tag:blogger.com,1999:blog-73323402012-02-03T00:27:20.200-05:00Finance News, Academic articles, and other things from FinanceProfessor.com. Remember Finance is not only important, but it is also fun!!!FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.comBlogger23471100tag:blogger.com,1999:blog-7332340.post-55749268926072559542012-02-03T00:27:00.000-05:002012-02-03T00:27:20.212-05:00

Senate OK’s bill barring Congress from insider trading - Nation - The Boston Globe:Remember the 60 Minute Piece that exposed insider trading? It seems it is having a desired effect. "The Senate overwhelmingly passed legislation yesterday to explicitly prohibit members of Congress and their staffs from financially profiting from insider information, a rare bipartisan effort that is expected to be

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-72931762021924992242012-02-01T11:04:00.000-05:002012-02-01T11:04:13.580-05:00

Financial Reporting Quality in U.S. Private Firms by Ole-Kristian Hope, Wayne Thomas, Dushyantkumar Vyas :: SSRN: "We provide a large-scale investigation of financial reporting quality (FRQ) among U.S. private firms. Private firms are vital to the economy but have received limited attention from researchers due to a lack of available data. Using a new database that contains accounting data for a

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-15041197362115584142012-01-29T00:34:00.000-05:002012-01-29T00:34:59.043-05:00

New research suggests link between genetics, Wall Street success - ContraCostaTimes.com:Not too much, not too little, but somewhere in the middle."Zak and two graduate students published their research in the January issue of PLoS One, an online science journal. The researchers conducted their study by comparing the genetic codes of working Wall Street traders to a control group of business

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Affinity fraud: Fleecing the flock | The Economist:"Besides the Madoff saga, Marquet International, a consultancy, has identified more than 300 sizeable Ponzi schemes from the past ten years, with combined losses for investors of $23 billion. It estimates that up to half of those were affinity-based. No one has a reliable number for smaller frauds over the same period, but guesses range from $5

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-23865025312045292112012-01-28T01:15:00.000-05:002012-01-28T01:15:53.114-05:00

This one will definitely make it to class!Does Board Structure in Banks Really Affect Their Performance? by Shams Pathan, Mamiza Haq, Philip Gray :: SSRN:"Using a panel of 212 large U.S. bank holding companies over the period 1997-2004, we examine if board structure (board size, composition and gender diversity) in banks relate to their performance. After controlling for relevant sources of

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Image via CrunchBaseChinese Readers on the 'iEconomy' - NYTimes.com: By now you probably have seen the series of articles the NY Times is running on China and Apples. If not, I HIGHLY recommend you read them and realize why so many jobs went overseas (pun intended). The first article sets the stage by recounting a conversation with President Obama and the late Steve Jobs where Jobs basically

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The Costs and Benefits of Long-Term CEO Contracts by Moqi Xu :: SSRN: Abstract: A good explanation of why long term contracts may increase investments but at the cost of worse short-term performance."This paper uses a new dataset of 3,717 US CEO employment contracts to study the time horizon of CEOs. Longer contracts offer better protection against dismissals: turnover probability increases by

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               Image via WikipediaFinancial Trust Index: Less Than a Quarter of Americans Trust Financial System - MarketWatch: "The latest issue of the Chicago Booth/Kellogg  School Financial Trust Index released today finds that only 23 percent of Americans say they trust the country's financial system. And, trust for banks continues to slide downward." Warning: this makes for fertile ground

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-16037912361055576632012-01-26T17:33:00.000-05:002012-01-26T17:33:10.943-05:00

Royal Bank of Scotland Slashes C.E.O.'s Bonus - NYTimes.com:In less than an hour I will be teaching on how monitoring and public opinion do influence firms, I guess we have a new example:"Royal Bank of Scotland announced on Thursday that it would pay its chief executive, Stephen Hester, an all-stock bonus of £963,000, or $1.5 million, less than half what he received last year.The bank, which is

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-34432896679824101692012-01-24T07:50:00.002-05:002012-01-24T07:50:00.586-05:00

If you care, you already saw that Natural Gas prices were up on Monday.  Why?  Well in part because our previous estimates of the natural gas potential in the Marcellus Shale were WAY off :(  From Bloomberg: The U.S. Energy Department cut its estimate for natural gas reserves in the Marcellus shale formation by 66 percent, citing improved data on drilling and production......The estimated

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-33588696882242594042012-01-23T23:17:00.000-05:002012-01-23T23:17:38.582-05:00

The "why" for vertical mergers just got more cloudy.  Vertical mergers are those that go up or down a firm's supply chain.  For instance buying your supplier or buying your customer. The standard explanation for the "value added" by such a deal has been a reduction of transaction costs (negotiation, cost or reneging, etc) as well as control of a supply source and quality etc issues.  And they

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-83475363903881583142012-01-23T10:03:00.001-05:002012-01-23T10:11:31.980-05:00

I hope no one is surprised by this: managers seemingly try to influence analysts and shareholders by providing good news just prior to the firm's annual meeting. That is the conclusion on a paper by Dimitrov and Jain that examines the 40 days prior to the firm's annual shareholder meeting. It’s Showtime: Do Managers Report Better News Before Annual Shareholder Meetings? by Valentin Dimitrov,

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-63890782989279150132012-01-23T09:47:00.000-05:002012-01-23T09:47:34.564-05:00

