A look around and updates on several topics

A relatively quick look around at quite a few topics:BusinessWeek has an interesting article that touches on Front Running, Proprietary Trading, and regulation. A look-in:" In most cases, however, front-running is vexingly hard to prove. "It's a gray world," says New York University professor Lawrence J. White. "But cooperating to protect high prices and fees is where regulators and plaintiffs

More on Bear, Regulation, and transparency

Mark Gilbert writing for Bloomberg has a well done piece on the implications of the hedge fund problems at Bear Stearns.Bloomberg.com: Opinion:Two lookins:"The most stunning aspect of the demise of two hedge funds belonging to Bear Stearns Cos. is the almost total absence of transparency surrounding the bailout. The debacle may finally provoke regulators, who have long suspected

Going to jail for a while..

Since it now seems that the Rigases will actually serve jail time for their roles in the Adelphia scandal, I thought it would be a good time to mention a very cool paper by Karpoff, Lee, and Martin that is forthcoming in the Journal of Financial Economics on what happens to managers who “cook the books”. Short version? They burn. Longer version: Karpoff, Lee, and Martin look at over 2000

Bear Stearns taps managers to save hedge fund - Yahoo! News

Updates:Bear Stearns taps managers to save hedge fund - Yahoo! News: "Bear Stearns Cos. Inc. said on Tuesday it does not plan to bail out the High-Grade Structured Credit Strategies Enhanced Leverage Fund, the second of two struggling hedge funds.Instead it will provide $1.6 billion of financing to save its High-Grade Structured Credit Strategies Fund. Days earlier the bank had said it would

Humor from the Onion

I have not been able to verify this, but if The Onion is reporting it, it has to be true ;)Greenspan Comes Out Of Retirement For One More Interest Rate HikeWASHINGTON, DC—Confirming a rumor that first appeared in March on the FDIC Fan Forum message board, former Federal Reserve chairman Alan....onion_embed {background: rgb(256, 256, 256) !important;border: 4px solid rgb(65, 160, 65);border-width:

Management in Europe | Pay slips | Economist.com

Management in Europe | Pay slips | Economist.comNice article on CEO pay from the Economist. The nutshell:"The secret to sensible pay is transparency and a shareholder vote, along with all the negotiation that surrounds it....Ideally, the debate over executive pay will shift from the purely moral plane to the pragmatic one, where it really belongs. Investors and workers want their companies to

Call for papers

NABET: "The Northeastern Association of Business, Economics and Technology invites papers for presentation at its Annual Meeting to be held on October 25th and 26th at the Days Inn, State College, PA."Hey it is State College! :)

Senate Report on Amaranth Advisors

Given the news of Bear Stearns' hedge fund troubles, it is ironically coincidentally that the Senate's report on the collapse of Amaranth Advisors was released today.A look around at some of the reporting:From NY Times' Dealbook:"After a nine-month investigation, a bipartisan Senate subcommittee is expected to issue a report Monday detailing how a single hedge fund, Amaranth Advisors , dominated

Look who is in the news--Myron Scholes

Bloomberg.com: Japan: "Myron Scholes, who won a Nobel prize for developing the model used to value options, is seeking a license to advise Japanese pension funds after opening an office in the country.``We have an application in to Japanese regulators for a discretionary fund management license to enable us to allocate pension fund money in our fund or other alternative investments,'' Scholes, 65

Bear lends $3.2b to its troubled hedge fund

In what will no doubt be talked about in finance classes for years to come, the big news story today is that Bear Stearns has agreed to lend $3.2 Billion (about 25% (I did not verify this reported number) of its overall capital) to one of its troubled hedge funds.First the reports:Bear Stearns to Bail Out Troubled Fund - New York Times: "Bear Stearns, the investment bank, said today that it would

Cadbury expects to sell U.S. beverages unit, plans 7,500 job cuts - MarketWatch

Not sure what to teach? Looking for a good (free case study)? Here you go. This would make a GREAT classroom discussion for a corporate finance class.Cadbury expects to sell U.S. beverages unit, plans 7,500 job cuts - MarketWatch: "Cadbury Schweppes said Tuesday that it sees a sale of its U.S. beverage unit, rather than a demerger, as the most likely option as the world's biggest confectioner

