New newsletter worth reading!

A friend of mine (Steve Horan) is working on this. Figured it was worth sending out to everyone. Private Wealth - March 2008: "Welcome to the inaugural issue of the Private Wealth Management Newsletter, created to serve the needs of the growing number of our members who are serving private clients."My favorite article in this first issue is : "The Emerging New Model for Wealth Management

Aftershocks at Bear Stearns

Aftershocks at Bear Stearns: "In a week it was all gone: Bear Stearns' (BSC) reputation, culture, identity; the savings of many of its 14,000 employees; and possibly their jobs, too. 'The speed of the collapse was traumatic,' says one banker who has worked at Bear for a decade. 'People aren't jumping out of windows,' he says. 'But we are all kind of anxious.'A year ago Bear Stearns was worth

SSRN-Technical Trading Revisited: Persistence Tests, Transaction Costs, and False Discoveries by Pierre Bajgrowicz, Olivier Scaillet

Does technical analysis work or not? Technical Trading Revisited: Persistence Tests, Transaction Costs, and False Discoveries by Pierre Bajgrowicz, Olivier Scaillet:While the topic has been widely studied (indeed it has many times been tossed aside and scorned by academics), there are just enough papers that finds it works (see Lo, Mamaysky and Wang (2000)) that when coupled with the continual

Justice Dept. Approves XM Merger With Sirius - New York Times

Whatever happened to ____? You know those stories that just seem to drag on and on and on....this may take the cake. The XM Sirius Merger is once again back in the news for the third straight semester!Justice Dept. Approves XM Merger With Sirius - New York Times: ""The Justice Department gave approval...to the merger of two rival radio networks, XM and Sirius, a marriage that would create a de

The Incentive to 'Bet the Farm': CEO Compensation and Major Investments by Gavin Smith, Peter Swan

In prepping for my MBA 610 (Corporate Finance) class where we examine executive pay and how it impacts agency costs, I found this article by Gavin Smith and Peter Swan.SSRN-The Incentive to 'Bet the Farm': CEO Compensation and Major Investments:Swim and Swan look at firms that do major investments and those that do not. They find that the way the CEO is paid does influence the investment

Catching up-Newletter style

Catching up.There is just not enough time in the day to do all I want to do. So given that it is break (we go back tomorrow) I will try to clear a few of the articles I wanted to mention as well as give you some book ideas and some random thoughts that I wanted to put out there as well. * NCAA March Madness is a learning/teaching opportunity to discuss the relative effectiveness of stock

American Stock Exchange and Delta Hedging

If you have ever taken a derivatives class (or even in some upper level corporate or investment classes) you probably are familiar with the "Greeks" and in particular Delta which is the change in value given a small change in the underlying asset price.Interestingly, the American Stock Exchange now wants to allow Delta Hedging to be used more freely in offsetting option risks. Self-Regulatory

JP Morgan and Bear to have a new price???

From the NY Times:"The sweetened offer is intended to win over stockholders who vowed to fight the original fire-sale deal, struck only a week ago at the behest of the Federal Reserve and Treasury Department.Under the terms being discussed, JPMorgan would pay $10 a share in stock for Bear, up from the initial offer of $2...."From CNN/Money:" Under the revised terms, JPMorgan will buy 95 million

Bank of New York's Michael Woolfolk Discusses The Dollar - Features and Interviews - HardAssetsInvestor.com

Bank of New York's Michael Woolfolk Discusses The Dollar - Features and Interviews - HardAssetsInvestor.com: "Michael Woolfolk, senior currency strategist for The Bank of New York Mellon, examines the forces pushing the dollar lower....Woolfolk: I think that it is primarily an interest rate story, but we can’t be that simplistic about it. It’s also a growth rate story....We’re going to be seeing

Wall Street takes advantage of emergency Fed lending program - Mar. 20, 2008

Interesting story from CNN/MoneyWall Street takes advantage of emergency Fed lending program - Mar. 20, 2008: "...Wall Street investment companies are taking advantage of the Federal Reserve's unprecedented offer to secure emergency loans, the central bank reported Thursday....Those large firms averaged $13.4 billion in daily borrowing over the past week from the new lending facility....This

