2 August 2018
Question: According to MSN:Money, what are 15 things men get wrong about women and money?
Fed stays on course for September rate rise after bullish review of US economy – Pg. 1
– The Federal Reserve stayed on course for a further increase in short-term interest rates as soon as next month as it highlighted the strength of the US economic expansion alongside inflation that is hovering close to target
– The central bank held the target range for the federal funds rate at 1.75% to 2.00%, as widely expected….
– It gave a bullish assessment of the economy following its latest two-day meeting, describing a range of economic indicators as “strong”
– …the ECB is penciling in an end to its quantitative easing programme at the end of the year, while the BoE is poised for another rate increase
– The BoJ stood as the exception this week, pledging to maintain extremely low rates, although it also jolted bond traders by introducing extra flexibility into its stimulus programme
– Having raised rates twice, the Fed’s median forecast is for a total of four rises this year, with three in 2019. That could push rates towards “neutral” levels – at which growth is at its trend rate and inflation stable – as soon as next year
China eases war on debt in hunt for short-term growth – Pg. 4
– China’s leadership has signaled a shift towards supporting short-term economic growth after battling excessive debt for nearly two years, just as a trade war with the US also threatens the economy
– China’s economy expanded at its weakest pace since 2016 in the second quarter, and most economists expect further deceleration.
– Overall lending growth from banks and off-balance-sheet sources hit record lows for four consecutive months to June, …
Auditing in crisis – Pg. 7
– The word audit means to survey or check. Ferreting after facts was once the auditors’ main vocation: certifying information to assure investors that a company’s numbers were “true and fair”
– In the UK in the past three decades, standards setters have progressively dismantled the system of historical cost accounting, replacing it with one based on the idea that the primary purpose of accounts is to present information that is “useful to users”. The process allows managers to pull forward anticipated profits and unrealized gains, and write them up as today’s surpluses
– Modern auditing in Brain sprang from a great failure; the collapse in 1878 of the City of Glasgow Bank
– Their purpose was to assure investors that companies’ capital was not being abused by over-optimistic or fraudulent managers.
– The idea that accounts should be primarily “useful” springs from the same source as the so-called efficient markets hypothesis. Indeed, it is an adjunct to that now somewhat discredited theory
– Fair value accounting has been firmly shunned by the US SEC for contributing to the losses of the 1929 crash
– Soaring inflation in the 1970s made historical cost balance sheets seem misleadingly out of whack with property values, leading to asset stripping. American’s savings and loan crisis in the 1980s was partly blamed on these institutions having out-of-date boosk
– From the 1990s, fair values started to supplant historical cost numbers in the balance sheet, first in the US and then, with the advent of IFRS accounting standards in 2005, across the EU. Banking assets held for trading started to be reassessed regularly at market valuations. Contracts were increasingly valued as discounted streams of income, stretching seamlessly into the future
– Between 1992 and 2014, equity-based pay at S&P 500 firms rose from 25% to 60% of their total remuneration, …
– “The problem with fair value accounting is that it’s very hard to differentiate between mark-to-market, mark-to-model and mark-to-myth”
– Until the turn of the century there was a general convention that when one company bought another, goodwill was an effective cost of the transaction that needed to be amortized – or written down annually against group profits
– …standards setters softened the rules on goodwill in 2000
– Since 2007, the total goodwill on the balance sheets of S&P 500 companies had rocketed from $1.8tn to $2.9tn by 2016,…
– From a Big Eight in 1987, the industry consolidated to a BigFive in 1998
– …collapse of Arthur Anderson in 2002….”it makes the Big Four too big to fail”
– There is also the perception that the dominant Big Four, which are now profit-hungry professional services conglomerates, are not that worried about audit quality anyway
Answer: (1) Myth: woman have worse credit scores; (2) Myth: Women are not good investors; (3) Myth: Women are more likely to make impulse purchases; (4) Myth: Women are more interested in getting married; (5) Myth: Women don’t make successful entrepreneurs; (6) Myth: there is no glass ceiling; (7) Myth: Women do all the grocery shopping; (8) Myth: Women have lower salaries because they don’t negotiate; (9) Myth: Women don’t know how to save money; (10) Myth: Women aren’t interested in learning about investing; (11) Myth: woman are born to shop; (12) Myth: women aren’t nature leaders; (13) Myth: Woemn are naturally bad at math (Prof Note: My 24 years of lecturing has proven to me that women are actually superior in math. Women are more likely to state the problem and prove the solution. Men are more like to write a single number and be at the bar in time for happy hour); (14) Myth: women can’t manage money; (15) Myth: The general pay gap doesn’t really exist (Prof Note: Overall comment, in my 24 years of University lecture I have noticed no intellectual gap between any group of individuals. What I have noticed is a difference in maturity, i.e. woman are more mature, especially at younger ages than men. Also, woman with professional and familial responsibilities that have NO time, tend to be the best students, in general, in graduate school….because their children/family need them!)