CEO's words haunt Whole Foods deal

TheDeal.com - CEO's words haunt Whole Foods deal: "Court documents released Tuesday, June 19, capture Whole Foods Market Inc.'s CEO John Mackey urging his board to snap up rival Wild Oats Markets Inc. to eliminate any threat from a rival natural foods company.... The FTC's complaint states that 'Mackey bluntly advised his board of directors of the purpose of this acquisition: 'By buying [Wild

SSRN-Earnings Forecast Performance and Financial Analyst Turnover During Mergers by Joanna Wu, Amy Zang

SSRN-Earnings Forecast Performance and Financial Analyst Turnover During Mergers by Joanna Wu, Amy Zang:Super short version: Following mergers, turnover is likely to be a non-linear function of job performance. Specifically, following mergers both poor and good performers are more likely to leave.Longer version: Wu and Zang examine analyst turnover and"...document a U-shaped relation between

Not stictly finance, but I will bend the rules for such a good cause!

Roswell Park Alliance Foundation:Ok, so it is not a hurricane or tornado, but more people die from cancer than all the hurricanes and tornadoes combined! We can help make a small dent in this by helping the Cancer society. Money will be used to find a cure and to help those with cancer.Here's the deal: I will ride 100k (62+ miles) if you donate!It is this week however, so do it now. Donate

CEOs' worth increases even when poor acquisitions are made

CEOs' worth increases even when poor acquisitions are made: "Following an acquisition of another company, chief executive officers' compensation levels usually increase, even when the purchase turns out to be unprofitable, according to researchers at the University of Washington and University of British Columbia. That's because while a bad merger can decrease the value of a company's stock and

Dinosaurs are alive, on Wall Street - MarketWatch

After the 1980s everyone thought conglomerates (like dinosaurs) were dead. But as David Weidner points out, today's private equity firms are essentially conglomerates.Dinosaurs are alive, on Wall Street - MarketWatch: "Private equity companies are ...buying into every industry, including those where they have little or no experience in managing. TA Associates began a technology focused firm, ...

Back to blogging!

Ok, I needed a break! lol...took a few days off (much riding and running) and am now getting back to finance :)So a few news stories of note:1. Yahoo has been under criticism for executive pay. About a third of shareholders refused to vote for all of management's board recommendations. (Stay tuned, this one may not be done.)2. If you ever get thinking that people (including managers) are not

Benefiting from Irrational Investors — HBS Working Knowledge

Behavioral Finance—Benefiting from Irrational Investors — HBS Working Knowledge:Quoting Malcom Baker of Harvard: "'At the foundation of finance is the idea that investors and managers act rationally, so that capital market prices reflect fundamentals and managers respond to incentives in predictable ways,'...But investors don't act like computers in financial models. Behavioral finance replaces

Big or small? Which is better?

Do you live in an area where politicians fight to attract new large firms to the area? Or have you read that small firms have been the main job creators over the past few decades?If you said yes to either, then you should read The Role of Small and Large Business in Economic Development by Kelly Edmiston of the KC Fed. A few look-ins:* " The attribution of the bulk of new job creation to small

FTC to try to block grocer's acquisition

FTC to try to block grocer's acquisition: "Natural foods grocer Wild Oats Market Inc. said Tuesday that federal regulators will file a lawsuit to prevent its acquisition by competitor Whole Foods Market Inc...Whole Foods has said the FTC is considering trying to prevent the sale from being completed over concerns over anticompetitive effects."That is sort of surprising to me. First of all it is

Few fast posts

I never seem to have enough time in the day but didn't want people to think I dropped off teh face of the earth! So here are a few note worthy posts of recent days:Science Daily reports an interesting finding:"...according to a new study in this month's Journal of Personality and Social Psychology, published by the American Psychological Association (APA), repeated exposure to one person's