Bank of America Chief Ousted as Chairman - NYTimes.com

The trend to separate CEO and Chair of the board position continues with the highly publicized case of Ken Lewis losing his chairman position.Bank of America Chief Ousted as Chairman - NYTimes.com: "Mr. Lewis, who helped build Bank of America into the nation’s largest bank, was stripped of his chairman’s title.... At a contentious annual general meeting, angry investors held him accountable for

Chrysler to File for Bankruptcy - washingtonpost.com

Will GM bondholders follow their lead?Chrysler to File for Bankruptcy - washingtonpost.com: "Chrysler, one of the three pillars of the American auto industry, will file for bankruptcy today after last-minute negotiations between the government and the automaker's creditors broke down last night, an Obama administration official said.U.S. officials had offered Chrysler's secured lenders $2.25

Longer horizon, more risk. An interview with Robert Stambaugh

Remember the Pasto and Stambaugh paper mentioned earlier in the month?From "Now the Long run looks riskier too""Applying Bayesian techniques, the professors found that reversion to the mean isn’t powerful enough to overcome the growing uncertainty caused by other factors as the holding period grows....""Now co-Author Robert Stambaugh offers more insights on the paper in an interview with

Swine flu fear catching fast in weak world economy - Yahoo! Finance

What will the economic impact of swine flu be? While it is WAY too early to say, it will have a negative impact. If the World Bank's study can be trusted, the impact may be less than I would have anticipated.Swine flu fear catching fast in weak world economy - Yahoo! Finance: "A report by the World Bank, updated last year, estimated that a severe pandemic -- like the Spanish flu outbreak in

What does a dollar a year salary mean?

Many 'No-Pay' CEOs Actually Were Richly Compensated, Study Finds | workforce.com: "When a corporate chief executive voluntarily forgoes a salary or takes $1 a year in pay, it’s largely symbolic in many cases, according to a report released by The Corporate Library.In 41 companies where the chief executive had either no base salary or a salary of $1 for the year, as well as no cash bonus, 21

Condé Nast Closes Portfolio Magazine - NYTimes.com

Condé Nast Closes Portfolio Magazine - NYTimes.com: "Portfolio, the ambitious, glossy business magazine from Condé Nast Publications, closed Monday after just two years. Joanne Lipman, editor in chief, and Tom Wallace, editorial director of Condé Nast, met with editorial staff members and announced that the magazine and its Web site, Portfolio.com, were shutting down, effective immediately.Most

U.S. tells Citi, Bank of America to boost capital - report - Apr. 28, 2009

From the NY Times:"...the new worry is that this latest effort to instill confidence may undermine it instead.When the stress test was first conceived, it was never clear whether the results would be made public. But within days of the government’s announcing the test, lawyers inside the banks started to point out that, ahem, this may be material information, which means by law they have to

GM's proposal would give bondholders next to nothing - USATODAY.com

GM's proposal would give bondholders next to nothing - USATODAY.com: "General Motors' (GM) bond-exchange proposal Monday will play out as high drama this month. It's a showdown between unhappy bondholders and the company's willing-to-file-for-bankruptcy new CEO. And it could get bumpy.On Monday, GM told bondholders they're about to get next to nothing — about 10% equity in the company — for the

The Merger Fund: The 'Poor Man's Hedge Fund'? - WSJ.com

The Merger Fund: The 'Poor Man's Hedge Fund'? - WSJ.com: "If you really want to diversify, you need to spread your money across a variety of funds investing in different asset classes, managers and strategies, from bonds to absolute return strategies to, say, precious metals or covered call funds. The Merger Fund is completely specialized, and that's the appeal of the thing.'We're all merger

Busy day...probably no posting

Sorry for the lack of posting this past few days.Had a BonaResponds local service weekend (3 days of community service) and have a alum on campus as a guest speaker today. Will get back to more normal routine either tomorrow or later today..

Yahoo to close GeoCities, other services in revamp

Oops, that merger did not work out too well.The Associated Press: Yahoo to close GeoCities, other services in revamp: "Yahoo Inc. said Thursday it plans to close GeoCities, a Web site publishing and hosting service it bought in May 1999 at the height of the dot-com boom for around $3 billion in stock."So the next time you decide to invest $3 billion for a stock with revenues of under $20 million

Long Term Capital Management a look back from an Insider

Wow! Great presentation! It is Eric Rosenfeld (one of the players of LTCM) speaking to Zvi Bodie's class on Long Term Capital Management Ten Years Later. This is a DEFINITE must see. I just sat transfixed (must confess it totally changed what I had planned on doing all morning) for over an hour. I have read the books and case studies, watched a Trillion Dollar Bet, and have thought

GM won’t make debt payment, bankruptcy ‘probable’ - The Business Journal of Milwaukee:

