Non-physical assets valuation

Credit or Cash (Flow)? Which Game Is Being Played?  December 25, 2011 – 09:08 am
Pictures

This week, I read this passage in the Economist:

This in turn sparked huge and occasionally destabilising flows of cross-border capital and a massive burst of credit creation. Total credit in the American economy passed $1 trillion in 1964; by 2007, it had exceeded $50 trillion.

This debt explosion showed up not in consumer prices but in asset prices, notably in property. The cycle was self-reinforcing: banks lent money to people to buy property, causing prices to rise, making banks more willing to lend, and so on.

It got me to thinking.  To understand the modern economy, you have to account for the general uptrend in availability and cost of credit as described above.  The fact that the supply of money has an effect on valuation of assets is simultaneously obvious and also deeply strange and unsettling in highlighting that the notion of valuation is inherently unstable.

To see why, let’s step back and think of valuation.  In simplest form, valuation is simply where supply meets demand, but the precursor question to that is how are the supply and demand functions set.  Among the approaches to valuation, let ‘s talk about two.

The first is a function of the discounted cash flows of the specific asset to be valued; the second is driven by the ease and availability of credit in the economic generally.  Where it gets interesting is when these two co-exist for the same asset and/or where there are both financial buyers (who are relatively indifferent to the asset other than as a store of value) and physical buyers (who will use the asset).

Source: takingpitches

You might also like:

8/13/10: White House Press Briefing
8/13/10: White House Press Briefing
Davos Annual Meeting 2010 - Rebuilding Critical Infrastructure
Davos Annual Meeting 2010 - Rebuilding Critical Infrastructure
Greening Government Part 2
Greening Government Part 2

Critiquing Marxism

Marxism’s Anniversary
Long Live (a piece of) Marxism!
by Michael Albert
Article from New Politics Symposium: The Relevance of Marxism on the
150th Anniversary of The Communist Manifesto, Winter, 1998
Perhaps the most remarkable thing about the 150th anniversary of The Communist Manifesto is that, well, who cares? The answer is: nearly no one. More, nearly no one w...g of Das Kapital, or any other event you care to name in this pantheon, getting on with doing it better is that thing.
The author, Michael Albert, works on Z Magazine, the Z Media Institute, and Z’s online operation named ZNET. He hosts a forum on ZNet, as do Noam Chomsky, Katha Pollitt, Barbara Ehrenreich, and Howard Zinn, for those interested in discussing this article or other matters.

Anti Globalization Folk

What Are We For?
By Michael Albert
Anti-globalization activists understand that sympathetic and mutually beneficial global ties are good. But we want social and global ties to advance universal equity, solidarity, diversity, and self-management, not to subjugate ever-wider populations to an elite minority. We want to globalize equity not poverty, solidarity not anti-sociality, divers...s and their dynamics. We need domestic and international economic vision that everyone can understand and refine and make their own. We need it to generate hope, to provide inspiration, to reveal what is possible and valuable, and to orient and also democratize our strategies so that they might take us where we desire rather than in circles or even toward something worse than what we now endure.

In Defense...continued

But a participatory economy enjoys advantages in managing this trade off compared to capitalism. Most importantly, direct recognition of 'social serviceability' is a more powerful incentive to innovation in a participatory economy, which reduces the magnitude of the trade off since more innovation will occur in a participatory economy than in capitalism for the same speed of adjustments. Secondl... Economy. Forthcoming.
Levy, David. 1991. Book Review: Seeking a Third Way. Dollars and Sense 171 November 1991: 18-20.
Pramas, Jason. 1991. A Roundtable on Participatory Economics. Z Magazine July/August 1991: 73-74.
Weisskopf, Thomas. 1992. Toward a Socialism for the Future in the Wake of the Demise of the Socialism of the Past. Review of Radical Political Economics 24 (3&4).

CONSOR Intellectual Asset Management Values The Robert Rauschenberg …  — San Francisco Chronicle
CONSOR Intellectual Asset Management was hired to provide an intellectual property valuation of the portfolio of copyrights and related intellectual assets (the “IP”) associated with the artistic career of Robert Rauschenberg. His estate holds …

4. Poetry and Virginity
4. Poetry and Virginity
Paul Hillegonds
Paul Hillegonds
Christian Hudson -- on Being a Man [Full Length]
Christian Hudson -- on Being a Man [Full Length]
Atlantic Publishing Company (FL) How to Read and Understand Financial Statements When You Don't Know What You Are Looking At: For Business Owners and Investors
Book (Atlantic Publishing Company (FL))
McGraw-Hill Best Practices for Equity Research Analysts: Essentials for Buy-Side and Sell-Side Analysts
Book (McGraw-Hill)

Related posts:

  1. Non-physical assets reporting
  2. Non-physical assets acquitions
  3. Non-physical assets evaluation