NYSE continues to mop up from glitches

From BusinessWeek:NYSE continues to mop up from glitches: "The New York Stock Exchange on Wednesday continued its mop-up from the technical glitches that bottlenecked its trading system and triggered a temporary shutdown of electronic transactions during Tuesday's market plunge.The Big Board requested that specialist firms -- which match buyers and sellers -- keep their stock posts open after the

BBC NEWS | Business | Is Sainsbury's set to be taken over?

I love grocery stores and we just covered leasing in my Problems in Finance Class, so I couldn't pass this one up:BBC NEWS | Business | Is Sainsbury's set to be taken over?: "While it has not revealed any details of its proposed plans, retail analysts agree that the consortium has its eyes on the property value of the Sainsbury's stores, which are often located in city centres where commercial

Dow Jones Indexes sees glitch-free Dow calculation | Reuters

Dow Jones Indexes sees glitch-free Dow calculation | Reuters: "With an hour left to trade, the Dow Jones industrial average fell more than 500 points as it abruptly added about 200 points to its slide in late afternoon trade on Tuesday.According to Dow Jones Indexes, 'unusually heavy volume' caused a 70-minute lag in correctly calculating the value of the Dow and the subsequent downward spike in

What happens when the private equity buyout boom ends - Feb. 26, 2007

CNN has an interesting look at private equity's role in recent buyout boom. (The video is good introduction)What happens when the private equity buyout boom ends - Feb. 26, 2007: "Utility firm TXU Corp. (Charts) said Monday it agreed to be bought by Kohlberg Kravis Roberts, Texas Pacific Group and the private equity arm of Goldman Sachs (Charts) for $32 billion, or nearly $45 billion including

Shareholders in Japanese Steel Maker Block a Merger Deal - New York Times

Score one for investors!Shareholders in Japanese Steel Maker Block a Merger Deal - New York Times: "Shareholders of the Tokyo Kohtetsu Company blocked a takeover on Thursday by a rival steel producer, the Osaka Steel Company, the first time in Japan that shareholders have vetoed a merger approved by the companies’ boards.An investment fund, Ichigo Asset Management, started a rare proxy fight

A few interesting news stories

The Slow Pace of Justice on Options Backdating - New York Times: "A sweeping investigation into the backdating of stock options at more than 100 companies has so far led to relatively few enforcement actions or resolutions.Lawyers and executives at the companies under scrutiny have been waiting to see how investigations by the Securities and Exchange Commission, as well as those by United States

Father and CFO of His Country? - Finance - CFO.com

CFO.com has a fun article on George Washington.Father and CFO of His Country? - Finance - CFO.com: "Washington 'took great pride in maintaining clear, concise, and accurate [financial] records,' notes the Library of Congress's guide to the material. Indeed, at the end of the war, Washington used those expense accounts to request reimbursement from Congress for his total expenses of $160,074. That

SSRN-Migration by Eugene Fama, Kenneth French

WOW. I will have to do a longer review of this when I get time, BUT WOW--explanations of both size effect and value anomaly? SSRN-Migration by Eugene Fama, Kenneth French: " Abstract: "We study how migration of firms across size and value portfolios contributes to the size and value premiums in average stock returns. The size premium is almost entirely due to the small stocks that earn extreme

Zvi Bodie on insurance, retirement, and saving too much!

Saving for a rainy day is one thing, but insurance may be a much more efficient way. Listen to an interview with Zvi Bodie from PRI's Here and Now.Here and Now : 2/20/2007: "Professor Says Cut Back on Retirement Savings---Zvi Bodie, a professor of finance and economics at Boston University, says Americans are saving too much for retirement ."

Southern Finance Association

From Southern Finance Association:" Southern Finance Association 2007 Annual Meetings November 14 - 17, 2007 Charleston Place Hotel Charleston, SC The SFA paper submission deadline is only about two weeks away! Please go to the website and submit your papers along with volunteering for the Program Committee. After sessions are formed, you may also volunteer to discuss

Bloomberg.com: U.S.