GM won’t make debt payment, bankruptcy ‘probable’ - The Business Journal of Milwaukee:: "General Motors Corp. won't make its $1 billion debt payment on June 1, and it is looking for a debt-for-equity exchange or court protection to lower its debt.GM chief financial officer Ray Young said a trip to bankruptcy court is “probable,” the Wall Street Journal reported. GM is trying to reduce its $28

Freddie Mac Executive Found Dead - NYTimes.com

Freddie Mac Executive Found Dead - NYTimes.com: "David B. Kellermann, the acting chief financial officer of the troubled mortgage giant Freddie Mac, was found dead Wednesday morning at his home in Northern Virginia.....Mr. Kellermann, 41, had been Freddie Mac’s chief financial officer since September. He was named to the position when the federal government seized the company and ousted its top

FinanceClass: What your interviewers are likely reading

FinanceClass: What your interviewers are likely readingNot technically finance, but I really like the post, so this is from my FinanceClass Blog. It has a bunch of videos of popular books that are changing the ways that people are thinking about issues. I put it together to help my students prepare for interviews, but I personally found the videos fascinating, and I bet you will to. (Definitely

Pay Rule Led Chrysler to Spurn Loan, Agency Says - washingtonpost.com

Talk about bittersweet feelings. Pay Rule Led Chrysler to Spurn Loan, Agency Says - washingtonpost.com: "Top officials at Chrysler Financial turned away a government loan because executives didn't want to abide by new federal limits on pay, according to new findings by a federal watchdog agency.The government had offered a $750 million loan earlier this month as part of its efforts to prop up the

Accounting games, what are they good for?

Accounting games, what are they good for? Absolutely nothing :) (to be sung to the old War What Is It Good For? song.)Dealbook - Bank Profits Appear Out of Thin Air - NYTimes.com: "With Goldman Sachs, the disappearing month of December didn’t quite disappear (it changed its reporting calendar, effectively erasing the impact of a $1.5 billion loss that month); JPMorgan Chase reported a dazzling

What Obama's pledge to cut $100 million really means - Apr. 20, 2009

I heard this on the radio before I saw it. I was sure I had heard it wrong. The announcer had to have misspoke. I mean, $100 million? that is nothing. But that is what it was. So here goes:From CNN: What Obama's pledge to cut $100 million really means - Apr. 20, 2009: "In essence the president has asked government agencies to trim the equivalent of .003% of the federal budget."To put this

Oracle Agrees to Acquire Sun Microsystems - NYTimes.com

This week in my classes we are looking at the "Market for Corporate Control." The central part of which is the merger and acquisition market. Thus, I should be sending thank-you cards to Sun and Oracle for the following which will make class that much more interesting:Oracle Agrees to Acquire Sun Microsystems - NYTimes.com: "The Oracle Corporation, the technology information company, announced

The Undesireable Effects of Banning Short Sales by Advanced Trading

From the AdvanceTrading.com blog:The Undesireable Effects of Banning Short Sales by Advanced Trading: "...study of short-selling activities by... Abraham Lioui, entitled 'The Undesirable Effects of Banning Short Sales,' calls into question both the reasons for the decision to ban short selling and the prejudices that weigh on those who short.Among the consequences of the ban: * Market volatility

Venture Capital Investments Plunge 61% Amid Frozen IPO Market - Bloomberg.com

Venture Capital Investments Plunge 61% Amid Frozen IPO Market - Bloomberg.com: "U.S. venture capital investments fell 61 percent to $3 billion in the first quarter, the lowest level in 12 years, as the financial crisis chased away funding for technology and clean-energy deals.Funding of clean technology -- coming off a surge of investments in 2007 and 2008 -- plunged 87 percent, the National

New sentiment indicator? Forget Skirt lengths, watch collars?

Trying to gauge market sentiment is a challenge. But that does not mean people don't keep trying. From measurements based off of skirt lengths, to closed end fund discounts, to the VIX we just keep trying. The newest candidate is Credit Suisse's so-called "Fear Barometer" out which is based on collars (as in the option position not what is at the top of a shirt).From Fear of a Recovery -

Madoff's Mets tickets being sold on eBay | News for Dallas, Texas | Dallas Morning News | Dallas Business News

Madoff's Mets tickets being sold on eBay | News for Dallas, Texas | Dallas Morning News | Dallas Business News: "The trustee liquidating Bernard L. Madoff Investment Securities LLC won court approval to sell New York Mets season tickets held by the defunct money management firm in an online auction.Irving Picard has already begun selling the tickets for April Mets games, and the two tickets for

IPOs back in the news.

