INDUSTRY INSIGHTS YOUR PEERS ARE READING
nation's credit rating has the same tone. Ratings are great when there is misinformation or uncertain information, but that is not the case here. An "AA+" rating is defined by S&P as follows: "An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. And all ratings agencies tell their constituents that their ratings are a guide, a compass, not a hard and fast rule. MORE
The company is a member of the Hitachi Group, listed on the first section of the Tokyo Stock Exchange, and enjoys an A+ credit rating and stable outlook from Ratings & Investment Information Inc. MORE
This pattern of abstracting further and further away from "real" things and "real" value has continued to the present day, giving us credit cards and collateralized debt obligations (not to mention casino chips). From Bernie Madoff to derivatives to the housing bubble to dubious AAA credit ratings, we continue to find new ways to encourage people to make financial leaps of faith. What happens when there is a mass loss of confidence in the financial system? MORE
Workplace inspections not only improve safety, they cause no discernible damage to employers' ability to stay in business and no reductions in sales or credit ratings, according to our research. The federal Occupational Safety and Health Administration (OSHA) is back in the news after the Government Accountability Office criticized the agency for taking too long to adopt new safety regulations. The GAO report says the delays compromise worker safety. MORE
Although credit-card holders with low credit ratings default more often than the rest of the population, the interest and fees they pay make them far more profitable for banks than any other groups of credit-card customers, according to research reported in The New York Times. Even during the financial crisis, when banks were hemorrhaging money on subprime mortgages, subprime credit cards were a major source of profits. MORE
This dysfunctional spinning led to countless disasters for buyers - who lost their homes and ruined their credit ratings. Q: In our company we value integrity, yet leaders - especially in marketing - are taught to "spin" to make products and services sound good to clients. When is "spinning" a message a good thing? When it is wrong? A: Every company that sells products or services "spins" these in a positive way to clients. This is not immoral, illegal, or unethical. MORE
The idea is that direct driving behavior over time will be more predictive than traditional proxies such as age, credit rating, or geography. For insurers, transforming these data into their most usable form may require the creation of new composite variables or scores from the existing data — something like a driving risk score that gives weight to telematics data, geography, and credit score. MORE
The dismal truth is that pretty much all of yesterday's institutions — from banks, to "the corporation," to credit ratings, to schools — are just as broken as our political institutions are. I'm a citizen of a generation whose future is going up in smoke faster than you can say "credit default swaps." So, what are you asking President Obama? Why not more stimulus? Why did he choose to bail out the banks? MORE
Get Yourself A Great Rating. When you’re trying to be careful with your funds, and save wherever you can; you might think that getting yourself a credit card might be a bad idea. However, it’s worth getting one so that you’ll have a credit rating or score for you and your business. MORE
We’re all used to economic forecasts. We’re also used to them being wrong. But there was a time when forecasts were new and exciting, and people were genuinely surprised when they didn’t pan out. This was during the first decades of the previous century, an era that Harvard Business School historian Walter Friedman chronicles in his new book Fortune Tellers: The Story of America’s First Economic Forecasters. MORE
But the omnipresent rating game has one big catch: ranking up is incredibly hard, while ranking down is rapid and easy, like a free-fall. The reputation economy is based on the simplistic, but effective star ratings system. Anyone who’s ever rated their Uber driver or Airbnb host has actively participated. In 2012, Facebook applied for a patent that would use an algorithm to assess the credit ratings of friends, as a factor in one’s eligibility to get a mortgage. MORE
Turkey’s general credit rating is still higher than that of Brazil, Croatia, Portugal, Cyprus, and Serbia. The domestic saving rate , stagnant productivity , unemployment , and rapidly increasing labor costs all adversely affect growth. MORE
Money became a key element of these trust networks because it was cheaper to trust the money than the credit of a counterparty beyond your clan, village, or tribe. These hacks are things like badges, diplomas, dress codes, and, as it happens, credit ratings. The son of a Texan friend of mine decided earlier this year not to go to college, as someone like him would surely have done a few years ago. MORE
This in turn boosted development by allowing relatively poor farmers to reliably send and receive payments at affordable rates, fostering economic growth by lowering transaction costs. Educational records, business histories, health care information, and credit ratings could all be made usable the world over, helping those who want to trade or travel to prove their credentials. MORE
