GFC - what can we learn / teach?

How do we learn from the GFC (TM)? Here's what a few business school deans think.

Analyst influences market...

Looks like it might still matter what analysts think. From The Australian

Asciano requested a trading halt yesterday after its shares plunged as much as $1.085 to a record low of 63.5c in the first 20 minutes of trading.

The sell-off was sparked by a massive downgrade from Citigroup analyst Sanjay Magotra, who slashed his target price on the stock from $6.08 to just 82c and reversed his trading recommendation from "buy" to "sell".

Not sure if this is a man bites dog or a dog bites man story...

Bank provisioning

One way that banks respond to changes in economic circumstances is via the level of provisioning. It's been interesting to see how the Australian banks have adjusted their level of provisioning in response to the Global Financial Crisis (TM). Here's an article by Richard Gluyas in The Oz focusing on the Commonwealth Bank.

Key graf:

But not only that, Mr Williams said CBA's provisioning coverage was "lacking" compared to its peers. Total provisions as a proportion of risk-weighted assets was only 0.77 per cent, compared to 1.27 per cent for ANZ, 1.11 per cent for Westpac and 0.86 per cent for NAB. "Should, as we anticipate, the environment continues to deteriorate, this will likely result in higher provisioning charges in the near term," Mr Williams said. The bar had been lifted on capital adequacy, Citi said, and CBA was at risk of "not measuring up".

Remuneration consultants

Michael West in the SMH gets stuck into them. And rightly so! More on this later.