My BonaResponds work and a conversation on yesterday's run got me thinking as to how much early life events affect adults. That there are generational poverty type issues is well known, but I had never really thought about the type of assets held controlling for wealth but Christelis, Dobrescu, and Motta had: (emphasis mine)Early Life Conditions and Financial Risk-Taking in Older Age by

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-4201166340312722672012-01-20T02:45:00.000-05:002012-01-20T02:45:43.368-05:00

Analysis: The great hedge fund humbling of 2011 | Reuters:"...was a humbling year for the $1.7 trillion hedge fund industry, with the average fund dropping 4.8 percent and some stock-focused funds suffering an average 19 percent decline, according to research compiled by Hedge Fund Research and Bank of America Merrill Lynch analysts.Investors who sidestepped hedge funds and instead chose mutual

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My brillant sell-everything trade (cont.) - Jan. 18, 2012:Ties together some behavioral finance and some traditional finance:"The truth is that while most economists assume that stock movements are largely random, there's plenty of debate about how far that randomness goes.What should an individual investor make of that? Assume stocks are too unpredictable for you to be a profitable trader, but

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-59262575618477215432012-01-19T12:24:00.000-05:002012-01-19T12:24:22.517-05:00

Image via WikipediaKodak Files for Bankruptcy Protection - WSJ.com: "Eastman Kodak Co. filed for Chapter 11 bankruptcy protection in New York early Thursday morning, after the struggling photography icon ran short on cash needed to fund a long-sputtering turnaround. The storied former blue chip said it had secured $950 million in financing from Citigroup Inc. to help keep it afloat during

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com1tag:blogger.com,1999:blog-7332340.post-51112652511198605412012-01-18T01:46:00.000-05:002012-01-18T01:46:41.966-05:00

Image via WikipediaHedge Funds are About to Undress: While we do not know the consequences of the new regulations, Oilprice.com is expecting a contraction in the hedge fund world as a result of the new rules" "The July 21 deadline for the hedge funds to register required by the one year anniversary of the Dodd-Frank bill is fast approaching, and the industry is roiling with turmoil. The net

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Silent Combat: Do Managers Use Share Repurchases to Trade Against Short Sellers? by Harrison Liu, Edward Swanson :: SSRN: I caught myself literally saying "Wow" when I read this.... Liu and Swanson look at the timing of stock repurchases. Past literature had shown that managers prefer share repurchases to dividends. One reason often given for this preference is the flexibility that buybacks

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Financial Planning for the Totally Innumerate (Part 1: Savings) | Think Tank | Big Think: Great advice from Zvi Bodie! "Don’t try to become an expert in finance, but don’t outsource your decisions, either. You’re a novelist. You don’t have time to read textbooks on investment strategy. But neither, says Bodie, can you afford to ignore financial matters or outsource them to professional advisors

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-71053432652191595912012-01-16T23:14:00.001-05:002012-01-17T11:31:45.135-05:00

Is there too much of a growth emphasis in the stock market in the business world and in the private equity corner in particular?  That is the argument that Felix Salmon is giving in his recent article for Wired.  He was writing with respect to claims by Mitt Romney that Bain Capital (a private equity fund which Romney was CEO) created 100,000 jobs.  (It is a number on which there is much debate

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-60635985906502360132012-01-16T10:40:00.000-05:002012-01-16T10:40:44.416-05:00

Great apes make sophisticated decisions: Research suggests that great apes are capable of calculating the odds before taking risks: Researchers have demonstrated that apes can evaluate risks and rewards and that apes are risk averse (they demand a greater payoff to take on risky "investments"). From Science Daily reporting on a paper by Daniel Huan (and others) "The apes were presented with two

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-10427660947657551542012-01-16T02:12:00.000-05:002012-01-16T02:12:22.978-05:00

I am back....have been off of r a few weeks with BonaResponds to Alabama to help rebuild, but I am back.  Classes start later today in fact. Just wanted you to know that the blog (and more) is now available on Facebook.  It should make reading it easier (hey we are all on Facebook anyways). Here is the link>  http://www.facebook.com/FinanceProfessorBlog   enjoy!

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-49478714619804403682012-01-03T07:10:00.002-05:002012-01-03T07:20:33.077-05:00

Investment strategist: 'Big banks make their money from optimism' | Joris Luyendijk | guardian.co.uk: "In big banks and asset management companies it's very difficult to be negative about the future. The reason is simple: they make their money from optimism. If you are going to tell investors that the economy is going down, they will move their money somewhere safe and reliable such as cash. It

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-7247040033307125452012-01-02T03:02:00.000-05:002012-01-02T03:02:13.420-05:00

No more snowplows or icy roads? - The Globe and Mail:This is so cool it has to be posted on FinanceProfessor, even if not per se a finance piece. " Mr. Brusaw, an electrical engineer, will seek to demonstrate that his smart solar road panels have the capacity to convert the U.S. highway system (and, by extension, Canada’s) into a huge power generator theoretically capable of producing three times

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-62338267136634725382012-01-02T02:46:00.001-05:002012-01-02T02:50:36.427-05:00

Exxon awarded $908m for lost assets - Business - The Boston Globe: Towards the end of Corporate Finance we generally talk about International Finance and go into some detail on the risks involved in doing business internationally. For instance we talk about expropriation and nationalization. Technically expropriation can be done with monetary reimbursements or not. Nationalizations tend to

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-53997081690185443982011-12-30T03:04:00.002-05:002011-12-30T03:05:59.470-05:00

