Clik here to view.
Apple’s cash hoard: how much is too much?
There was plenty of press last week when Apple announced it’s 3rd quarter earnings. Much of the attention was on the size of the cash pool Apple has accumulated. Here’s the balance sheet: Cash and...
View ArticleClik here to view.
Cash & Carry, #1: Where to Park?
Holding cash is a key risk management tool, and corporations are holding more cash than ever. Where should the corporate treasury park that cash? In which currency should these balances be held–US...
View ArticleClik here to view.
Cash & Carry, #2: Pesos and Steamrollers
In a previous post, we reported on the evidence that the carry trade strategy – investing in currencies with high interest rates and borrowing in currencies with low interest rates – earns high returns...
View ArticleClik here to view.
Cash & Carry, #3: the Price of “Peso” Risk
In our previous post in this series, we highlighted a line of research by Burnside et al. that explains the profitability of the carry trade as a “peso” problem. That is, the historical data doesn’t...
View ArticleClik here to view.
Cash & Carry, #4: Other resolutions to the puzzle
We began this series of posts recapping the finding that a currency carry trade investment has historically produced high return relative to the low risk. This finding is not consistent with models in...
View ArticleClik here to view.
Risk and return in the eye of the beholder
The corporate finance practice team at McKinsey & Co has joined the long line of people looking at the large cash hoard being assembled by corporations and asking “why?”. In an article in the...
View ArticleClik here to view.
The growing return on cash in the bank
Phil Izzo at the Wall Street Journal‘s Real Time Economics blog is focused on how the danger of contagion from the European debt crisis is raising the return on those cash hoards US companies have been...
View ArticleClik here to view.
Phantom Costs to the Swap Dealer Designation and OTC Reform
The CFTC is working to finalize the rule defining swap dealers and major swap participants. Under the Dodd-Frank financial reform, the rules governing operation of the OTC derivative market operate in...
View ArticleClik here to view.
Hedging by Racing Cash Out
Speaking at GlaxoSmithKline’s annual results presentation last week, CEO Andrew Witty disclosed some of the strategies the company is employing to manage the risk posed by the Eurozone debt crisis: We...
View ArticleClik here to view.
NERA Doubles Down
In a previous blog post, I criticized a study by the economics consulting firm NERA purporting to measure the costs companies would face as the Dodd-Frank reform of the OTC derivative markets is...
View Article