Are IPOs back? Rosetta Stone continued its IPO which is just the fourth of the year and THIRD this month! Heat wave.Rosetta Stone: IPO Market Continues Activity -- Seeking Alpha: "Rosetta Stone (RST) IPO pricing at $18, above the expected range of $15 - 17, raising $112.5 million."From the WSJ:"Foreign language software specialist Rosetta Stone Inc. (RST) sold its initial public offering at $18

Corporate Governance: Separating the CEO and the Chairman Roles

The D & O Diary does a great tackles the issue of separating the CEO and Chairman positions. Corporate Governance: Separating the CEO and the Chairman Roles : The D & O Diary: "A growing chorus of voices is calling for public companies to make the separation of the Chairman and CEO functions the default governance structure. This movement, which may have the support of the new SEC Chair, appears

Quote of the day

Quote of the day:Economist.com | NEW YORK"If you owe your bank manager a thousand pounds, you are at his mercy. If you owe him a million pounds, he is at your mercy.- Yu Yongding, one of the Chinese government's top monetary economists, discussing why China took the rare step of selling US Treasuries in the first two months of the year. The saying is originally attributed to John Maynard Keynes."

The Unbearable Lightness of Nassim Taleb —A Response To Taleb’s 10 Item List | Simoleon Sense

Ok, I confess, I am a fan of Taleb. But that said, seeing his flaws is valuable as well so it was with special interest I read the following from Simoleon Sense:The Unbearable Lightness of Nassim Taleb —A Response To Taleb’s 10 Item List | Simoleon Sense: "Davi writes an interesting article titled “The Unbearable Lightness Of Nassim Taleb”. So, in the spirit of intellectual debate I present you

Video on the 1929 Stock Market Crash

Good video on the 1929 Stock market crash. BTW just showed the Trillion Dollar bet in class last week. The audio of this and that are very similar!

Treasury Is Said to Warn G.M. of Bankruptcy Risk - NYTimes.com

Treasury Is Said to Warn G.M. of Bankruptcy Risk - NYTimes.com: "The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite G.M.’s public contention that it could still reorganize outside court, people with knowledge of the plans said during the weekend"and later:"The preparations are aimed at assuring a G.M. bankruptcy filing

With Finance Disgraced, Which Career Will Be King? - NYTimes.com

With Finance Disgraced, Which Career Will Be King? - NYTimes.com: "Big shifts in the flow of talent can ripple through the nation and the economy for decades with lasting effect. The engineers of the Depression built everything from inter-city roads to the Hoover Dam, while the Sputnik-inspired scientists would go on, often with research funding from the Pentagon, to create the building-block

Mutual Funds: 10 questions to test your IQ

AZCentral (The Arizona Republic) has a pretty good mutual fund quiz.Mutual Funds: 10 questions to test your IQ: "...mutual funds remain a cornerstone of retirement planning. But they're widely misunderstood, and investing ignorance can really cost you. So can you tell a fund expense ratio from a turnover ratio? What about an open-end fund from a closed-end? Try this quiz, and check out the

Top 50 Economics Blogs — Bankling

The new rankings from Bankling.com are out (not exactly the BCS, but....) and FinanceProfessor.com's blog is #24!!!Top 50 Economics Blogs — Bankling: "A light-hearted perspective on economics from an assistant professor at the St. Bonaventure University School of Business."Well technically I teach finance and am an associate now, but who cares? Yeah I know, top 24 is not the best but I will

Wall Street's Highest Earners - Forbes.com

Wall Street's Highest Earners - Forbes.com:A look at hedge fund pay. It staggers my imagination."The $10.3 billion in pay for the 20 highest earners was down 45% from 2007 and 22% from 2006"But not all were down. Take for instance James Simons:"James Simons, who runs Renaissance Technologies..., tops our list with earnings of $2.8 billion in 2008, even though two of his three funds were down

US finance pundit Cramer a 'buffoon' says leading economist Roubini | Business | guardian.co.uk

Fresh off his "battle" with Jon Stewart, Jim Cramer is now "fighting" with Nouriel Roubini.US finance pundit Cramer a 'buffoon' says leading economist Roubini | Business | guardian.co.uk: "Roubini, a New York University professor who famously forecast a dire world recession as far back as 2006, has taken exception to remarks on a blog by Cramer that he is 'intoxicated' with his own 'prescience

Google and the Temptations of Being Cash-Rich - DealBook Blog - NYTimes.com

Several years ago Eric and crew at CyberLibris asked me for a list of my all time favorite finance papers. I could not find a link to it now but I do know that well in the top five was Michael Jensen's 1986 free cash flow paper. It was one of the first academic papers I read when I got to Rochester for my MBA and it immediately clicked. It later became the premise of my PHD dissertation and I

Nissan removes cars from McAllister's Miss. lot - NFL - Yahoo! Sports

With the economy struggling, versions of this are playing out many times around the country, but given it is Deuce McAllister, I thought more would be interested in this specific case.Nissan removes cars from McAllister's Miss. lot - NFL - Yahoo! Sports: "Nissan began removing vehicles Tuesday from a dealership owned by former New Orleans Saints running back Deuce McAllister.About 20 cars and