                         Image via WikipediaDan Ariely » Blog Archive This Is How I Feel About Buying Apps «: Another use of anchoring (and a cool cartoon): Click through! "We are perfectly willing to spend $4 on coffee (for some of us this is a daily purchase), or $500 on devices that you can argue we don’t really need. However, when it comes to buying digital items, such as apps, most of

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-2045439896455314752011-12-30T02:00:00.001-05:002011-12-30T02:02:04.785-05:00

New York Mets’ Citi Field Bond Rating Outlook Cut by S&P - Businessweek: A few days ago I posted on the NY Mets' Financial difficulties. Now the Mets' difficulties are dragging down the rating of the bonds that were used to finance Citi Field as well. The bonds, which are in theory separate from the Mets, were given a negative outlook and a BB+ rating by S&P based on the fact that the Bonds

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-67103663439080432342011-12-28T13:57:00.001-05:002011-12-28T14:03:48.147-05:00

Tabarrok on Innovation | EconTalk | Library of Economics and Liberty: Ok, so this is probably economics, but it was so interesting I could not pass up sharing it.  And be careful to jumping to conclusions.  He points out that the one area where he believes it works is in pharmaceuticals.  His conclusions?  Create patents of differing times periods (some 3 years, some 20 years, etc). "Alex

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Correlation or Causation? - Businessweek: The pictures/graphs will be more memorable than a long discussion! "Need to prove something you already believe? Statistics are easy: All you need are two graphs and a leading question" H/T to Holly S for the link!  Related articlesCorrelation vs. Causation (A Mathographic) (seomoz.org) Correlation vs. Causation (A Mathographic) (mt-soft.com.ar)

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-52277894982455582212011-12-27T01:33:00.001-05:002011-12-27T01:43:55.167-05:00

TEDtalksDirector's Channel - YouTube: While a rational person would not need to impose constraints on ourselves, many of us need to.  In Behavioral finance we often talk about the seeming irrationality of them but all acknowledge both using them and them working.  In his TED talk, Dan Goldstein goes further into this topic and explains why we impose constraints on ourselves (100 calorie packs,

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-26172979350673327852011-12-26T16:42:00.001-05:002011-12-26T16:43:17.270-05:00

Image via Wikipedia Bees teach investors handy lessons | Adelaide Now: Are bees risk averse?  Would they rather have less, but a sure thing?  or are they gamblers willing to take chances for a bigger payoff?   If you said risk averse, you are correct!  From Adelaidnow.com : "During the experiment bees were given their own investment choice to make: Either feed from blue flowers which

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-15515027768510406312011-12-26T15:01:00.000-05:002011-12-26T15:01:20.178-05:00

Image by Getty Images via @daylifeFor Mets, Vast Debt and Not a Lot of Time - NYTimes.com: Oh my...my Mets are not looking good (Remember: debt makes good times great, and bad times horrible.) "... the Mets worry Major League Baseball enough to be seen as a troubled franchise on a short tether. Their $430 million loan on the team is due in 2014. Their $25 million loan from M.L.B. is past due

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-64449691734714536822011-12-25T10:49:00.001-05:002011-12-25T11:06:18.838-05:00

Image via WikipediaImpact Investing - YouTube: Impact Investing Duke' Fuqua School of Business just posted this fascinating talk by Antony Bugg-Levine (author of Impact Investing) on what Impact Investing is and what he sees in the field. It's sort of long, but very interesting talk on Impact Investing! What is impact investing? I would define it as sort of the marriage between traditional

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-18027384110912254452011-12-23T13:59:00.000-05:002011-12-23T13:59:57.078-05:00

In a New York Village, the Bank Around the Corner - NYTimes.com:"This has not exactly been a time of great love for bankers. From the continuing foreclosure crisis to Occupy Wall Street’s campaign against “the 1 percent,” it is easy to forget that not all banks are complicated giants, trading in derivatives and re-hypothecating valueless collateral. The Bank of Cattaraugus, for example, is by

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-55431205314876754032011-12-23T03:26:00.000-05:002011-12-23T03:26:59.634-05:00

Haiti leaders to begin talks on improving investment laws - Haiti - MiamiHerald.com: “It makes no sense that it takes 75 days — used to be 150 days — to register a business in Haiti,” Jean-Louis said, speaking at the Haiti Reconstruction Forum 2011 sponsored by the Inter-American Development Bank (IDB) and Enterprise Florida. “The Martelly-Conille government wants to take action. We are taking

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Brainwaves on the economy translated into a fine science - The National: " The neuroeconomic revolution has passed some key milestones recently, notably the publication last year of the neuroscientist Paul Glimcher's book Foundations of Neuroeconomic Analysis - a pointed variation on the title of Paul Samuelson's 1947 classic, Foundations of Economic Analysis, which helped to launch an earlier

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An Asset-Pricing Model for the Contagion Age: Polson and Scott - Bloomberg:From the Bloomberg "Business Class" Blog:" working on a more accurate pricing model that incorporates The financial crisis and the meltdown in Europe have exposed the deficiencies of traditional asset- pricing models, particularly their inability to account for the effect of contagion from one market to another. The good

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-22870028395863695252011-12-21T03:05:00.001-05:002011-12-21T03:06:36.529-05:00

Inside Capitol, Investor Access Yields Rich Tips - WSJ.com: "When Senate Democrats finally brokered a compromise over the proposed health-care law, a group of hedge funds were let in on the deal, learning details hours before a public announcement on Dec. 8, 2009. The news was potentially worth millions of dollars to the investors, though none would publicly divulge how they used the

