S&P cuts Berkshire Hahaway's rating, but barely.

S&P cuts Berkshire Hathaway rating by one notch to 'AA' - Yahoo! Finance:

"The lower credit rating on BRK better reflects our view of BRK's dependence on its core insurance operations for most of its dividend income," said Standard &Poor's credit analyst John Iten."

How to bond rating agencies work? Here are a few good links:

From Wikipedia:  (they have really cool tables showing defaults by rating_

A straight forward primer:  
http://www.investinginbonds.eu/Pages/LearnAboutBonds.aspx?id=6186

and a slightly more academic version here is from  JF piece:
http://onlinelibrary.wiley.com/doi/10.1111/0022-1082.00311/abstract

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SEC Speech: Harnessing Tomorrow’s Technology for Today’s Investors and Markets, by Chairman Elisse Walter, on February 19, 2013

High Frequency trading has been in the news (and in class) quite a bit lately.  While high frequency trading seems to have peaked, it is still in the news (For example Warren Buffett sort of talked about it, regulators in the US and Germany are looking into it).   So a short "lesson"

So from Wikipedia:

"High-frequency trading (HFT) is the use of sophisticated technological tools and computer algorithms to trade securities on a rapid basis.^[1][2][3]
HFT usually uses proprietary trading strategies that are carried out by computers. Unlike regular investing, an investment position in HFT may be held for only seconds, or fractions of a second (though sometimes it may extend to longer), with the computer trading in and out of positions thousands or tens of thousands of times a day.[4"

An interesting 60-Minute piece:




Recently SEC Chairman Elisse Walter discussed this and the SEC's moves in the area:

SEC Speech: Harnessing Tomorrow’s Technology for Today’s Investors and Markets, by Chairman Elisse Walter, on February 19, 2013:

"...last year, the SEC put in motion two initiatives that will dramatically increase the quality and quantity of the data we receive and improve our understanding of the way today’s markets function. ...MIDAS stands for Market Information Data Analytics System. It captures all orders posted on the national exchanges, all modification and cancellation of those orders, all trade execution of those orders, and all off-exchange executions....

It can help us monitor and understand mini-flash crashes, or pick up on possibly troublesome or illegal behavior, for example, by noting excessive cancellations of message traffic. But what’s critical in the context of long-term investor protection is that it will give us dramatically better insight into the function of a market that moves many millions of dollars in millionths of a second. It will be like the first time scientists used high-speed photography and strobe lighting to see how a hummingbird’s wings actually move. This information has the capacity to give regulators — as well as academics and other stakeholders — unprecedented insight into the way markets work today"

Related articles

• Why High Frequency Trading is Not a Problem
• FBI And SEC Team Up To Take Down HFT
• Research Library: High-Frequency Trading and the Execution Costs of Institutional Investors (pdf)
• UPDATE 1-US state regulators want high-frequency trading probe
• Mexican Exchange to HFT: Bring Us Your Business

Heinz CEO Johnson Would Get $200 Million in Post-Berkshire Exit - Yahoo! Finance

Heinz CEO Johnson Would Get $200 Million in Post-Berkshire Exit - Yahoo! Finance:

"H.J. Heinz Co. (HNZ) Chief Executive Officer Bill Johnson could receive more than $200 million should he exit after Warren Buffett's Berkshire Hathaway Inc. (BRK/A) and Jorge Paulo Lemann's 3G Capital Inc. buy the ketchup maker.

Johnson, 64, would get "Golden Parachute Compensation" including $56 million in cash, equity, bonuses and other benefits, the Pittsburgh-based company said in a regulatory filing. Other shares under Johnson's control are worth almost $100 million, while his vested deferred compensation account totals $57 million."

Related articles

• Heinz CEO entitled to $56 million golden parachute
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SEC sues over Heinz option trading before buyout - Yahoo! Finance

SEC sues over Heinz option trading before buyout - Yahoo! Finance:

"The suit, in federal court in Manhattan, cites "highly suspicious trading" in Heinz call options just prior to the February 14 announcement of the deal. The regulator has frequently in past filed suit against unnamed individuals where it has evidence of wrongdoing, but is still trying to uncover the identities of those involved.

That trading, the suit said, caused the price of the particular call option they bought to soar 1,700 percent and generated unrealized profits of more than $1.7 million."


Interestingly, the event study using yahoo data (which I think does not look at afterhour trading) on the stock looks "clean" with two right angles: