacks the commitment and drive. Worse yet, according to Sally Yeung and Andrew Campbell, such statements made are mere ‘lip-service’.

The case study below shows how a distressed company, Canon, tries to re-identify itself. It didn’t want to sell boxes of Information Technology equipment but takes a step further in saying, “Why customers need us?”

In P3 (Business Analysis, ACCA) Paper, there is a real chance of this type of question tested. So familiarise yourself with this topic from the excerpt edited report. Enjoy...

Following the Joneses : Canon’s re-positioning process
Recall Porter’s critique that acquisitions generally destroys shareholders’ value. Well, despite empirical evidence, many firms never …

Government's TOP 10 Recovery Strategies

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Pic 01 (left) : Hmmm... is it Debit or Credit?
Pic 02 (Right): Boys, oh boy... you have a long way to go



Recession may not be a bad word. Japan, South Korea experienced economic disasters after World War II and Korean War respectively. WIth zilch and only armed with human spirit, both countries grew phenomenally over 3 decades since the 1950's.

TOP 10 Actions
Having seen all of the above, Malaysian Government can do wonders to turn around the economy:

1. At least a 9% budget deficit spending to compensate the weak aggregate demand of consumptions and investments. Note this must continue for at least 3 years, as threats of inflation is low due to liquidity trap situation which is an increase in money supply may not increase threat of interest rate hikes.

2. Keep interest rates low to below 2% ie many local banks offering rates at BLR less 2% with intention to stimulate loan demand.

3. Focus on infrastructure development in lagging states especially Penang, Johor, Kelantan and Trenggan…

Nobel Prize-winning economist – Horrifying Prognosis

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From left to right:
Pic 01 - 03 : Great Depression of 1930s. People lining up for food rations from USA government. We don't hope for this in Malaysia, which is only a developing nation. So shouldn't you ration your pocket money? Stretch it further?

Pic 04: Renown Economist, Paul Krugman


Nobel Prize-winning economist Paul Krugman said damage from the U.S. recession may persist “for a very long time,” with no clear engine for renewed growth.

“I’m really quite scared that we could muddle along,” Krugman said in a lecture today at the London School of Economics and Political Science. “I really do see the possibility of a global version of the Japanese ‘lost decade’ without the prospect of an export-led recovery. This could be unpleasant for a very long time.”

U.S. stocks erased a decline yesterday after Krugman said the economy will probably emerge from the recession by September. Recent reports showing smaller declines in housing and manufacturing and fewer job losses have reinforc…

Recession- What it means? Part II

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(left to right)
Pic 01: You think this is tough, boy, wait until you reach ACCA level
Pic 02: Arrgghhh...This kids drive me up the wall.
Pic 03: To our happiness...Pic 04: Beautiful, Wonderful and Meaningful evening
Pic 05: President Obama's deficit spending is too little, too late

Recession Explained
Why do factories close down despite that high quality products are churned out? Why hardworking people are laid off from work, a waste of human talents that go unemployed? Why good location properties have few tenants? Puzzling as these questions are, but the economist will say it’s due to recession. Inspired and horrified by Economist Nobel Laureate Paul Krugman’s book – The Return of Depression Economics, allow me explain it in simple terms:

Romantic Couples and Babysitter Couples
Say in Singapore, there is this exclusive club where couples are of the upper middle income earners. These couples have children and they don’t trust hiring babysitters. This is inconvenient if couples want to sp…