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-62715913815976392772011-12-21T02:30:00.000-05:002011-12-21T02:30:05.711-05:00

The U.S. – On Track To Become a Net Exporter of Oil, Once Again — Oil and Gas Investments Bulletin:"For the first time since 1949, the United States is poised to become a net exporter of petroleum, according to the Petroleum Supply Monthly report for November put out by the U.S. Energy Information Administration.Through the first nine months of 2011, the U.S. exported 753.4 million barrels of

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-10165589197346863362011-12-20T11:27:00.000-05:002011-12-20T11:27:25.468-05:00

10 Videos on High Frequency Trading - MoneyScience's blog - MoneyScience:10 Videos on High Frequency TradingI watched several of them and they are well done.My favorite:High-frequency trading from Marketplace on Vimeo.VERY good for class!BTW I definitely recommend you follow MoneyScience.

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-79325344557633971062011-12-20T10:39:00.000-05:002011-12-20T10:39:07.976-05:00

Do Criminal Sanctions Deter Insider Trading by Bart Frijns, Aaron Gilbert, Alireza Tourani-Rad :: SSRN:I was not expecting this:"Although criminal sanctions represent a much greater penalty than civil sanctions, the higher burden of proof required makes their enforceability weaker. This trade-off between severity and enforceability implies that the impact of criminal sanctions is ambiguous. In

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-30694014327664809802011-12-19T10:21:00.000-05:002011-12-19T10:21:57.052-05:00

Walmart Heirs Worth Same Amount As Bottom 30 Percent Of Americans In 2007: Analysis:" The six children of Walmart's founders, Sam and James "Bud" Walton, had the same net worth in 2007 as the entire bottom 30 percent of American earners, according to an analysis from Sylvia Allegretto, a labor economist at University of California-Berkeley's Center on Wage and Employment Dynamics.Though the 2007

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-86120881699861460552011-12-18T02:15:00.000-05:002011-12-18T02:15:39.550-05:00

SEC Says Rudy Ruettiger Is A Stock Scammer - Forbes: "The Securities & Exchange Commission, however, says Rudy Ruettiger has grown up to become a penny stock promoter and scammer. The former Notre Dame walk-on has agreed to pay $382,866 to resolve the SEC’s claim that he participated in a pump-and-dump, fraudulently inducing investors to bid up the stock of his sports drink"Yes, that "Rudy".

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-12791489842580602982011-12-16T11:20:00.000-05:002011-12-16T11:20:14.665-05:00

Taxpayers will lose $14B on auto bailouts – USATODAY.comI confess I have not run any numbers on this, but come on, losing $14B (and maybe more as the article was ambigous on whether this included the "$19.4 billion the government put into GM before the 2009 bankruptcy" or not) can hardly be an unambiguous success. Can it? "Taxpayers will lose about $14 billion on the $82 billion investment to

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-49653644865932905912011-12-14T11:09:00.000-05:002011-12-14T11:09:20.574-05:00

American Airlines, Bankruptcy, and the Housing Bubble : The New Yorker:"Recently, American Airlines filed for bankruptcy, it did so deliberately. The airline had four billion dollars in the bank and could have kept paying its bills. But it has been losing money for a while, and its board decided that it was foolish to keep throwing good money after bad. Declaring bankruptcy will trim American’s

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-56107008191363794282011-12-13T11:03:00.000-05:002011-12-13T11:03:55.332-05:00

BBC News - Top economists reveal their graphs of 2011: "For a long time the perception was that the creation of the euro meant sovereign risk was effectively the same across all countries. That of course proved to be wrong. The Lehman's crisis and financial meltdown that followed affected the deficits and debt levels of different countries in different ways. Interestingly it is much the same

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-17419421459162880502011-12-13T10:08:00.000-05:002011-12-13T10:08:56.040-05:00

Mets, Struggling for Cash, Receive $40 Million Bank Loan - NYTimes.com: "The loan marks the second time in a year that the Mets have received an infusion of cash. A year ago, the team’s owners, Fred Wilpon and Saul Katz, received a $25 million loan from Major League Baseball, but they have not been able to repay it. Meanwhile, Sandy Alderson, the club’s general manager, said last week that the

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-14433594225906491582011-12-09T08:11:00.001-05:002011-12-09T08:11:00.290-05:00

Freakonomics » What Makes a Rogue Trader Tick? A Q&A with FT Columnist John Gapper "In his new e-book, How to Be a Rogue Trader, Financial Times columnist John Gapper explains why this story has become so familiar over the years. As he puts it, the rogue trader is a species of sorts within the world of finance, a special breed with certain behaviors and characteristics that are consistent

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-18141105952499934372011-12-09T01:01:00.000-05:002011-12-09T01:01:25.815-05:00

Very well done. It was a joy to read and I learned quite a bit! Counterparty Risk FAQ: Credit VaR, PFE, CVA, DVA, Closeout, Netting, Collateral, Re-Hypothecation, WWR, Basel, Funding, CCDS and Margin Lending by Damiano Brigo :: SSRN: a dialogue on Counterparty Credit Risk touching on Credit Value at Risk (Credit VaR), Potential Future Exposure (PFE), Expected Exposure (EE), Expected Positive

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-40299768084455004622011-12-08T11:33:00.000-05:002011-12-08T11:33:36.534-05:00

I don't think I expected him to say "well we were short funds and used it to cover losses" but none the less it is an awful lot of money to lose track of.  Bottom Line - Corzine: I don't know where missing MF money is: "In his first public statement since MF's bankruptcy, the eighth largest in U.S. history, Corzine apologized to all those affected and said he was stunned when he heard about the

