Interested in Islamic Finance? Interested in going to Australia?

This sounds like quite the opportunity for some of you!Afshan Mantoo is organizing a conference in Melbourne Australia on Islamic Finance. And the best part? Some expenses may be paid for qualified participants! What could be better? A finance conference in Australia that is partially paid!She is looking for those interested in participating. Obviously you must be qualified to speak on

Refund-anticipation loans still a lousy deal--from Houston Chronicle

Personal finance tip: don't use refund-anticipation loans!
HoustonChronicle.com - Refund-anticipation loans still a lousy deal: "A refund-anticipation loan is a bank loan, short-term borrowing based on the amount you expect from your federal tax refund. It is also a popular marketing tool for the big tax-preparation companies, appealing especially to people living from paycheck to paycheck....

HoustonChronicle.com - If you haven't been saving for retirement, start now

An interesting (non technical) article that reminds people while earlier is better, late is better than never! Start now! HoustonChronicle.com - If you haven't been saving for retirement, start now

"Financial adviser David Bach also advocates that people try to break up the big task of saving for retirement into manageable portions.

Bach, author of the book Start Late, Finish Rich, says there

Muhammad Yunus, Banker to the World's Poorest Citizens, Makes His Case - Knowledge@Wharton

Muhammad Yunus, Banker to the World's Poorest Citizens, Makes His Case - Knowledge@Wharton
Sometimes finance need not be about millions of dollars. A perfect example is in microlending. Often by giving only a few hundred dollars of financing, microlenders can make a huge difference. Wharton and the Nightly Business Report provide fascinating interview with Muhammad Yunus, managing director of

BBC NEWS | Business | Leeson's legacy lives on in Singapore

It has been ten years since Nick Leeson brought down the Barings bank. TNow the BBC looks back at the events of 2005. VERY interesting! Watch the video :)
BBC NEWS | Business | Leeson's legacy lives on in Singapore

Why acting ethically is good business.

In my corporate finance classes I always make a point to stress that in the absence of large information asymmetries, acting ethically is generally also acting in shareholders' best long-run interests.Why? Because the market place is a hard disciplinarian and few people (customers, suppliers, or investors) want to do business with firms that are not acting ethically. Consider for a second, if

Competition, credit crunch push Winn-Dixie to Chapt. 11 - Food - Food & Beverages - Company Announcements

Competition, credit crunch push Winn-Dixie to Chapt. 11 - Food - Food & Beverages - Company Announcements

Given my background (my family owns a grocery store), it is always sad to see a grocery store declare bankruptcy. However at least the timing was good for my classes as we do capital structure and bankruptcy.

A few things to note from the article:

*Credit ratings do matter in the since

SSRN-Who Receives IPO Allocations? An Analysis of 'Regular' Investors by Ekkehart Boehmer, Raymond Fishe

SSRN-Who Receives IPO Allocations? An Analysis of 'Regular' Investors by Ekkehart Boehmer, Raymond FisheBoehmer and Fishe examine IPO participation. Consistent with previous literature, they find that there are regular (that is those who frequently participate) customers. These "regulars" are made up of both institutions and retail clients.These regulars do not get their favored status for free

SSRN-Municipal Bond Liquidity by Lawrence Harris, Michael Piwowar

SSRN-Municipal Bond Liquidity by Lawrence Harris, Michael Piwowar:Harris and Piwowar look at the liquidity of Municipal Bonds. Not surprisingly they find that the bonds are not as liquid as stocks and that transaction costs are MUCH higher.While much of this illiquidty may be a function of the market itself, at least some may be blamed on the issuers (and more importantly their investment bankers

Wall Street Bonus Babies (Gotham Gazette. January, 2005)

You know the stereotype: Work on Wall Street, get rich. The Gotham Gazette shows a differing view.The article points out that while average compensation is very high, this is skewed by a relative few who make a great deal. Using medians and quartile data from the 2000 Census, sociologist Andrew Beveridge shows that not everyone on Wall Street is rich. (Be forewarned, this is not a finance

SSRN expands database :)

There is research site that I use more than SSRN so I was glad to get the following from Michael Jensen:SSRN's Economic Research Network is pleased toannounce that theWorld Bank will now post their working papers in SSRN's Government & Public Agency Research Paper Series. This new series enables Government & Public Agencies to disseminate their research worldwide and to encourage the exchange of

SSRN-Disclosure Standards and Market Efficiency: Evidence from Analysts' Forecasts by Hui Tong

SSRN-Disclosure Standards and Market Efficiency: Evidence from Analysts' Forecasts by Hui Tong:Short version: increased transparency reduces need (and hence profitability) of analysts. Therefore following increased disclosure rules, the number of analysts falls. Overall the net effect of increased transparency rules is unclear.The author "examine[s] the effect of transparency by focusing on the

SSRN-Corporate Bond Market Transparency and Transaction Costs by Amy Edwards, Lawrence Harris, Michael Piwowar

SSRN-Corporate Bond Market Transparency and Transaction Costs by Amy Edwards, Lawrence Harris, Michael PiwowarYES! If you love it when theory is found to be true as much as I do, then Edwards, Harris, and Piwowar have given us a reason to celebrate! Not only do they show that transaction costs for corporate bonds are higher than for equities (a finding which helps explain the preference for

Private Retirement Accounts--by Jim Finnegan at FEN

Ever since the election we have been bombarded with largely emotional and in some cases purely idiotic comments on the proposed social security reforms. (indeed there have been some so bad that I could not even force myself to read them--I will not give you names but if you search the Buffalo News you may find the articles. Be forewarned, they are really really bad.I have pondered a reply. Indeed

BBC NEWS | Business | Japan economy slides to recession

BBC NEWS | Business | Japan economy slides to recession

In my portfolio class we were recently discussing international investing and the benefits of diversification. This led to a brief discussion of the Japanese stock market. Few markets and economies have ever had such a long downward ride: from near 39,000 at the end of 1989 to about 11,600 currently.

