When not to take payday loan
Knowing when to get a payday loan Getting a payday loan is easy but most must understand that it should be considered as a last resort financial option. Why? Simply because these short term loans are expensive and payday loans debt can add up quickly. A friend of mine took a loan from an online [...]
The advantages of loan secrecy are minimal
Had the company been open about its plans, it would have recognized the issues up front and worked with these groups to minimize the product’s negative impact. But working with old mental maps, the organization wasn’t willing to disclose what it needed to—and was unwilling to risk trusting the advocacy groups to become partners in [...]
Before you take a loan take some precausions
The possibilities of partnership synergy make it worth our while to withhold our prejudices. If we can check ourselves, we have more options. We can avoid the trap and anticipate some magic ahead. Most of all, we can look at the glass as being half full, not half empty. We can assume, that is, that [...]
Create a successful loan situation
After the contractors and managers agreed on how they would work together in partnership to complete the job without spoiling the customers’ experience, the managers used the same partnershipbuilding process—the Partnership Continuum—with the store employees. Employees were under particular stress because they were often required to move stock from one side of the store to [...]
Apply your background knowledge to credit issues
While our mental maps are useful in helping us apply what we already know, they are not so helpful when it comes to learning something new.We may think we know something based on an experience and transfer that knowledge to a new experience—only to discover that our mental map is outdated and no longer useful. [...]
Spread that solely mirrors credit risk
Based on historical data on defaults we can derive the fraction of the spread over riskless bonds for different rating classes and maturities, that is solely due to the probability of default and loss given default. The expected loss rate is derived from these two factors. Market participants who have a buy-and-hold perspective must decide [...]
The actual credit spread is explained by credit risk
One typical reason for spread differentials between bonds of the same rating are liquidity considerations, particularly with respect to stress situations. enerally, bonds with a large issue size, issued recently and actively traded by several market makers tend to be the most liquid. Sometimes old bonds with a small issue size, too, trade at rather [...]
How to view the credit risk
One example from the automotive sector is the large spread differential between Ford and Renault bonds with similar coupon and maturity. Although the rating agencies assign approximately the same credit risk to both issuers, investors view the risk that is related to owning Ford bonds as significantly higher. It clearly outlines that Ford bonds have [...]
Average spread increasing as credit quality decreases
Despite the wide dispersion of credit spreads within the rating buckets the general link between credit spreads and ratings is clear, with average spread increasing as credit quality decreases. However, as it illustrates there are large overlaps between individual rating distributions. Myriad examples can be found to show that market participants often perceive the risk [...]
Some more key credit questions
Do people in your organisation view sales from the customers’ perspective? How well do people in your organisation know each individual customer? Could more data be gathered and assessed? Do people in your organisation share information and insights about customers? Are product benefits (not simply product features) highlighted? Could you sell more to existing customers? [...]