MBAs bearish on Bear job offers - Mar. 21, 2008

I know at least one of my students is a tad concerned ;)MBAs bearish on Bear job offers - Mar. 21, 2008: "Bear Stearns' meltdown and pending sale to JPMorgan Chase has left dozens of aspiring Masters of the Universe in the lurch. The recruiting season for investment banking positions - both full time and internships - ended months ago, back when Bear's stock traded for quite a bit more than the

Can’t Grasp Credit Crisis? Join the Club - New York Times

Can’t Grasp Credit Crisis? Join the Club - New York Times: "It has been going on for seven months now, and many people probably feel as if they should understand it. But they don’t, not really....I’m here to urge you not to feel sheepish. This may not be entirely comforting, but your confusion is shared by many people who are in the middle of the crisis.“We’re exposing parts of the capital

Why is Bear selling for more than the offer price?

Several people have asked why Bear is selling at so much over the JP Morgan offer price. I guess this is the best explanation I have seen.Short version: Creditors want to assure the deal is approved, so they are buying shares in order to vote them.Hedging the Bear Stearns Deal - Mergers, Acquisitions, Venture Capital, Hedge Funds -- DealBook - New York Times: "The creditor buys Bear shares and

SEC's Bear Stearns Probe Zeroes In on 'Put' Trades - WSJ.com

SEC's Bear Stearns Probe Zeroes In on 'Put' Trades - WSJ.com: "The Securities and Exchange Commission is investigating the events leading up to the collapse of Bear Stearns Cos., specifically a surge in options contracts betting that the investment bank's share price would drop precipitously, according to people familiar with the matter.... The unusual trading in Bear's options began as early as

More news on Jim Cramer

I have never been a big fan of him (my thought has always been is that he is really smart and a great marketer), but this probably has gone too far. Does anyone really believe he didn't say "sell" last week because he was afraid to cause a run on the bank? Mmm...maybe...better to 'fess' up and admit your mistake. This is not your finest hour.But anyways, here is his response after Bear had

Visa's IPO

You probably have seen the headlines that Visa went public in largest IPO ever. Here are two interesting looks at itFrom the San Francisco Chronicle--Visa draws high card: "Visa's underwriters got commitments from buyers to take 406 million shares at $44 per share, raising $17.9 billion, by far the largest IPO ever carried out in the United States."The NY Times looks at how much Investment

John Stewart on Bear and Financial Problems

Forget the politics, just enjoy. And no matter what you do, watch the section on Cramer at about 5 minutes in...it is hilarious!! LOL...Video one:Video two (on Bear)

Yahoo pushing for higher price?

Bloomberg.com: Worldwide: "Yahoo! Inc., owner of the most- visited U.S. Web site, said sales will climb at least 19 percent in each of the next two years, justifying its refusal of a $44.6 billion takeover offer from Microsoft Corp.The stock climbed the most since Microsoft's $31-a-share bid on Feb. 1 after Yahoo said sales growth goals for 2009 and 2010 are higher than analysts estimate. That

CME to buy Nymex for $100-share, or $9.3 billion - MarketWatch

From CNN/Money:"CME Group Inc. agreed to buy Nymex Holdings Inc. for about $9.5 billion in cash and stock Monday. The deal is worth just over $100 per Nymex share, and will combine the operators of the Chicago and New York futures exchanges.CME also operates the Chicago Board of Trade"CME to buy Nymex for $100-share, or $9.3 billion - MarketWatch: "Both companies' boards have approved the terms.