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-23680899097307696872011-12-07T01:55:00.000-05:002011-12-07T01:55:07.748-05:00

Niall Ferguson: The 6 killer apps of prosperity - YouTube:This should be entitled the "End of the Great Divergence" but oh well. I thought I had shared this before, but I do not see it on the blog and even if I had, oh well. It is that important. I used it in class this semester and it actually was the basis of an essay question. It is not strictly finance, but it is more finance than anyone

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com2tag:blogger.com,1999:blog-7332340.post-41534674397539330972011-12-06T14:15:00.000-05:002011-12-06T14:15:31.414-05:00

Andrew Klavan: Wall Street On Trial - YouTubeWell worth watching!

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-63672512966249126672011-12-06T10:16:00.000-05:002011-12-06T10:16:06.740-05:00

Remember the 60 Minutes piece about Congressional Insider trading?  Well now that everyone knows about it, it appears the Stock Act (blocking insider trading by congress) may be passed.  Will it be enforced?  Will the SEC be afraid to enforce it?  Time will tell. From Yahoo:

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com2tag:blogger.com,1999:blog-7332340.post-83738902229162339382011-12-05T10:09:00.000-05:002011-12-05T10:09:25.474-05:00

Image via WikipediaDo Nice Guys Finish Last? | Wired Science | Wired.com: "Nice guys really do finish last, or at least make significantly less money. According to a new study in the Journal of Personality and Social Psychology by Beth A. Livingston of Cornell, Timothy A. Judge of Notre Dame, and Charlice Hurst of the University of Western Ontario, levels of “agreeableness” are negatively

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-39270557622028866262011-12-02T16:31:00.000-05:002011-12-02T16:31:53.690-05:00

Market Pros Had Bad Year, So Why Not Just Buy Index Fund? - Yahoo! Finance:"Just one in four managers beat the major stock indexes this year, as an intensely volatile market environment drove an aversion from risk that left many dangerously exposed during pullbacks and woefully flatfooted during rallies."and later:"Just one in four managers beat the major stock indexes this year, as an intensely

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-35361327753033385392011-12-02T13:05:00.000-05:002011-12-02T13:05:28.051-05:00

Finance Crooks - YouTubeOk, this is not the usual fare, but some of my students put this video for class. The "rap" starts about 1:30 in. (and you get an 8 Mile view of the local area around SBU as some looks at campus)

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-79449032509370999232011-12-02T10:31:00.000-05:002011-12-02T10:31:01.234-05:00

Podcast : NPR:"...in New York City, two taxi medallions, the metal plates that make it legal to dive a cab in the city, sold for $1 million each.On today's podcast, we try to answer the question — why?"Investing in a taxi medallion has proved a better investment than gold as Bloomberg showed back in August. Interesting look at what can happen when you interfere with markets: someone wins and it

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-19163829365831693202011-11-30T10:29:00.000-05:002011-11-30T10:29:31.375-05:00

Just shaking my head....we have so little idea of what goes on. Think that Enron or Adelphia etc were bad when they hid billions? Try trillions! Fed Faces New Scrutiny for Trillions in Assistance to Banks After Crisis | PBS NewsHour | Nov. 29, 2011 | PBS: "JUDY WOODRUFF: What did you learn about the scope of what the Fed did and who the recipients were? BOB IVRY: It was a lot bigger than we

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com1tag:blogger.com,1999:blog-7332340.post-10633084203706765872011-11-29T09:55:00.001-05:002011-11-29T10:00:09.891-05:00

Gross / Fink: Heavy Hitters Special, Nov. 17 - Video - Bloomberg http://bloom.bg/sMeM6I#ooid=czaGgxMzrdBsdBv6Z-Q8EmotIzII6yU9: Nov. 22 (Bloomberg) -- Bill Gross, co-chief investment officer at Pacific Investment Management Co., and Laurence Fink, chief executive officer of BlackRock Inc., discuss the European sovereign-debt crisis, the U.S. economy and investment strategy. Bloomberg's Erik

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com1tag:blogger.com,1999:blog-7332340.post-64790712097956367752011-11-24T11:50:00.000-05:002011-11-24T11:50:27.773-05:00

Image via Wikipedia From The Conference Board's  Roger Martin via MBA Depot "A board of directors is asked to span a wide (and widening) gulf, resolving the tension between two very different markets with very different actors. On the one hand, boards are intended to act on behalf of outside shareholders... On the other hand, the board must deal closely with executives...motivated to

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-73127867508296953892011-11-24T08:20:00.001-05:002011-11-24T08:20:01.301-05:00

I had never even heard of this, but I definitely want to see it. Margin Call Movie Trailer 2011 Official HD - YouTube: "When entry-level analyst Peter Sullivan (Zachary Quinto) unlocks information that could prove to be the downfall of the firm, a roller-coaster ride ensues as decisions both financial and moral catapult the lives of all involved to the brink of disaster. Expanding the

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-40409988067829408022011-11-24T00:28:00.000-05:002011-11-24T00:31:45.228-05:00

Image via Wikipedia FT Alphaville » Randomness and the lost lesson of Bill Miller: FT Alphaville uses the retirement of Bill Miller to discuss randomness and probabilities: " A newsletter published by Credit Suisse-First Boston in 2003, a few years before the streak ended, calculated the odds of a manager outperforming the market on chance alone for 12 straight years to be one in 2.2