The tool’s analysis of inside sales calls at one company found that although reps had long been coached on a broad set of practices, four specific behaviors correlated most closely with sales close rates. MORE
Plus, if you do need to borrow more at a later stage, your business’s credit won’t be affected. It can work out very well, and with enough research, you will be able to find a variety of different loans with varying interest rates and special deals. You may not be eligible for all of them, however, and applying for too many loans all at once can damage your credit rating. A Credit Card. MORE
However, if your company can build business credit, you will find yourself gaining more opportunities to access cash. Whatever you do, don’t operate your business on your personal credit. Not only does it make your personal finances vulnerable, but business credit is a much more powerful tool professionally than personal credit. Make the financially fit decision Use these 5 quick tips to start building business credit today. MORE
It appears that Enron''s final fatal mistake was to try to support its stock price instead of living up to key contractual obligations required to maintain its credit rating. What caused Enron''s bankruptcy was, quite simply, the loss of its investment-grade credit rating. So, what caused Enron to lose its investment grade rating? Were the rating agencies aware of Enron''s oft-maligned financing structures? MORE
Blockchain technology can also take networked business models to a new level by supporting a whole host of breakthrough applications: native payment systems that run without banks, credit card companies, and other intermediaries will cut cost and time from transactions. MORE
Multi-billion dollar businesses such as Yelp, Zagat, TripAdvisor, Uber, eBay, Netflix, and Amazon crunch quantities of data including ratings of service providers and sellers in order to reduce customers’ risk. Big data holds out big promises for marketing. MORE
In financial terms, and especially with regards to credit, governments are no different. As the CEO of a credit business, I’m in a unique position to take a look at how the US actually stacks up. Several agencies rank government creditworthiness, and according to all of them, the US is pretty darn good: Moody’s rates us at the top of the scale with an AAA rating. If the government were a business, how would its credit rating look? MORE
As one might expect, officials are using the error and S&P's earlier failure to properly rate bundled mortgage products to argue that the downgrade is incorrect. From falsified mortgage applications and bundles of toxic mortgages, to incorrect credit ratings and balance sheets that couldn't be trusted, the financial crisis is as much about bad data as it is about unfettered greed. At this point, most everyone has heard that S&P downgraded U.S. government debt on Friday. MORE
There’s a longstanding debate about whether private equity investors create value for the firms they buy. MORE
But with robust growth rates and economies unburdened by legacy structures of the last century, Africans can innovate beyond what others are doing. Six years after the global recession began, many parts of the world are still struggling to achieve growth. MORE
To begin with, quite a few parts of it are heavily concentrated at a global level (the credit ratings business, for example, or global investment banking), and many more at the national level (just six financial institutions account for 46% of all U.S. Why did Jean Tirole win the Nobel Prize in Economics? MORE
The interest rate on 10-year Treasuries is a mere 1.58%, the lowest in more than 50 years. The rate on the inflation-linked 10-year is negative 0.8% credit rating but no observable increase in interest rates. Why is there a fiscal cliff? Because Washington built it. MORE
But the push to transform their businesses occurred at exactly the same time the government was cutting reimbursement rates, putting significant pressure on hospital financials. That means more aggressively reducing fee-for-service reimbursement rates relative to value-based payments. We need the equivalent of Consumer Reports for health care or Morningstar ratings for clinical services. Tom Price, President-elect’s Trump pick to be the next U.S. MORE
But remove the currency markets and you take away the constant credit rating service the currency markets provided. To replace all that the banks ought to have undertaken keener credit analyses, probably resulting in higher margins on loans to the peripheral countries. It was the same problem with credit analysis. It probably will be (and I expect should be), perhaps through the use of the credit default swaps market. MORE
And as for the news that my credit rating has changed and I should check it out, I'm not interested in learning more about that. I have so many people interested in talking with me via email. You, too? . Not sure which is most annoying. MORE
To begin with, quite a few parts of it are heavily concentrated at a global level (the credit ratings business, for example, or global investment banking), and many more at the national level (just six financial institutions account for 46% of all U.S. Why did Jean Tirole win the Nobel Prize in Economics? MORE
The second objective of all three parties was the avoidance of a credit rating downgrade. At the time (prior to the actual downgrade), the threat of a credit downgrade forced all three parties to the negotiating table. MORE