Eliot Spitzer and the Price-Placebo Effect - washingtonpost.com

Really, this has finance implications.Shankar Vedantam - Eliot Spitzer and the Price-Placebo Effect - washingtonpost.com: "Spitzer's poor moral, political and legal judgment is beyond question, but on the delicate question of whether Kristen was 'worth it,' a host of unusual studies suggest the governor probably got his money's worth. The question, as it turns out, has little to do with either

JP Morgan Pays $2 a Share for Bear Stearns - New York Times

JP Morgan Pays $2 a Share for Bear Stearns - New York Times: "In a shocking deal reached on Sunday to save Bear Stearns, JPMorgan Chase agreed to pay a mere $2 a share to buy all of Bear — less than one-tenth the firm’s market price on Friday....JPMorgan is buying Bear, which has 14,000 employees, for a third the price at which the smaller firm went public in 1985. Only a year ago, Bear’s shares

More on the historic Fed move

Bloomberg.com: Worldwide: "Federal Reserve Chairman Ben S. Bernanke is being forced to throw out four decades of monetary history by a financial system choking on miscalculated risks and a deepening recession.Bernanke and the four Fed governors voted yesterday to become creditors to Bear Stearns Cos., a securities firm that isn't a bank, by invoking a law that hasn't been used since the 1960s.

Bloomberg.com: Worldwide

Bloomberg.com: Worldwide: "Bear Stearns Co. executives realized late afternoon of March 13 that the firm wouldn't be able to withstand what was effectively a ``run on the bank,'' the Wall Street Journal reported, citing unidentified people familiar with the events.At about 4:30 p.m. local time that day Chief Executive Officer Alan Schwartz became ``convinced'' Bear Stearns was facing a ``

The more things change, the more they stay the same

The news of JP Morgan coming to the rescue of Bear Stearns reminded many of a similar story from back on '07, as in 1907 when the James Pierpont Morgan (yes that JP Morgan) helped organize a bailout of bank during the 1907 Financial Panic.Educate Yourself - J.P. Morgan - Savior -- The Panic of 1907: "This week we continue our discussion of the Panic of 1907 and the man who, single-handedly,

Wow! Look out for the Bear!

Short version: Bear Stearns seems to be in a bunch of trouble. Not only has their liquidity disappeared, but other firms are reluctant to do business with them. This has led the Fed and JP Morgan to at least temporarily bail out the firm.From the NY Times:"The news from Bear Stearns came after the bank had insisted for days that its finances were in adequate shape. But the situation rapidly

Can You Beat the Market? It’s a $100 Billion Question - New York Times

Ken French has done it again! Definitely a superstar! From the NY Times:Can You Beat the Market? It’s a $100 Billion Question - New York Times: "INVESTORS collectively spend around $100 billion a year trying to beat the stock market. That’s the finding of a rigorous effort to measure the total costs of Americans’ efforts to surpass the returns they would have received by simply holding a stock

NYU Stern Finance Professor's New Research Shows Most Actively Managed Currency Funds Fail to Outperform a New Benchmark

NYU Stern Finance Professor's New Research Shows Most Actively Managed Currency Funds Fail to Outperform a New Benchmark: "Do most currency fund managers deserve their high fees? According to a new study by NYU Stern Finance Professor Richard Levich and co-author Momtchil Pojarliev, Head of Currencies at Hermes Investment Management, the answer is no. Their study is the first to challenge

The Buffalo News: Business: Adelphia headquarters building sells for $3.6 million

The Buffalo News: Business: Adelphia headquarters building sells for $3.6 million: "The former Adelphia Communications headquarters building in Coudersport, Pa., has been sold via Internet auction for the second time in five months.The lavishly built, five-year-old building received a high bid of $3.6 million in the online real estate auction. LFC Group of Companies, the California auction firm

Warren Buffett's Derivative Positions

Kirzner Fervor: Warren Buffett's Derivative Positions: "Berkshire Hathaway recently released its chairman's letter to the shareholders. Chairman Warren Buffett, opposed to many of the absurd and overlevered uses of derivatives, has used derivative positions over several years to take large positions. The most recent letter describes their current contracts which are divided among writing credit

Black Scholes Pricing Model - National Business News - Portfolio.com

Black Scholes Pricing Model - National Business News - Portfolio.com: "The model is based on the assumption that a trader can suck all the risk out of the market by taking a short position and increasing that position as the market falls, thus protecting against losses, no matter how steep. Nearly every employee stock-ownership plan uses Black-Scholes as its guiding principle. A pension-fund