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Showing posts from December, 2019

US Economy Outlook

The U.S. economic outlook is healthy according to the key  economic indicators . The most critical indicator is the  gross domestic product , which measures the nation's production output. The  GDP growth rate  is expected to remain between the 2% and 3%  ideal range . Unemployment is forecast to continue at the  natural rate . There isn't too much  inflation or deflation . That's a  Goldilocks economy . https://www.thebalance.com/us-economic-outlook-3305669

Understanding the Sub Prime Mortgage Crisis

https://www.thebalance.com/subprime-mortgage-crisis-effect-and-timeline-3305745 The  subprime mortgage   crisis occurred when banks sold too many mortgages to feed the demand for  mortgage-backed securities  sold through the  secondary market . When home prices fell in 2006, it triggered  defaults . The risk spread into  mutual funds , pension funds, and corporations who owned these  derivatives . The ensuing  2007 banking crisis  and the  2008 financial crisis  produced the worst  recession  since the  Great Depression . June 2004-June 2006: Fed Raised Interest Rates By June 2004, housing prices were skyrocketing. The  Federal Reserve  Chairman Alan Greenspan started raising interest rates to cool off the overheated market. The Fed raised the  fed funds rate  six times, reaching 2.25 percent by December 2004. It raised it eight times in 2005, rising two full points to 4.25 percent by December 2005. In 2006, the new Fed Chair  Ben Be

Valuation of a Business

 https://www.valuadder.com/valuationguide/business-valuation-three-approaches.html  Assumptions drive your business valuation results To make things interesting, there are a number of ways to measure business value. Why such complexity? Because business value is seen differently by different people. For example, a business owner may believe that the business value is defined by its contribution to the local community it serves. On the other hand, a financially minded investor may gauge a business solely based on its ability to generate desired returns. Business value does not stand still. Market conditions change all the time and business people may see greater value in companies as their fortunes shift. It is common knowledge that competition for private businesses increases when jobs are scarce as more people enter the business buying market in search of income. This tends to drive up the business selling prices. Supply and demand, anyone? What is the ul