SSRN-So What Orders Do Informed Traders Use? Evidence from Quarterly Earnings Announcements by Hsiao-Fen Yang

I love when two ideas are in direct competition and are testable. For instance, suppose you have information that you want to trade on. If you trade too aggressively you will move the market (and if it is inside information get caught!). On the other hand, if you wait too long, the information is released to the public and your advantage is gone.A new working paper by Hsiao-Fen Yang looks at

Nearly 97 percent of HSBC rights issue taken up - BusinessWeek

Just in time to serve as a perfect example of what we do in class is relevant, HSBC announced it had completed a rights issue.(A rights issue is a way of selling new equity by giving existing shareholders the right to buy new shares at a reduced price. These rights are generally transferable which means they can be sold to someone else who will buy the new shares.)From BusinessWeek: "

Strategies - Now the Long Run Looks Riskier, Too, for Investors - NYTimes.com

First from the NY Times: Strategies - Now the Long Run Looks Riskier, Too, for Investors - NYTimes.com: "...despite downturns like the one we’ve endured recently, stocks over periods of 30 or more years have almost always outperformed other asset classes. And numerous studies have found that the stock market’s long-term returns have tended to fall within a surprisingly narrow range.But those

Selling forwards for sporting events | Blogs |

Felix Salmon writing for Reuters has a fascinating look at how the NCAA and other major sporting events could increase their profits based off a pricing model that relies on options and/or forward sales.Felix Salmon » Blog Archive » Selling forwards for sporting events | Blogs |: "Preethika Sainam of Indiana University, along with two colleagues from Chapel Hill, has an interesting paper

SSRN-The Actuarial Balance of the Pay-as-You-Go Pension System: 'American' Model versus 'Swedish' Model by Carlos Vidal-Meliá, María Del Carmen Boado-Penas

In whatever language you say it, transparency is good. Here it is on transparency in pension accounting. SSRN-The Actuarial Balance of the Pay-as-You-Go Pension System: 'American' Model versus 'Swedish' Model by Carlos Vidal-Meliá, María Del Carmen Boado-Penas: "The main conclusion reached is that making it mandatory for the actuarial balance to be drawn up every year would force politicians to

SSRN-Chinese Bond Markets - An Introduction by Index and Portfolio Services, Standard & Poor's

Standard and Poor's has a very short but informative primer out on the Chinese Bond market. It is full of things I sure did not know about the bond market.SSRN-Chinese Bond Markets - An Introduction by Index and Portfolio Services, Standard & Poor's: "While foreign investors have flocked to Chinese equities because of performance and correlation considerations, there is relatively less awareness

Harvard Begins Case Study as Tainted MBAs Reveal Damaged Brand - Bloomberg.com

Interesting. My classes sure have changed. I would imagine most professors have changed what they are teaching. It would be fun to see the case study that results and their changes. Harvard Begins Case Study as Tainted MBAs Reveal Damaged Brand - Bloomberg.com: "Harvard Business School, stung by criticism that it hasn’t prepared alumni to cope with the economic meltdown, will dissect its

Subprime Suit Accuses KPMG of Negligence - Accounting - CFO.com

Well we all knew that lawsuits would begin soon. Here we go:Subprime Suit Accuses KPMG of Negligence - Accounting - CFO.com: "Two complaints filed in federal courts yesterday claim that KPMG auditors were complicit in allowing 'aggressive accounting' to occur under their watch at New Century Financial, the mortgage lender that collapsed two years ago at the beginning of the subprime-mortgage

FASB Eases Fair-Value Rules Amid Lawmaker Pressure (Update1) - Bloomberg.com

FASB Eases Fair-Value Rules Amid Lawmaker Pressure (Update1) - Bloomberg.com: "The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules....The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed

Airlines Return to Hedging - WSJ.com

According to the WSJ, airlines are making a switch from futures to options for their hedging programs.Airlines Return to Hedging - WSJ.com: "..oil prices are starting to rebound, creating a quandary for the industry. If the airlines dive back into hedging, they could end up overpaying once again should oil prices fall back. Remaining unhedged would leave airlines exposed should the recent rally

SSRN-What Do Subprime Securitization Contracts Actually Say About Loan Modification? Preliminary Results and Implications by John Hunt

Interesting! John Hunt reviews some actual contracts and finds they rarely strictly forbid loan modifications.SSRN-What Do Subprime Securitization Contracts Actually Say About Loan Modification? Preliminary Results and Implications by John Hunt: "A review of pooling and servicing agreements from large subprime securitization programs in 2006 reveals that about 10% of the contract ban loan