Bloomberg.com: U.S.: "Sirius Satellite Radio Inc.'s agreement to buy rival XM Satellite Radio Holdings Inc. for $4.57 billion in stock is a bet that U.S. regulators will alter rules that bar the only two pay-radio companies from combining.Shares of XM may rise on the agreement, announced yesterday when U.S. markets were closed for a holiday. The terms value Washington-based XM at $17.02 a share,

Jury duty

How can it be that in the course of two weeks I get a ticket for supposedly using a cell phone when driving (I WAS NOT!!! I have no idea what the officer was talking about and my phone log shows I was not--the officer said I might have two cell phones? please search my car--but she would not) AND have jury duty. LOL....so I had to cancel day classes tomorrow. Stay tuned.

Chávez Threatens to Jail Price Control Violators - New York Times

This guy needs an economist in the worst way!!Chávez Threatens to Jail Price Control Violators - New York Times: "Faced with an accelerating inflation rate and shortages of basic foods like beef, chicken and milk, President Hugo Chávez has threatened to jail grocery store owners and nationalize their businesses if they violate the country’s expanding price controls.Food producers and economists

A Good Word for Hedge Fund Activism - New York Times

A Good Word for Hedge Fund Activism - New York Times: "...the evidence shows that for the most part, buy-and-hold investors ought to cheer when hedge funds jump aggressively into a stock, according to a new study. Titled “Hedge Fund Activism, Corporate Governance and Firm Performance,” it was written by Alon Brav, a finance professor at Duke; Wei Jiang, an associate professor of finance and

SSRN-How Do Shareholders Respond to Downsizing? A Meta-Analysis by Gunther Capelle-Blancard, Nicolas Couderc

May try to comment on this one in a bit, but a friend sent it to me and it is an interesting look at whether downsizing is bad or not. The authors find there to be a negative reaction to the news. Why? Most likely because it signals that conditions within the firm are not very good.SSRN-How Do Shareholders Respond to Downsizing? A Meta-Analysis by Gunther Capelle-Blancard, Nicolas Couderc: "..

A look at decision markets

Recently we talked about decision markets in class. Here is a NY Times article on the same:Odds Are, They’ll Know ’08 Winner - New York Times: "Over the last few years, Intrade — with headquarters in Dublin, where the gambling laws are loose — has become the biggest success story among a new crop of prediction markets. Another company, Newsfutures, helps the world's largest steel maker, Arcelor

Quick link round-up

Super fast look around at some blogs I have been following:FreeMoneyFinance comments on an article by Ben Stein that looks at the relative returns of real estate to stocks. Short version: stocks have done better historically than real estate but it is really hard to live in a stock. "There are long periods when the stock market doesn't make you much money.The S&P is still lower than it was seven

IPOs following going private transactions

First some background: As private equity has grown in importance, there have been many more deals where publicly traded firms are bought out and taken private (so their shares no longer trade publicly). Then after a while, the the firms are often resold to the public. The following NY Times article deals with whether or not investors should be buying when this "smart money" is selling.Should You

Fortress' IPO

In a "must talk about case" for all of my classes, Fortress went public today.Who is Fortress? From Marketwatch: "Fortress Investment Group -- not a hedge fund -- but a nine-year-old company that runs hedge funds."First the facts:From Business Week: Investors Storm Fortress IPO:"In the most widely anticipated public offering of the young year, FortressInvestment Group (FIG), the first U.S.-based

Investment Ethics: Course explores dollars, decency

Marquette has started an Investment Ethics course. The Milwaukee Journal Sentinel covered reported on the class yesterday.JS Online: Course explores dollars, decency: "'Ethics in finance is a trifle specialized, especially at the undergraduate level,' says John Boatright, a professor of business ethics at Loyola University in Chicago and author of the text 'Ethics in Finance.' 'At the

