In our lectures, we have spent the last couple of weeks discussing the contemporary issues in financial ethics. The first lecture focused on ethics in regard to professional ethics. I think it is important to understand the definition ethics to truly understand its subjective nature. Ethics can be simply defined as a set of moral principle which govern a person’s behaviour. Ethics is a topic debated often in the corporate world especially due to scandals which can have devastating effects on a company. A topic which is also discussed frequently, is the implementation of artificial intelligence in corporations, the reason why this can often be a controversial topic is due to the many questioning whether or not it is ethical to implement such technology. I think this largely stems from the fact that technology such as artificial intelligence often replaces the jobs of humans and is often found to be much more efficient for a business. But is it morally correct to replace t...
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What kind of man is named ‘the greatest conman of all time’? The documentary The Madoff Hustle: This world attempts to answer the question above, as they explore who Bernie Madoff was by interviewing his victims as well as his peers. The documentary begins with the story of Bill Foxton a glorified war veteran who happened to lose his life savings because of the Bernie Madoff con, which ultimately led to his death as he committed suicide. This story drew me in as it showed that many from all walks of life were drawn to Bernie Madoff and his con, even an author who published a book on gullibility was conned out of thousands (I know it is harsh, but that is quite funny and ridiculous). So, what exactly was his con? Well Bernie’s ‘elaborate’ scheme was none other than a Ponzi scheme, a well-known simple con which tricked his victims/investors out of $65billion. The Ponzi scheme consists of obtaining money from investors by promising them high returns with little/ o...
Have you ever even heard of Earthport, because I certainly have not? The firm specialises in cross border payments and its main advantage is the fact that the system allows banks and/or financial firms to move money across borders (this is all without having to liaise with local regulators and banks first). So, I can definitely see why large corporations such as Mastercard and Visa are now suddenly interested in bidding for Earthport. Visa started the bidding war off with an initial offer of £198 million which was an all-cash offer. It’s not surprising to hear that Mastercard then gate-crashed the deal with an offer of £233 million. So why are these firms bidding for Earthport? I think it’s due to the synergies the firms recognise between themselves and Earthport, with all the companies being payment based. There has been a recent influx in mergers and acquisitions in the payment industry which is mainly due to disruption in technology as customers turn to cashless...
This week we were asked to choose a financial movie of our choice and from the list I chose The Company Men, which is set in the context of America post- financial collapse in 2008. Of course, the movie stood out to me because Ben Affleck plays the lead character (and who didn’t fancy Ben Affleck before the terrible back tattoos). So, the movie begins with thousands of workers being ‘laid off’ and even those who survive till the end of the day with a job intact are worried if they’re next to go. It was interesting to see how the financial collapse affected businesses in the US, although I don’t remember much from this time as I was only just starting secondary school, my experience of the financial crash would mainly be from watching English documentaries rather than American movies on the subject. One of the characters, Gene, argues against the CEO Salinger’s actions with calls to innovate rather than just firing people. It seems as though the CEO really doesn’t hav...
This week, the lecture focused on the topic of dividends. In the United Kingdom at the moment, the distribution of dividends is at an all-time high. £99.8 billion was distributed last year to shareholders, this was due to a number of favourable conditions in the market such as the slump in the value of the pound, as well as rising profits in firms. I think it is interesting that despite the uncertainty around BREXIT and what this could possibly mean for the economy, analysts predict that 2019 will also be a record-breaking year in terms of dividends. However, although dividends are on the rise, this does not necessarily mean each firm which paid dividends are performing well financially. For example, Hennes & Mauritz (H&M) disappointed their investors once again with a decline in profits, placing blame on the replacement of their logistic systems and activities which were in preparation for upcoming transitions (whatever that means). A few years ago, I was defi...
Uber’s competitive rival, Lyft is beating the firm in the race to the competitive markets and is on the fast track to become the first publicly listed car booking company. I personally have not used the Lyft service myself, as I usually opt for Uber when I’m away on a trip. I think downloading a whole new app and setting up a new account seems pointless when Uber provides the same service, just sounds like a hassle. However, even I can see the potential which Lyft has to become a household name like Uber (especially at a time where Uber’s reputation has taken multiple hits due to the treatment of their employees). Lyft was last valued at $14.5 billion and has raised an astronomical amount of $85 billion from private funding over the past few years. Now, with over 31 million riders and revenues of $2.2 billion the company is pitching the biggest technology listing in the US in over 2 years. The firm is aiming to sell around 31 million shares in order to raise $2 ...
‘ Everyone is making money and spending it like no tomorrow’. This week we were asked to watch a finance documentary of our choice, considering I find finance documentaries extremely boring, (I prefer the serial killer documentary type to be honest) choosing a documentary was actually quite difficult. I watched The Love of Money – Age of Risk documentary and I was actually pleasantly surprised as I actually enjoyed watching it. The documentary clearly linked with the stock market efficiency lectures delivered in week 3. While it showed flashbacks of the ‘big boom’ in Britain in the early 2000s I couldn’t help but think it looked like a scene out of the 1920s. In the USA the property market was booming and the Labour government in the UK were splashing cash on the NHS and even schools. Unimaginable bonuses and wealth were created directly from the stock markets through tax which was subsequently invested into the public sector. Before the crash,...
Somewhere, in a town or city near you there is a poor little cyclist with a bag of food on their back frantically cycling to their next destination (and I’m probably about to overtake them). I think Deliveroo and Just Eat really are the big fish in the food delivery market and it seems as though Uber Eats is aiming to be the next big shark to destroy all competition. Even with my car sitting in the drive, more often than not I will happily pay a small fee for my takeaway to be delivered via Just Eat just because it is 10x easier than getting up from the sofa and getting it myself. The problem for Uber Eats is that the food delivery in the UK in particular, really is a highly competitive industry. Which explains Uber Eats’ recent moves such as their decision to cut their fees from 35% to 30% for delivery and allowing restaurants the option of delivering their own food to the customers. This likens the business to companies such as Just Eat whic...