Recent headlines have focused on the debt ceiling , the recent credit rating downgrade , unemployment , and the other thorny fiscal challenges facing the United States. But consider this: increasing the country's average growth rate by one percentage point over the next 20 years would not only result in much higher incomes and more jobs for all Americans but would also obviate the need for drastic spending cuts today to reign in the government deficit. MORE
According to Jim Gallogly, no matter how low the OSHA recordable injury rate, if there is a serious incident — a fire, a chemical release, a worker is seriously hurt — no manager gets a bonus. ” Rethink how you think about injury rates. Injury rates, often called “OSHA recordables” are important metrics, in that they reflect the very real experience of your workforce. That said, you should set concrete goals for injury rates at your company. MORE
They gave AAA ratings to financial instruments that were essentially fraudulent to begin with and effectively worthless at the end. The fault here, though, lies as much in ourselves as in our ratings agencies. And S&P's ratings downgrade of the U.S., I should disclose here that John Chambers, the chairman of S&P's sovereign ratings committee, is a social acquaintance. Lots of overseas regulators and private investors have come to rely on the ratings as well. MORE
It also accounts in part for the failure of security rating agencies to accurately gauge the riskiness of the instruments they rate. And, when we allow financial firms to choose for themselves the agencies that rates their financial products, the agencies have every incentive to be lax. The data seem clear on David Sokol's conflict of interest in the Berkshire/Lubrizol deal. He bought shares in Lubrizol, and then encouraged Berkshire to buy the company. MORE
Credit Rating Related Topics Strategy Driven
FEBRUARY 20, 2018
Get Yourself A Great Rating. When you’re trying to be careful with your funds, and save wherever you can; you might think that getting yourself a credit card might be a bad idea. However, it’s worth getting one so that you’ll have a credit rating or score for you and your business.
Strategy Driven
NOVEMBER 5, 2018
Plus, if you do need to borrow more at a later stage, your business’s credit won’t be affected. It can work out very well, and with enough research, you will be able to find a variety of different loans with varying interest rates and special deals. You may not be eligible for all of them, however, and applying for too many loans all at once can damage your credit rating. A Credit Card.
Women on Business
JULY 9, 2012
However, if your company can build business credit, you will find yourself gaining more opportunities to access cash. Whatever you do, don’t operate your business on your personal credit. Not only does it make your personal finances vulnerable, but business credit is a much more powerful tool professionally than personal credit. Make the financially fit decision Use these 5 quick tips to start building business credit today.
Marshall Goldsmith
SEPTEMBER 26, 2011
This dysfunctional spinning led to countless disasters for buyers - who lost their homes and ruined their credit ratings. Q: In our company we value integrity, yet leaders - especially in marketing - are taught to "spin" to make products and services sound good to clients. When is "spinning" a message a good thing? When it is wrong? A: Every company that sells products or services "spins" these in a positive way to clients. This is not immoral, illegal, or unethical.
Bird's Eye View
JANUARY 31, 2011
And as for the news that my credit rating has changed and I should check it out, I'm not interested in learning more about that. I have so many people interested in talking with me via email. You, too? . Not sure which is most annoying.
Strategy Driven
SEPTEMBER 1, 2011
The second objective of all three parties was the avoidance of a credit rating downgrade. At the time (prior to the actual downgrade), the threat of a credit downgrade forced all three parties to the negotiating table.
Harvard Business Review
NOVEMBER 15, 2013
Although credit-card holders with low credit ratings default more often than the rest of the population, the interest and fees they pay make them far more profitable for banks than any other groups of credit-card customers, according to research reported in The New York Times. Even during the financial crisis, when banks were hemorrhaging money on subprime mortgages, subprime credit cards were a major source of profits.
Harvard Business Review
AUGUST 9, 2011
nation's credit rating has the same tone. Ratings are great when there is misinformation or uncertain information, but that is not the case here. An "AA+" rating is defined by S&P as follows: "An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. And all ratings agencies tell their constituents that their ratings are a guide, a compass, not a hard and fast rule.
Harvard Business Review
JULY 11, 2013
It appears that Enron''s final fatal mistake was to try to support its stock price instead of living up to key contractual obligations required to maintain its credit rating. What caused Enron''s bankruptcy was, quite simply, the loss of its investment-grade credit rating. So, what caused Enron to lose its investment grade rating? Were the rating agencies aware of Enron''s oft-maligned financing structures?