Still more on pay gaps

More on the pay gap from NPRShort version: while the pay gap gets much bad publicity, it is not entirely bad. The gap helps create incentives to work harder and get more education. Moreover, the gap is not some conspiracy, but rather brought about by some of the same forces (technology being paramount) that we see at work in large chain retail stores (the CEO of a large chain will get much more

www.exduco.net - Graduate schools and programs guide

I knew the NYSE was closed in 1914 for WWI but never knew any of the story behind it. So on the chance that you did not know it either: www.exduco.net - Graduate schools and programs guide: "William L. Silber, Marcus Nadler Professor of Finance and Economics at NYU Stern, who earlier served as a senior economist with the President’s Council of Economic Advisors and as a member of the Economic

More on "pay Gaps"

Wow, pay gaps are a hot topic all of a sudden! Today Fed Chairman Ben Bernanke gave a speech on the issue. The text of the speech is here.Some Look-is:* "Although we Americans strive to provide equality of economic opportunity, we do not guarantee equality of economic outcomes, nor should we. Indeed, without the possibility of unequal outcomes tied to differences in effort and skill, the

Shriekers seek 'Idol' acclaim - USATODAY.com

Ok, so the American Idol appears to have zero to do with finance (so much so I have NEVER watched a single episode, but I stumbled upon this in USATODAY and it does have a tie to behavioral finance--specifically some of the singers seem to have the same overconfidence that can negatively impact investors who trade frequently. Shriekers seek 'Idol' acclaim - USATODAY.com: "many singers don't know

JOKE!!! THIS IS A JOKE!

Hilarious...in the spirit of the Onion.comThe Tuck Profit: "After 15 years of sharing the credit for groundbreaking research with Ken French, Eugene Fama is on a mission to expose his former colleague, and himself. The result is an alarming behind-the-scenes look at how academic careers are made and broken."HT FinancialRounds for this one!

Home Depot Proxy Fight Is Settled - New York Times

Home Depot Proxy Fight Is Settled - New York Times: "Home Depot...reached an agreement...with a large shareholder, Relational Investors, that will prevent a proxy fight over the company’s strategy.In return, the shareholder, Relational, a San Diego investment fund, will receive a seat on the company’s board and four directors involved in hiring Robert L. Nardelli, the recently dismissed chief

S.E.C. Is Looking at Stock Trading - New York Times

S.E.C. Is Looking at Stock Trading - New York Times: "The Securities and Exchange Commission has begun a broad examination into whether Wall Street bank employees are leaking information about big trades to favored clients, like hedge funds, in an effort to curry favor with those clients, executives at Wall Street banks said.The inquiry, these people said, seems aimed at determining how pervasive

A look around at a few weekend news items

For those of you so caught up in the Super Bowl you missed reading the Business pages this weekend, here are a few highlights:Earnings-based strategy has high risk factor | Chicago Tribune: "A study by University of Illinois finance professor Allen Poteshman for the 10 years through May 2000 showed that there's a particular danger in holding growth stocks during the three-day period around an

Article on what not to do when investing

Sometimes knowing what NOT to do shows us what to do. That is the case of Dowling and Lucey's paper entitled The 7 Deadly Sins of Investors. (FTR the target audience is Irish Investors, but their stories and advice are largely universal.A few quick look-ins:"In March 1999, an internet company called AppNet Systems....stated that the company would soon float on the stock market. ...investors ...

Kraft carveout and spin-off

This is a great one for class! Not only does the article discuss the carve-out and spin-off, but the SF Chronicle piece talks about valuation (including EBITDA multiples!), multiple classes of shares, and socially responsible investing.Definitionscarve-out: IPO of a part of company (In this case this happened in 2001, when Kraft began trading publicly. Altria (the parent who some still call

Bloomberg.com: Exclusive

Bloomberg.com: Exclusive: "[The hedge fund managers] hunt for market variables called risk factors that often lead to excess investment returns, or premiums, according to people familiar with the fund.Some, such as a measure called the value premium -- the difference between the return of a group of stocks with high book values relative to their prices and that of a group with low book