vania-janet/multiturn-rag-retrieval-data huggingface dataset:
My theory is that the massive swell of fear from 2008 until now has made people realize that they are never safe, and that debt is the killer.   When private sector incomes drop (loss of job, less consumer demand, etc) we cannot afford to service our debt and this leads to catastrophic default, with assets being lost to creditors. On the other hand, if you own your assets outright, a significant and long lasting drop in income can usually be sustained, or at least the assets are not lost.  In a time of high risk to income, like now, it is better to pay down debt, even if it means tightening the budget a bit. Better to lose some business/utility now than to lose it all later to creditors.  Thanks for the post, there is some interesting info in here. I also find it interesting that these world class economists are presenting these horribly ugly excel graphs.
Most national banks are required by the regulations of their host countries to hold significant reserves in the form of government debt. A default would likely wipe out their capital and your common stock would become worthless. The common stock only has positive value today because of the option value based on the possibility the host country will evade a default.
"No.  If the share price drops to $0, it's likely that the company is in bankruptcy. Usually, debt holders (especially holders of senior debt) are paid first, and you're entitled to whatever the bankruptcy proceedings decide to give holders of equity after the debt holders are paid off. More often than not, equity holders probably won't get much. To give an example, corporate bankruptcy usually involves one of two options: liquidation or reorganization. In the US, these are called Chapter 7 and Chapter 11 bankruptcy, respectively. Canada and the United Kingdom also have similar procedures for corporations, although in the UK, reorganization is often referred to as administration. Many countries have similar procedures in place. I'll use the US as an example because it's what I'm most familiar with. In Chapter 7 bankruptcy, the company is liquidated to pay its debts. Investopedia's article about bankruptcy states: During Chapter 7 bankruptcy, investors are considered especially low on the ladder. Usually, the stock of a company undergoing Chapter 7 proceedings is usually worthless, and investors lose the money they invested. If you hold a bond, you might receive a fraction of its face value. What you receive depends on the amount of assets available for distribution and where your investment ranks on the priority list on the first page. In Chapter 11 bankruptcy, the company is turned over to a trustee that guides it through a reorganization. The Investopedia article quotes the SEC to describe what happens to stockholders when this happens: ""During Chapter 11 bankruptcy, bondholders stop receiving interest and principal payments, and stockholders stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your stock in exchange for shares in the reorganized company. The new shares may be fewer in number and worth less. The reorganization plan spells out your rights as an investor and what you can expect to receive, if anything, from the company."" The exact details will depend on the reorganization plan that's worked out, local laws, court agreements, etc.. For example, in the case of General Motor's bankruptcy, stockholders in the company before reorganization were left with worthless shares and were not granted shares in the new company."
"There is no hard and fast rule. If there was, people could cleverly arrange to make money just often enough to stay on the ""ok"" side. It's a judgement call by the CRA and it probably starts with an audit, and depends on the reasons for the loss. Simple example: your business is selling your time at X an hour and you have expenses that you will cover if you sell Y hours a year, where Y is a lot less than the 2000 hours we have to sell each year. Maybe 300. And you had a big contract but it fell through and though you tried and tried you couldn't get another contract. This will probably be considered a reasonable loss. Another example: your business is selling art or antiques, most of which are kept in your house where you can look at them every day and enjoy them. Your expenses include lots of flights to places where these art or antiques come from, or perhaps are inspired by, along with hotel and restaurant costs, and you would need to sell your entire inventory every year just to cover these expenses, yet you only sell one or two pieces a year (or none) and there's no indication that you're particularly trying to sell more than that. This will probably be considered an unreasonable loss, and if the situation persists for many years in a row, the expenses may end up being disallowed. Side businesses often lose money at first. In fact, once they stop losing money they stop being side businesses. If you have spin up costs like buying hardware, developing software, or acquiring inventory, and you can show how long those extra costs can be expected to last, your expenses are less likely to be disallowed. That's the issue, not how many years in a row the loss occurred. This archived CRA document http://www.cra-arc.gc.ca/E/pub/tp/it364/it364-e.html gives examples of startup expenses that were allowed in years that didn't have revenue, never mind profit."
At the most basic level, the employee is getting a share of ownership in the company and would get a percentage of the sales price. That said, as littleadv alluded to, different share classes have different priorities and get paid in different orders. In a bankruptcy, for example, some classes almost never get paid in practice because they are so far down the ladder of priority.  The first step you should take would be to try to clarify what you are getting with the company itself. Failing that, contact a financial professional or an attorney in your area who can read the terms and give you a better understanding of the contract before you sign.