Thus, today's news that the Japanese

A follow up to yesterday's Sarbanes-Oxley piece

Everyone obviously did not agree with yesterday's piece from Financial Engineering Today that suggested that the (net) costs of Sarbanes-Oxley may have been overstated. I am sure we will see more about the actual costs in the coming years, but I will admit that the costs can be far reaching and come from seemingly unexpected areas (but so too can be the benefits!).

For now we can say that for

Sarbanes Oxley- SOX It To Them

This week's Financial Engineering Today newsletter has a great review and update on the Sarbanes-Oxley Corporate Responsibilty Act.
Sarbanes-Oxley- SOX It To Them

A few highlights:
**"The stated objective of the act was “to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.” In plain English, the point of the law is to make

Behind the Scenes at the FOMC: How the Federal Reserve Determines Monetary Policy

Want to see what the Fed does and how it does it? Fed Governor Susan Schmidt Bies gave a speech at the University of Tennessee Martin that gives us an very interesting look at the life as a Fed Governor and answers many of the questions you may have.

FRB: Speech, Bies--Behind the Scenes at the FOMC: How the Federal Reserve Determines Monetary Policy--February 7, 2005:

In her speech she "gives..

What happened to the people at Drexel? Tie to MLB

On the 15th anniversary of Drexel's demise The New York Times has an interesting article on what happened to those who worked there.

You may have kept tabs on Milken:

"Michael R. Milken, the firm's legendary junk-bond trader, was indicted on 98 charges, including racketeering. He later pleaded guilty to six felony counts, paid $600 million in fines and restitution and served two years in prison

Super Bowl Commercials

While I had posted this back in October, given the topic, it is worth re-running.

Paper is by Fehle, Tsyplakov, and Zdorovtsov

Short version: Super Bowl advertisers outperform the market by about a half a percentage point on Super Bowl Monday. This increase, which apparently is permanent, is concentrated in heavy advertisers and caused by buying activity by individual investors. This is

Greenspan on Adam Smith--February 6, 2005

Alan Greenspan gave a great tribute to Adam Smith! Fascinating!

FRB: Speech, Greenspan Adam Smith February 6, 2005 Some of the highlights:
"In the broad sweep of history, it is ideas that matter. Indeed, the world is ruled by little else. As John Maynard Keynes famously observed: "Practical men, who believe themselves to be quite exempt from intellectual influences, are usually the slaves of

The winner for best writer in the annual report category is .......

The winner for best writer in the annual report category is .......[Insert drumroll] Warren Buffett!!

While it may not have all of the excitement of the Grammys or the ESPYs, it is still quite the honor.

MSNBC - Billionaire Buffett gets an award for writing:

The National Commission on Writing for America’s Families, Schools, and Colleges is honoring Buffett for his "easy to undertand"

Ralcorp Holdings, Inc. Announces a Variable Forward Contract on Ralcorp Stock by Chairman William P. Stiritz

Ralcorp Holdings, Inc. Announces a Variable Forward Contract on Ralcorp Stock by Chairman William P. Stiritz

What do you do when you are an insider and want to diversify your holdings but not sell your shares and give investors a bad signal? One alternative is to enter a Variable Forward contract. That is what William P. Stiritz, Ralcorp's Chairman.
"The VFC transaction provides the ability to

SSRN-Taxes and Financing Decisions by Jonathan Lewellen, Katharina Lewellen

SSRN-Taxes and Financing Decisions by Jonathan Lewellen, Katharina Lewellen

Next week in class we begin capital structure, so I simply could not pass up this article by Lewellen and Lewellen on capital structure and taxes.

Short Version: The authors show that internal equity has tax advantages. Moreover, "The trade-off between debt, retained earnings, and external equity depends critically on

Enron transcripts show unethical behavior for years

Money & Business:
"Enron Corp. was running scams to drive up the cost of power years before the 2000-01 West Coast energy crisis, according to audio transcripts and documents unveiled Thursday by a public utility north of Seattle." "By November 1997, Enron apparently knew of loopholes in California's ill-advised deregulation plan, and by May 1998 - a month after the plan took effect - Enron was

Michael Brennan on stock market

There is an early front-runner for top story in the next newsletter! What a great interview!

Kim Snider interviewed Michael Brennan on how the internet bubble happend. The interview discusses the various changes that had come about leading up to the bubble, agency costs, unrealistic expectations, and lessons we can learn from the bubble.

Great stuff!!! and you can even listen to it!

Several short news items of note

Three interesting finance related stories:

1. HoustonChronicle.com: "Last week...the National Association of Securities Dealers'.... board of governors approved a change in arbitration procedures that will let investors involved in a dispute request an explanation of why their claim was tossed....Under the current rules, arbitrators aren't required to explain their decisions."

2. What causes

HoustonChronicle.com - Home equity used to finance Super Bowl trips

A home equity loan is when you use your house as collateral for your loan. This idea would be anathema for anyone who lived through the Great Depression. But now home equity loans are very common. So common in fact that some are even using them to pay for Super Bowl tickets:

HoustonChronicle.com - Home equity used to finance Super Bowl trips:
"Some Philadelphians are so desperate to get down to