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-64515862512820059382011-11-23T07:39:00.002-05:002011-11-23T07:39:00.312-05:00

I want to use Olympus in class, so I put together a short recap from various sources: From the BBC: "The Japanese camera and medical equipment company, Olympus, has admitted to hiding investment losses dating back to the 1990s. The revelation came after the firm's British president, Michael Woodford, went public with allegations that the company had wasted $1.4bn (£880m) on buying

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-24052156140583118542011-11-22T15:26:00.001-05:002011-11-22T15:27:38.016-05:00

The traditional economist in me has trouble with this.  Why would people care if others have more than they do?  If I am happy, it should not matter if my neighbor gets $20,000 or $200,000 or $200,000,000 a year so long as (s)he has enough to live. On the other side has been a growing field of research that has shown that inequalities hurt the overall "happiness" and even the health of residents

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com2tag:blogger.com,1999:blog-7332340.post-31581895772801060792011-11-22T13:27:00.000-05:002011-11-22T13:27:37.018-05:00

Why Do Listed Firms Pay for Market Making in Their Own Stock? by Bernt Ødegaard, Johannes Skjeltorp :: SSRN:" A recent innovation in equity markets is the introduction of market maker services paid for by the listed companies themselves. We investigate why firms are willing to pay a cost to improve the secondary market liquidity of their shares. We show that a contributing factor in this decision

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-27555886137452966022011-11-22T12:39:00.000-05:002011-11-22T12:39:57.739-05:00

How to Lose Money Investing in Bonds - Yahoo! Finance:" Maturity dates and durations are other good tools for assessing the impact rising interest rates will have on the value of your bonds. A bond's maturity is the scheduled date when an issuer stops making interest payments and returns your principal. Duration is a measure of how sensitive a bond's price is to changes in interest rates. It

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-57427183626244002402011-11-22T02:08:00.000-05:002011-11-22T02:08:29.601-05:00

           Image via WikipediaMadoff Associate Says Fraud Went Back to 1970s - NYTimes.com: Wow. Shocking how how long it has been going on. "Madoff’s multibillion-dollar Ponzi scheme stretched back at least to the early 1970s, when his employees used historical information on stocks to create false trades that could be placed on customer statements, a former trader revealed as he pleaded

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-69071737068839154452011-11-22T00:33:00.001-05:002011-11-22T00:34:22.097-05:00

Image via WikipediaRisk Aversion vs. Individualism: What Drives Risk Taking in Household Finance? by Wolfgang Breuer, Michael Riesener, Astrid Salzmann :: SSRN: "We ask why the prevalence of stockholding is so limited. We focus on individuals’ attitudes towards risk and identify relevant factors that affect the willingness to take financial risks. Our empirical evidence contradicts standard

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-70865328188355208102011-11-21T22:21:00.000-05:002011-11-21T22:21:14.077-05:00

An over reliance on short-term financing is at the root of the problems according to Emmanuel Derman but he cautions it is not exactly a repeat of Long Term Capital Management. My favorite line is that we should use models to predict what we should pay for an asset (i.e. intrinsic value) not for predicting what the market should be.  He is also very good talking about what Goldman's risk

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-5348079836570728032011-11-21T20:55:00.000-05:002011-11-21T20:55:28.437-05:00

The Neuroeconomics Revolution - Robert J. Shiller - Project Syndicatejust one short look-in:"Efforts to link neuroscience to economics have occurred mostly in just the last few years, and the growth of neuroeconomics is still in its early stages. But its nascence follows a pattern: revolutions in science tend to come from completely unexpected places. A field of science can turn barren if no

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-18078737210752135072011-11-18T14:06:00.000-05:002011-11-18T14:06:45.705-05:00

Crushing the Cost of Predicting the Future - NYTimes.com:Gee, I wish I knew how this one would turn out:" A company called Recorded Future looks at 100,000 Web pages an hour, scanning across 50,000 sources that include everything from Securities and Exchange Commission filings to Twitter comments. The idea is to look for statements about the future, like notice of an annual meeting or predictions

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-7454285121618828842011-11-18T02:59:00.000-05:002011-11-18T02:59:33.680-05:00

Charter jet passengers hit up for cash mid-flight - CNN.com:"Comtel Air passengers on a Tuesday flight from to Birmingham, England, from the Indian city of Amritsar were hit up for 130 pounds -- about $200 each -- during a layover in Vienna. They were allowed off the aircraft to take the money from teller machines, a process that took about seven hours. There were varying accounts of what the

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-72437886981563014702011-11-17T11:05:00.000-05:002011-11-17T11:05:16.144-05:00

Cultural Values, CEO Risk Aversion and Corporate Takeovers by Thorsten Lehnert, Bart Frijns, Aaron Gilbert, Alireza Tourani-Rad :: SSRN:Another in a growing list of papers that claim to show managers' biases influence firm decisions. In this paper the authors take a tack away from manager's individual characteristics and focus on where they are from:"... argue that managerial risk aversion at a

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-23134543932210916272011-11-17T00:59:00.001-05:002011-11-17T01:01:20.491-05:00

Voices: John Longo, On Behavorial Finance - Financial Adviser - WSJ: "There are two broad types of mistakes that investors make. The first is cognitive biases.... The second type of mistake is a behavioral bias, which is more insidious. A non-financial example of this is a smoker who knows that smoking is bad for his or her health but continues to smoke anyways because of the short-term pleasure

