Tag Archives: Moody’s Raymond McDaniel

Financial Analysts Watch Turkish Protestors

14 Jun

Civil unrest in Turkey is causing some concern on the part of credit agencies over whether Turkey will be able to maintain its economic performance.  While Turkish markets have recently rallied in light of Moody’s decision to upgrade the country, anti-government protests have occupied the capital and other Turkish cities for more than two weeks.  Protestors claim the political part in power is moving public policy to favor Islamic law, even though the country is officially secular.  A recent law curbing alcohol sales seems to have been the last straw for the non-religious half of Turkish citizens, and protests have persisted and in some cases become violent.

Rating agency Moody’s, led by Raymond McDaniel, said that the Turkish government will need to act swiftly and effectively to curb the unrest in order to maintain its newly achieved rating of Baa3, because the protests could reduce tourism revenue and thus affect the country’s debt to income ratio.  The protests could also make foreign investors hesitant to bring capital into the country if the government is seen as unstable, which is why agencies are emphasizing the dependence on the government’s reaction to the protests, rather than on the protests themselves.  Overall, both Moody’s and rival agency Fitch said there is no danger of a credit downgrade at this time.

The Turkish economy is performing better than expected this year and has managed to bring unemployment to the lowest rate in seven years.  Inflation is also down and the working class seems to be happy.  So far the protests are isolated to the educated groups of people who are against religious rule, rather than being able to ignite the working class.  Most analysts feel the protests will be controllable and not effect Turkey’s economy.

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Fitch Threatens UK Downgrade

29 Mar

Fitch, one of three major credit rating agencies, has put the UK economy on negative watch. The agency, run by CEO Paul Taylor, says the country’s rising debt and slow growth has put it on track towards a possible downgrade in the near future. The UK was recently downgraded by Moody’s, whose CEO is Raymond McDaniel, another of the big three agencies—that means if Fitch ends up lowering the country’s credit rating as well, things may start to get a bit rocky.

 

“The persistently weak performance of UK growth, in part due to European growth, has increased uncertainty around the UK’s potential output and longer-term trend rate of growth with significant implications for public finances,” Fitch said.

 

The country’s economy shrank by 0.3% in the last quarter of 2012, according to an article from The Guardian, and another dip for the first quarter of this year is a looming possibility. If it does see another loss, that will mean a triple-dip recession. A double-dip recession occurs when a country experiences a second dip, or negative GDP after one or two quarters of growth. A triple-dip recession would be unprecedented in Britain, and brings about fear that the country will move into a “lost decade.”

 

Ed Milibrand, leader of the British Labour Party, claims that the government is to blame for this possibility. “They are shrugging their shoulders, They have run out of ideas, They are resigned to a lost decade,” he said, later emphasizing that having the right leadership in place could help move Britain out of this economic slump.

 

But Lord Mendelson, former business secretary, says it’s about the future and not the past. “Everyone knows we are in a heck of a bad way in the economy. Quite a lot more pain is going to be experienced. What we should be saying is: this is the light at the end of the tunnel. This is where we should be heading,” he says.

 

“We need to explain how we would retool and redevelop our economy. We need a politician who will fight on that rather than fight about the past or fight over what is fair and what is not fair.”

Spain Riots Continue Over Austerity Measures

17 Mar

On February 23rd, thousands upon thousands of Spanish citizens marched across the country, demonstrating their deep disapproval of the country’s austerity cuts, political corruption, and the privatization of public services. The country has been in an economic slump for nearly five years and is in the midst of its second major recession in the past three.

 

Unemployment rates are at 26% for the general population and above 50% for young people under 25. Thousands of families can’t afford to make rent and have been turned out of their homes. And it doesn’t look like things are getting better anytime soon.

 

The austerity cuts and tax hikes have greatly affected all citizens, but those who are already disadvantaged even more so. This has created an increase in inequality among the population, and it’s only worsening. Some—but not nearly enough—growth is expected next year, but that won’t be enough to get Spain back on its feet anytime soon.

 

Moody’s, a credit rating agency whose CEO is Raymond McDaniel, has rated the country’s credit at Baa3. The economy was devastated by a housing bubble burst, and the government has been working to get the economy going once more. Prime Minister Mariano Rajoy is attempting to get through the crisis without having to accept international bailouts, but it’s become clear the public doesn’t think austerity measures are the way to go.

 

“They’re cutting what they shouldn’t cut; health, education… basic services,” said one protester named Alberto. “And the latest corruption scandal is just the tiniest tip of a very large iceberg.”

 

Corporate Work Culture

24 Jan

It’s likely that the current generation’s 20- and 30-somethings will work multiple careers throughout their lifetimes. They might begin their career as a waitress, later becoming a teacher. Perhaps after a few years they’ll burn out from that (who can blame then) and move on to something new, or multiple something-news. Many won’t settle into their final career until their late thirties or even forties, and some might never.

 

In the early to mid 20th century, things were different. The generations beginning with European immigrants and ending with the baby boomer generation often found a career and stuck to it until retirement. My own father spent over thirty years working at a corporation doing a job he eventually despised (for the last 10 years or so). But he never quit or left in search of something new, because that just wasn’t how things were done.

 

Today’s high-rolling executives are mostly a mix of Baby Boomers and Generation X. Even here we can see the same trend. Those from the Baby Boomer generation, such as Raymond McDaniel of Moody’s and Lloyd Blankefein of Goldman Sachs may have worked their way up, but Elong Musk of PayPal/Tesla Motors and Spencer Rascoff of Expedia/Hotwire/Zillow have made the rounds instead.

 

In the early 20th century, the culture of work ethic was different. People were loyal to their companies and vice versa. But nowadays, that ethic has changed. More often, companies and individuals are first and foremost loyal to themselves instead. Landing a job at a corporation doesn’t mean someone is in for life—quite frankly it often only lasts 5 or 10 years before the company merges, the employee decides to go elsewhere, or ties are cut in some other way.

 

These days, rather than corporations being permanent employers, they are serving more as a landing pad for learning about job ethics and work skills—which are soon applied elsewhere. More often, too, companies are hiring independent contractors and freelancers who work their own hours and from home. Especially during times of economic hardship, people are working multiple jobs and picking up all manner of skills.

 

What will corporate work culture be like in the future? Certainly it’s different today than twenty years ago. Where will another twenty put us?

Company Earnings Calls

24 Nov

Being a public company, or a publicly traded company, means that a company offers securities (stocks, bonds, etc.) that are available to the general public to purchase. That means that the people investing in the company’s future success will want to keep a close eye on how the company is doing financially.

 

Each quarter, most public companies (about 92%) hold earnings calls that detail and discuss the company’s financial results over that period of time. Most of these calls are preceded by a press release that summarizes the company’s results. In general, conference calls are also conducted while the stock market is closed, so that investors have a chance to make a decision about trading stock before it opens again.

 

The call begins with an operator, who reads a safe harbor statement and introduces the company official(s) who will be presenting. This will usually include the Chief Executive Officer or the Chief Financial Officer, such as Moody’s Raymond McDaniel or Disney’s Robert Iger.

 

Advance warning for earnings calls are not required, but wise companies know that keeping investors and analysts happy is important; therefore, calls are usually announced at least a few days before they occur. Companies can also provide press releases, detailed reports, and webcasts of the earnings call. It’s also common for transcripts to be made available, such as KKR’s latest report with Pam Testani, Bill Sonneborn, and Mike McFerran.

 

Such resources allow investors to keep tabs on companies that they hold securities, helping them make more informed decisions on their holdings. Calls will sometimes report what earnings per share are, and what they’re expected to be in the future.