Monday, April 30, 2012

Learn Discounted Cash Flow Analysis, More Layoffs Coming At Banks

Learn discounted cash flow analysis courtesy of the Khan Academy. Didn't all of this analysis fail in the real world in 2006-7? At the end Sal Khan explains how these models fail. The financial industry keeps cutting thousands of jobs even after the mass layoffs during the financial crisis (Large layoffs loom on Wall Street - Fortune, 4/30/2012). "Banks haven't come up with a model that makes up the profits they used to get from propriety trading, CDOs and other structure deals they used to do," says Goldstein." And I'm reading at Business Insider that Bank of America/Merrill Lynch is planning to cut 2,000 jobs "in its investment banking, commercial banking and non-U.S. wealth-management units", which is "on top of the 30,000 planned layoffs the bank had already announced last fall." Maybe it's impossible to model asymmetric information.


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