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-28875365749295989972011-11-15T10:28:00.000-05:002011-11-15T10:28:30.898-05:00

Can the Fed Talk the Hind Legs Off the Stock Market? by Louis Raes, Sylvester Eijffinger, Ronald Mahieu :: SSRN: They find that central bank "talk" acts somewhat as a counterbalance to prevailing market conditions. This effect is most pronounces where we think it would be: cash constrained, cyclical firms.From the abstract: "...central banks influence financial markets' expectations of its

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-33232721110450336992011-11-13T19:57:00.001-05:002011-12-14T01:30:40.894-05:00

Congress: Trading stock on inside information? - CBS News: "Schweizer: There are all sorts of forms of honest grafts that congressmen engage in that allow them to become very, very wealthy. So it's not illegal, but I think it's highly unethical, I think it's highly offensive, and wrong. Steve Kroft: What do you mean honest graft? Schweizer: For example insider trading on the stock market. If

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-43777432441884899222011-11-13T00:25:00.000-05:002011-11-13T00:25:55.378-05:00

Sisters of St. Francis, the Quiet Shareholder Activists - NYTimes.com:"Long before Occupy Wall Street, the Sisters of St. Francis were quietly staging an occupation of their own. In recent years, this Roman Catholic order of 540 or so nuns has become one of the most surprising groups of corporate activists around.The nuns have gone toe-to-toe with Kroger, the grocery store chain, over farm worker

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-29688650603234735462011-11-13T00:22:00.000-05:002011-11-13T00:22:47.595-05:00

When Markets Move in Sync - Finding the Downbeat - NYTimes.com: "Stocks have been moving largely in lock step with one another, and with many other assets as well. Especially when prices fall, this can be a source of great frustration. After all, when markets become more highly correlated, it not only makes diversifying a portfolio seem like a pointless exercise, it also reinforces the feeling

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-41756014397743612922011-11-12T07:21:00.000-05:002011-11-12T07:21:36.793-05:00

The Walking Debt - The Daily Show with Jon Stewart - 11/08/11 - Video Clip | Comedy Central The Daily Show With Jon StewartMon - Thurs 11p / 10cThe Walking Debtwww.thedailyshow.comDaily Show Full EpisodesPolitical Humor & Satire BlogThe Daily Show on Facebook

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-19752340883555937822011-11-10T17:21:00.001-05:002011-11-10T17:24:39.456-05:00

'Tis better to give than to receive?: " The researchers also found another interesting pattern of neural activity in the septal area. In addition to being a pleasure center, this region plays a role in threat- or stress-reduction by inhibiting other regions of the brain that process threats, such as the amygdala. Researchers found that the women who showed greater activity in the septal area

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-49260253502849066352011-11-10T10:57:00.000-05:002011-11-10T10:57:02.036-05:00

Penn State football scandal will cost school millions - Yahoo! Finance: "Their brand has been irrevocably tarnished," said Marc Ganis, head of SportsCorp Ltd., a sports marketing firm. "In a matter of days, they have plummeted from being perceived as the cleanest, most ethical brand in college sports to the lowest of the lows. Moral breaches of this magnitude are not easily forgotten or dismissed

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-27948594311646097702011-11-09T12:50:00.001-05:002011-11-09T12:51:04.540-05:00

Unemployment by Major – Some Degrees Pay and Some Leave You Paying: "...the common theme has been for years – and probably will continue to be the following: The majors that are HARD, have a focus on MATH and PROBLEM SOLVING will continue to be the ones in high demand and at least have pretty good pay. ... So, longer term, Finance/Accounting has continued to be where it’s at on the East Coast"

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-2708725358328357392011-11-08T13:12:00.000-05:002011-11-08T13:12:10.417-05:00

Wall St. Pay Expected to Fall 20% to 30% - NYTimes.com:A large part of me wants to say that this has been a long time coming and unlikely to be the end.Wall Street bonuses are set to fall by an average of 20 to 30 percent this year from a year ago, according to a closely watched compensation survey. It would be the weakest bonus season since the financial crisis and a reflection of the leaner

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-90771886916466574722011-11-05T02:33:00.000-04:002011-11-05T02:33:11.082-04:00

Sex Matters: Gender and Prejudice in the Mutual Fund Industry by Stefan Ruenzi, Alexandra Niessen-Ruenzi :: SSRN:I dislike this. Short version: because of a stereotype that females are not as good of investors (even with quite a bit of empirical evidence which suggests they are AT LEAST as good as males and often better), investors penalize female money managers. From the paper:"Our starting

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-51404450876618835482011-11-05T01:34:00.000-04:002011-11-05T01:34:56.513-04:00

New Dogs New Tricks: CEO Turnover, CEO-Related Factors, and Innovation Performance by Frederick Bereskin, Po-Hsuan Hsu :: SSRN:"We find that CEO turnover is associated with significantly greater quantity and quality of future innovation, measured with the number of patents, citations, patents per research and development dollar, and citations per patent in the subsequent three year and five-year

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-14388379342369552532011-11-04T14:24:00.000-04:002011-11-04T14:24:45.734-04:00

Market Volatility Aplenty, and a Change May Be Afoot - NYTimes.cominteresting article..."S.& P. 500 over a 13-week period to the total of daily moves. The index closed at 1,260.34 on Aug. 3 and was at 1,237.90 on Wednesday of this week, for a net decline of 22.44 points, or 1.8 percent. But during that period, the total move of the index was more than 1,392 points, as it rose more than

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-81108885718231862162011-11-03T02:46:00.001-04:002011-11-03T02:47:32.361-04:00

RSA Animate - Drive: The surprising truth about what motivates us - YouTube: This lively RSAnimate, adapted from Dan Pink's talk at the RSA, illustrates the hidden truths behind what really motivates us at home and in the workplace.