&gt;Executives commonly get good payouts from these things.  First, when companies are in some of bankruptcy or financial distress, they are forced to pay more to retain certain personnel due to the nature of the situation. If the executives left, then nobody would be willing to come in and wind up the assets of the company. It would end up costing even *more* money in the long run because you won't get talented people and you will have to bring in people with little to no knowledge of your company or your industry.  Second, bankruptcy law provides very clear guidelines for the priority of different creditors. And this is tied into the incentives that we want to encourage. If secured creditors did not get priority, then they would never lend and we would not have economic growth. The reason equity shareholders are last in priority is because they took on the risk of owning the company.
Without the details of a specific bank it's hard to give a definitive answer, but here are some potential valid reasons I can think of: And most importantly
"Usually when the government defaults, the currency gets devalued. So as a debtor, that's a good thing -- your debt gets devalued. The ""catch"" is that your income and buying power is also devalued. So unless you happen to own the type of assets that become more valuable during those circumstances (real property, farms, utilities, certain industrial things, etc) you're looking at tough times ahead."
Doesnt mean that equity or even debt holders wouldn't lose their investment.  Those money and banking texts are presently useless post GFC given the incredible moral hazard and how all of the traditional bankruptcy rules were ignored.
You can be a millionaire and either not own a home (e.g. rent) or have a home whose value has declined to less than the original purchase price.  Bankruptcy is for people unable to pay their debts. There is a difference between being unable to pay ones debts and unemployed. Unemployment benefits exist simply to help those out of work. Additionally, hiring a lawyer and filing for bankruptcy is neither free nor cheap.
Do you really think it will be cheaper for Equifax now?  Treating your customers right is always cheaper in the long run when you still have a respectable business running.  Going out of business or just declaring bankruptcy is extremely expensive and stuff like that happens when companies treat their customers badly.  I know monopolies like Comcast are a bit different but for the most part this theory holds true.
Inflation will damage the value of those cash reserves. This will harm the company's value. (Other factors may or may not be harmed. or helped.) Borrowing costs may be related to inflation, but they're not directly tied. Inflation happens, in fact, when it's easy to borrow money and more money gets created than new economic activity. (Also, if a competitor really needs to raise money, they can also issue new equity. It's not all borrowing.)
In all transitions, real people actually did suffer.  In the large view, new markets were created and new jobs appeared.  But the people who got those new jobs were not the same people who originally lost them.  When the pace of such disruption is relatively slow, those pain points are manageable.  When the disruptions start coming one after another in rapid fire, the managing of problems of that many real, suffering, jobless or under-employed people becomes a disruptive problem in and of itself.
"Exactly it. I declared bankruptcy over 7 years ago. I was in a bad situation - I was laid off, the jobs in Salt Lake dried up after the Olympics, everything was in the crapper.  I found new work - in California. Went off and lived there alone for six months while my wife and children stayed behind. We used all of our savings keeping up on the mortgage, paying bills - and living like paupers. Once my wife came down, we knew we couldn't afford a place in CA *and* our home, so we rented it out.  To people who didn't pay their rent for six months, and we were so far away we couldn't just fly back to make it happen. And my wife was pregnant this whole time.  Finally, because of my wife, we gave in. And I felt awful. I had failed my family, I had failed my wife - and I felt like I had failed myself. I remember being so ashamed I told *no one* for almost 6 years.  Until I found out I wasn't the only one. Until I had close friends tell me of their troubles. I hadn't been overly irresponsible, I hadn't been buying up big TVs and junk. I was just trying to make a living, did good work - and just got caught up in bad luck.  But the shame didn't go away. And it's only now, when I know more, when I see companies declare bankruptcy, or very wealthy people do so, that I realize that yeah - I have to take care of my shit, and I do everything I can for that. But at the same time, if bad stuff happens, I shouldn't spend my life beating up on myself because I had ""shit happen.""   Shit happens. Everybody should have a second chance to try again. Learn from the mistakes you made, plan better if you can, and realize that the best laid plans of might and men oft go awry. Try again, and hopefully it'll work out better next time."
A 'bailout' is money from the government to keep open a business that is no longer viable and by rights deserves to fail.  What happened in this case was different. All banks rely on the overnight bank lending market for liquidity. It is the grease that oils the wheels of international banking. That is not a sign of weakness or recklessness. It is just standard banking practice. In 2008, during the failure of Bear Stearns and the Lehman Shock the overnight lending market simply stopped operating as nobody knew who they could trust and as a result nobody trusted anybody. Something needed to temporarily replace this overnight lending until the crisis was over. This is what that cash infusion was. It was not a bailout.