Harvard Business Review
AUGUST 11, 2011
They gave AAA ratings to financial instruments that were essentially fraudulent to begin with and effectively worthless at the end. The fault here, though, lies as much in ourselves as in our ratings agencies. And S&P's ratings downgrade of the U.S., I should disclose here that John Chambers, the chairman of S&P's sovereign ratings committee, is a social acquaintance. Lots of overseas regulators and private investors have come to rely on the ratings as well.
Harvard Business Review
APRIL 16, 2018
The company is a member of the Hitachi Group, listed on the first section of the Tokyo Stock Exchange, and enjoys an A+ credit rating and stable outlook from Ratings & Investment Information Inc.
Harvard Business Review
MAY 10, 2016
Blockchain technology can also take networked business models to a new level by supporting a whole host of breakthrough applications: native payment systems that run without banks, credit card companies, and other intermediaries will cut cost and time from transactions.
Harvard Business Review
JULY 8, 2016
The tool’s analysis of inside sales calls at one company found that although reps had long been coached on a broad set of practices, four specific behaviors correlated most closely with sales close rates.
Harvard Business Review
JULY 9, 2015
But with robust growth rates and economies unburdened by legacy structures of the last century, Africans can innovate beyond what others are doing. Six years after the global recession began, many parts of the world are still struggling to achieve growth.
Harvard Business Review
MAY 30, 2012
Workplace inspections not only improve safety, they cause no discernible damage to employers' ability to stay in business and no reductions in sales or credit ratings, according to our research. The federal Occupational Safety and Health Administration (OSHA) is back in the news after the Government Accountability Office criticized the agency for taking too long to adopt new safety regulations. The GAO report says the delays compromise worker safety.
Harvard Business Review
NOVEMBER 12, 2013
In financial terms, and especially with regards to credit, governments are no different. As the CEO of a credit business, I’m in a unique position to take a look at how the US actually stacks up. Several agencies rank government creditworthiness, and according to all of them, the US is pretty darn good: Moody’s rates us at the top of the scale with an AAA rating. If the government were a business, how would its credit rating look?
Harvard Business Review
JULY 8, 2016
Turkey’s general credit rating is still higher than that of Brazil, Croatia, Portugal, Cyprus, and Serbia. The domestic saving rate , stagnant productivity , unemployment , and rapidly increasing labor costs all adversely affect growth.
Harvard Business Review
MAY 31, 2011
It also accounts in part for the failure of security rating agencies to accurately gauge the riskiness of the instruments they rate. And, when we allow financial firms to choose for themselves the agencies that rates their financial products, the agencies have every incentive to be lax. The data seem clear on David Sokol's conflict of interest in the Berkshire/Lubrizol deal. He bought shares in Lubrizol, and then encouraged Berkshire to buy the company.
Harvard Business Review
JANUARY 29, 2018
But the omnipresent rating game has one big catch: ranking up is incredibly hard, while ranking down is rapid and easy, like a free-fall. The reputation economy is based on the simplistic, but effective star ratings system. Anyone who’s ever rated their Uber driver or Airbnb host has actively participated. In 2012, Facebook applied for a patent that would use an algorithm to assess the credit ratings of friends, as a factor in one’s eligibility to get a mortgage.
Harvard Business Review
MARCH 21, 2018
According to Jim Gallogly, no matter how low the OSHA recordable injury rate, if there is a serious incident — a fire, a chemical release, a worker is seriously hurt — no manager gets a bonus. ” Rethink how you think about injury rates. Injury rates, often called “OSHA recordables” are important metrics, in that they reflect the very real experience of your workforce. That said, you should set concrete goals for injury rates at your company.
Harvard Business Review
JUNE 29, 2015
There’s a longstanding debate about whether private equity investors create value for the firms they buy.
Harvard Business Review
SEPTEMBER 21, 2012
The idea is that direct driving behavior over time will be more predictive than traditional proxies such as age, credit rating, or geography. For insurers, transforming these data into their most usable form may require the creation of new composite variables or scores from the existing data — something like a driving risk score that gives weight to telematics data, geography, and credit score.
