Posted by: Tom Keene on February 8, 2012
WJB Capital, which was based in New York and employed about 100 people, halted its brokerage operations following a year of slower trading, a shortage of capital and interest rates of 25 percent on some debts. MF Global, the New York-based firm previously run by former New Jersey governor and ex-Goldman Sachs Group Inc. co-chairman Jon Corzine, shuttered after revealing a $6.3 billion bet on the bonds of some of Europe’s most-indebted nations.
—Joshua Fineman & Laura Marcinek, Bloomberg, Ticonderoga Securities Said to Close After Effort to Bolster Capital Fails, 24 January 2012.
Volume. Or, a lack thereof.
The vogue is cash flow, the belt-and-suspenders tradition is to look at the bottom of the income statement. Hipsters may migrate up to operating income. Those scandalous can add a bit of balance sheet, knead for five minutes. Voila! EBITDA.
The “need” in this early-2012 is far, far away as described by first-look Q4 2011 nominal GDP of 3.2 percent and further described by “a year of slower trading.”
Travel to the tippy-top of the income statement and consider the P and the Q of revenue. Price (further south) may be a topic for later this year.
Quantity is the issue right now (in spades on Global Wall Street and in selected other industries.)
Mind your Ps; and now…really, really mind your Qs. Discuss.