"Well, primarily because that's fraud and fraud prevents a debtor from receiving a discharge in bankruptcy court.  Fraud would be pretty easy to prove if you didn't have an income change and you have several lines of credit opened on and around the same day with almost no payments made toward them.  Additionally, thanks to the reforms of the bankruptcy code, if your income exceeds the median income of your state you'll be forced in to a Chapter 13 and committed to a repayment plan that allocates all of your ""disposable income"" to your creditors. Now if whoever posted that will attempt to simply not pay then negotiate repayment plans with their creditors the process will last far longer than 7 years.  It takes a long time to be in default for enough time that a consumer creditor will negotiate the debt and this is assuming the creditor doesn't sue you and get a judgement which could apply liens to any property you may own.  The judgment(s) will likely cause you to pursue bankruptcy anyway; only now you're at least a few years beyond the point at which you ruined your credit."
"What happened was that people would start an ""Internet"" company without any viable business plan, and investors would pour money. Any company with "".COM"" or ""eSomething"" or ""netXXX"" or whatever would get tons of money from investors, basically selling dreams of getting rich fast. The companies that flourished back than had often no sales and no income, yet they paid high salaries and provided very lucrative benefits to the employees. One of the examples is Mirabilis - company that invented the on-line messenger (ICQ), but provided free service and free products (there were no fees associated with using the ICQ messenger). They got bought for almost half a billion dollars when they had ZERO revenues, by AOL. AOL sold the company, ten years later, for less than 200 million dollars when at that time ICQ (or, as re-branded, AIM) was already providing revenue (from advertisements). Eventually, investors stopped pouring the money in (for various reasons, but amongst others the higher rates and the slower overall economy), and almost immediately companies started going out of business, and then it all blew up."
"Market makers, traders, and value investors would be who I'd suspect for buying the stock that is declining. Some companies stocks can come down considerably which could make some speculators buy the stock at the lower price thinking it may bounce back soon. ""Short sellers"" are out to sell borrowed stocks that if the stock is in free fall, unless the person that shorted wants to close the position, they would let it ride. Worthless stocks are a bit of a special case and quite different than the crash of 1929 where various blue chip stocks like those of the Dow Jones Industrials had severe declines. Thus, the companies going down would be like Apple, Coca-Cola and other large companies that people would be shocked to see come down so much yet there are some examples in recent history if one remembers Enron or Worldcom. Stocks getting delisted tend to cause some selling and there are some speculators may buy the stock believing that the shares may be worth something only to lose the money possibly as one could look at the bankrupt cases of airlines and car companies to study some recent cases here. Circuit breakers are worth noting as these are cases when trading may be halted because of a big swing in prices that it is believed stopping the market may cause things to settle down."
If you are the only owner: then morally there is nothing wrong with this, as long as you make sure that everything is tracked so that you pay the proper taxes from the correct entity. The danger for you and your business is if the transfers aren't planned. Because you may not be re-investing enough of the profits back into the company. That means that the equipment may be aging but you aren't replacing it, it can also mean that you aren't spending enough on business development.  If you pay yourself so much that you bankrupt the company that isn't good. If you live the good life but starve the employees and they realize it, or if you starve the business and the employees realize it; then you might have a problem motivating and retaining employees.
That is but ONE liability out of a dozen possibly affected. Which liabilities going up for some businesses is irrelevant. What is relevant is the cost analysis every company must do when setting up it's future plans and forecasts. If government uses a carrot or a stick to incentivize or deincentize certain behavior, guess what companies do?   So if there is a liability above say 5,000 people and they've got 6,500 currently and if they shrank it to 4,999 to avoid paying xyz increase in this or that. Guess what they'll do?   You can say, oh they're not paying their fair share, or think about the 99% but the bottomline is that some companies will go into survival mode if they get anymore squeezed. If this was a good business envionment, fine, but it's not. (and if it was fine they wouldn't need to pull increased taxes to hit revenue).   Here's a great example of how increased burdens can lead to withdrawl of investment:   http://www.bloomberg.com/news/2012-10-11/hollande-robbed-of-growth-driver-as-companies-curb-investments.html  There is also a direct correlation where taxes go up beyond a certain point and revenues go DOWN:  http://i.imgur.com/BPUAi.jpg  Fairness is all well and good, but more taxes and liabilities do not automatically mean more revenue. It is a disincentive to produce more when there are more burdens on you. You go into survival mode, you go into hibernation mode.
In addition to asking an accountant, I would also ask a lawyer.  When exploring the same question for myself, I found that one of the benefits of incorporating or forming an LLC is that your personal assets are better protected.   Including asset protection, here are 5 reasons to incorporate: Initially, I thought that as I had so few assets, I should not be concerned.  I was glad I was able to do a free consult with a lawyer who advised me to look into forming an LLC.  (Ultimately, my planned business idea never panned out.  So, I never went the incorporation/LLC route.)  Hope this helps!