Harvard Business Review
JANUARY 17, 2012
This pattern of abstracting further and further away from "real" things and "real" value has continued to the present day, giving us credit cards and collateralized debt obligations (not to mention casino chips). From Bernie Madoff to derivatives to the housing bubble to dubious AAA credit ratings, we continue to find new ways to encourage people to make financial leaps of faith. What happens when there is a mass loss of confidence in the financial system?
Harvard Business Review
AUGUST 10, 2011
As one might expect, officials are using the error and S&P's earlier failure to properly rate bundled mortgage products to argue that the downgrade is incorrect. From falsified mortgage applications and bundles of toxic mortgages, to incorrect credit ratings and balance sheets that couldn't be trusted, the financial crisis is as much about bad data as it is about unfettered greed. At this point, most everyone has heard that S&P downgraded U.S. government debt on Friday.
Harvard Business Review
DECEMBER 6, 2016
But the push to transform their businesses occurred at exactly the same time the government was cutting reimbursement rates, putting significant pressure on hospital financials. That means more aggressively reducing fee-for-service reimbursement rates relative to value-based payments. We need the equivalent of Consumer Reports for health care or Morningstar ratings for clinical services. Tom Price, President-elect’s Trump pick to be the next U.S.
Harvard Business Review
APRIL 1, 2014
Money became a key element of these trust networks because it was cheaper to trust the money than the credit of a counterparty beyond your clan, village, or tribe. These hacks are things like badges, diplomas, dress codes, and, as it happens, credit ratings. The son of a Texan friend of mine decided earlier this year not to go to college, as someone like him would surely have done a few years ago.
Harvard Business Review
JUNE 1, 2011
But remove the currency markets and you take away the constant credit rating service the currency markets provided. To replace all that the banks ought to have undertaken keener credit analyses, probably resulting in higher margins on loans to the peripheral countries. It was the same problem with credit analysis. It probably will be (and I expect should be), perhaps through the use of the credit default swaps market.
Harvard Business Review
AUGUST 8, 2011
Recent headlines have focused on the debt ceiling , the recent credit rating downgrade , unemployment , and the other thorny fiscal challenges facing the United States. But consider this: increasing the country's average growth rate by one percentage point over the next 20 years would not only result in much higher incomes and more jobs for all Americans but would also obviate the need for drastic spending cuts today to reign in the government deficit.
Harvard Business Review
JULY 6, 2011
The dismal truth is that pretty much all of yesterday's institutions — from banks, to "the corporation," to credit ratings, to schools — are just as broken as our political institutions are. I'm a citizen of a generation whose future is going up in smoke faster than you can say "credit default swaps." So, what are you asking President Obama? Why not more stimulus? Why did he choose to bail out the banks?
Harvard Business Review
NOVEMBER 6, 2014
To begin with, quite a few parts of it are heavily concentrated at a global level (the credit ratings business, for example, or global investment banking), and many more at the national level (just six financial institutions account for 46% of all U.S. Why did Jean Tirole win the Nobel Prize in Economics?
Harvard Business Review
NOVEMBER 6, 2014
To begin with, quite a few parts of it are heavily concentrated at a global level (the credit ratings business, for example, or global investment banking), and many more at the national level (just six financial institutions account for 46% of all U.S. Why did Jean Tirole win the Nobel Prize in Economics?
Harvard Business Review
MAY 17, 2017
This in turn boosted development by allowing relatively poor farmers to reliably send and receive payments at affordable rates, fostering economic growth by lowering transaction costs. Educational records, business histories, health care information, and credit ratings could all be made usable the world over, helping those who want to trade or travel to prove their credentials.
Harvard Business Review
NOVEMBER 21, 2012
The interest rate on 10-year Treasuries is a mere 1.58%, the lowest in more than 50 years. The rate on the inflation-linked 10-year is negative 0.8% credit rating but no observable increase in interest rates. Why is there a fiscal cliff? Because Washington built it.
Harvard Business Review
FEBRUARY 21, 2014
We’re all used to economic forecasts. We’re also used to them being wrong. But there was a time when forecasts were new and exciting, and people were genuinely surprised when they didn’t pan out. This was during the first decades of the previous century, an era that Harvard Business School historian Walter Friedman chronicles in his new book Fortune Tellers: The Story of America’s First Economic Forecasters.
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