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com1tag:blogger.com,1999:blog-7332340.post-45467536230413682032011-11-02T13:26:00.001-04:002011-11-02T13:27:22.476-04:00

Wall Street Isn't Winning It's Cheating | Matt Taibbi | Rolling Stone I am not a huge Matt Taibbi fan usually, but he has one of the better takes I have seen on the Occupy Movement in which he points out that while envy may play a role, it is not the only thing going on here. More importantly many Americans are fed up with what they see as a slanted playing field. a few look-ins: "Success is

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com2tag:blogger.com,1999:blog-7332340.post-32690156806624934142011-11-02T12:01:00.001-04:002011-11-02T12:01:42.370-04:00

Paul Zak: Trust, morality -- and oxytocin | Video on TED.com Maybe we should forget "shovel ready projects" and just up everyone's Oxytocin. More oxytocin =more trust = better economy? Maybe.

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-40404429282202365822011-11-01T17:18:00.000-04:002011-11-01T17:18:14.397-04:00

MF Global Acknowledged Diverting Customer Funds - WSJ.comYikes...this keeps getting worse:From the Wall Street Journal:"BY VICTORIA MCGRANE AND JAMILA TRINDLE MF Global Holdings Ltd. admitted to federal regulators that money had been diverted out of customer accounts, according to a federal official who said the move violated the law....Regulators

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-42541396163475970192011-11-01T02:13:00.000-04:002011-11-01T02:13:14.952-04:00

Say What? In 30-Year Race, Bonds Beat Stocks - Bloomberg:" Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500, said Jim Bianco, president of Bianco Research in Chicago. ....Stocks had risen more than bonds over every 30-year period from 1861, according to Jeremy Siegel, a finance professor at the

FinanceProfessorhttp://www.blogger.com/profile/05948754590238007311noreply@blogger.com0tag:blogger.com,1999:blog-7332340.post-82366830387092558642011-11-01T00:45:00.000-04:002011-11-01T00:45:21.338-04:00

MF Exposes Risk Volcker Wants to Curb - Bloomberg:"Nineteen months after former New Jersey Governor Corzine became chairman and chief executive officer, MF Global Holdings Ltd. (MF) yesterday filed for bankruptcy. Corzine’s decision to boost risk-taking, including a $6.3 billion wager with the firm’s own money on European government debt, triggered the collapse."It seems like another case of high

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Credit Rating Companies Favoring Borrowers Paying Most - Businessweek:Not surprising, but not good."Credit-rating companies routinely award higher rankings to debt issued by banks and corporations that pay them the most, a conflict of interest that may escape Congressional efforts to change the way they do business.Bonds from countries and cities that pay about half as much as issuers of less

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Image via WikipediaNobel laureate Daniel Kahneman writing for Bloomberg: Kahneman: Bias, Blindness and How We Truly Think - Bloomberg: The evidence suggests that an optimistic bias plays a role -- sometimes the dominant role -- whenever people or institutions voluntarily take on significant risks. More often than not, risk-takers underestimate the odds they face and, because they misread the

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Treasury Eyes Floating Notes as First New Debt Since TIPS - Bloomberg:"A floating-rate note whose coupon is reset at a rate that matches that of the six-month Treasury bill twice a year “would be a ‘convenient’ product” for which “demand will likely increase if rates are expected to rise,” TBAC wrote in its February presentation to the Treasury."and later some more details:"The notes “would very

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Back from the FMA conference in Denver.  I hope to have short recaps of many of the papers I saw there.  It was a good conference and I learned a great deal. I feel bad about the paucity of posts in recent months.  I need to both get remotivated as well as to find a few more hours in the day.  I will say that I will try to be better.  :)  here is the program for the FMA conference. 

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Image via Wikipedia The Real Lessons of Moneyball - Businessweek: They absolutely nail why sports examples are do great for class: "...baseball possesses two characteristics that in business exist only in the abstract: a level playing field (except for the pitcher’s mound) and truly reliable performance metrics. As a result, cause and effect are clearer. You can isolate successful behaviors

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Dropbox: The Inside Story Of Tech's Hottest Startup - Forbes: "Dropbox’s ascent has been just as stunning. The 50-million-user figure is up threefold from a year ago, and it has solved the “freemium” riddle, with revenue on track to hit $240 million in 2011 despite the fact that 96% of those users pay nothing. With only 70 staffers, mostly engineers, Dropbox grosses nearly three times more per

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Nassim Taleb on Wall Street Protest, Banking - Video - Bloomberg: While he is talking about Occupy Wall Street, he focuses mainly about the asymmetry of returns when taxpayers bailed banks out, but bankers have since received large bonuses. Short version: if you ever get a bailout, you are paid as a utility. Bankers get special treatment and he is not sure. " Oct. 18 (Bloomberg) -- Nassim

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Sovereign debt downgrades were a hot topic this week in our SIMM (student run portfolio) class, so this one should be no surprise to those in the class: S&P cuts Spain’s sovereign debt rating - FT.com:Three points from the article:* "S&P lowered the Spanish rating by one notch from double A to double A minus, its fourth highest investment grade level, bringing it in line with Fitch which cut its

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