"I would add to the other excellent answers that another factor besides just high unemployment numbers is the fear people have regarding the ""financial"" aspects of the country, that is the value of stocks and the value of the dollar.  When the economy is sluggish it means people aren't buying enough, therefore companies aren't making enough, therefore their profits are too low and people start to divest from them, and stock prices drop.  Or even the fear of this happening can induce people to sell off shares.   The point is, people are worried ""in this economy"" because if--due to unemployment, low spending/consumer confidence--the stock market crashes again as it did in 2008/09, that represents a lot of savings lost, e.g. 40-50% of what one was counting on to retire with, particularly if you panic sell at the bottom.  Now suddenly it's as if you had a huge robbery, and you will have to work longer into your retirement years than you'd planned.  Similarly, if, due to monetary policy, the U.S. inflates the dollar, what one saved for retirement may not be sufficient.  (These arguments are true for shorter periods than just one's retirement, but just taking that as an example). So it's not just unemployment that is worrisome ""in this economy"".  This said, I agree with George Marian that one ought to be careful and plan well regardless of the winds of the economy.  I guess for most people (and companies), though, ""in this economy"" means they can't get away with the kind of carelessness they might have during a boom."
Just to be clear, it is Chapter 11. They are only restructuring their debt, not closing down. Every store is still open and will continue to be for a while. Things are not necessarily clear skies for them, but they definitely aren't going under yet
"If you owe the money to A, and B owes you money and goes bankrupt, that has no effect whatsoever on your loan from A.   Obviously.   Your best bet -- while you still owe and are owed by the same company -- is either get them to agree to apply your credit to your debt (reducing it to $30,000) -- or rush to the courthouse and ask a judge to order this done.   You want to do this well before the bankruptcy is filed; too close and someone could object to you having been paid preferentially or ""out of turn"" -- and claw back the money, meaning you now owe it to the bankruptcy trustee.   Your debt to them is, from their perspective, an asset.  It is an asset with a cash value (based on the probability of people in that portfolio paying).  It can be sold to gain some immediate cash instead of more cash over a time period.  This is routine in the debt world.  Before or during the throes of bankruptcy, and depending on what the reorganization plan is, the bank is quite likely to sell your debt to someone else to raise cash - typically a distress sale for a fraction of its principal value (e.g. 20% or $10,000).  That goes into the pool of money to pay creditors such as yourself, and if you're lucky, you'll get some of it.   So good on you, you got $2000 back from the bank and now you owe someone else $50,000.  I'm assuming they owe you $20,000 for IT services or because you put a new roof on their branch, or something like that.  If it's money on deposit at the bank, then two things are true: First, pre-bankruptcy, you can trivially command the bank to dump the entire $20,000 into paying down the debt.  Instantly: done, and irreversible.  The bankruptcy trustee can't claw that back because it was never the bank's money, it was yours.   Second, any civilized country has deposit insurance, which they typically implement by helping another bank buy out your bank, and continue to honor your deposits, so this is seamless and hands-off for you. Your old checks continue to work, your branch just changes their sign.   This deposit insurance has limits, which is only a problem for the very rich (who are dumb enough to put over the limit in one bank)."
More to the point, why are executive incentives, bonuses, options, etc, not on the chopping block just as much as union contracts, when bankruptcy is declared? I'm far from pro-union, but this seems like basic fairness. At the very least the unions (and other disenfranchised creditors) should be able to get a lien on those incentives to partially compensate their losses. As a matter of public policy, there should never be a financial incentive to enter bankruptcy.
I once bought both preferred and common shares in a bankrupt company.  It is true that those preferred shares had less potential for appreciation than the common shares.  The reason is because the preferred shares were trading around $50 and had a face value of $1000.  This means that if the bankruptcy proceedings ended up finding enough assets to make the preferred shares whole, then the preferred shareholders would be paid $1000 per share and no more than that.  So if you bought the preferred shares at $50 and received $1000 per share for them, then you made a 1900% gain. But if the bankruptcy proceedings found enough assets to pay not just the preferred shareholders but also the common shareholders, then the common shareholders had the potential for a greater gain than the preferred shareholders.  The common stock was trading around 20 cents at the time, and if enough assets were found to pay $10 per share to the common shareholders, then that would have been a 4900% gain.  The preferred shares were capped by their face value, but the common shares had no limit on how high they could go.
RMA Journal is good. You should search for more in depth articles if you really want a good handle on all of the recent regulations. Dodd-Frank, CFPB regs, Basel II and the new capital reserve requirements and how that's affecting the industry. The irony about much of the new regs is that they are driving smaller lenders into selling their company because it is simply too costly to carry the staff necessary to ensure compliance; thus making the too big to fails even bigger.