Will Higher Education Be the Next Bubble to Burst? - Chronicle.com

Will Higher Education Be the Next Bubble to Burst? - Chronicle.com: "Is it possible that higher education might be the next bubble to burst? Some early warnings suggest that it could be.....According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and

Free & Easy Access to worldwide Broadcasts on Economics, Social Security, Policy and Strategy

THE FREEDOM NETWORK AUDIO PORTAL - Free & Easy Access to worldwide Broadcasts on Economics, Social Security, Policy and Strategy: "Podcasts on Economics, Social Security, Strategy, Liberty & Public Policy"Wow. Amazing stuff. Thanks to Wayne Marr for point it out.

Data mining--or past performance is no guarantee of future performance

Calendar and other similar anomalies are generally very interesting and students love reading about them (well as much as they love reading anything in finance) but do not fit well with efficient markets. For instance, why? Consider the January effect If stocks were predictably up in January and investors had calendars that showed December was the month before January, investors would buy in

Short term run up in IPOs...anecdotal evidence fits historical

In class we teach that IPOs are very risky and have historically been underpriced in short run and then overshoot their value and are overpriced in longer run. (see Ritter's work on this)The standard academic explanation for this is that with a float lower than shares outstanding the stock is very difficult to be shorted (See Bradley and Jordan 2002) and there are no options for a period so

G.M. Reaches a Deal With Bondholder Committee - DealBook Blog - NYTimes.com

WOW! GM Bondholders reached a deal! SHOCKED. They get 10% plus warrants to buy more shares. G.M. Reaches a Deal With Bondholder Committee - DealBook Blog - NYTimes.com: "General Motors said in a regulatory filing on Thursday that it has proposed a new deal to a committee representing many of its largest bondholders, offering up to a 25 percent stake in exchange for not opposing G.M.’s

Mixed results on the Microfinance front

Contrary to the attention grabbing headline, the Jury is still out on microfinance. Here is at least some evidence that it does not do all that we hope. That said, the conclusion is definitely more controversial.The verdict is in on microfinance - PSD Blog - The World Bank Group: "The results from the first large-scale randomized trial of access to microfinance indicate that it comes up short in

Pet Millionaires: Seven Cats and Dogs Who Are Actually Richer than You — Bankling

Pet Millionaires: Seven Cats and Dogs Who Are Actually Richer than You — Bankling: "We hear about millionaires — and billionaires — quite frequently. But less often do we hear about pet millionaires. They do, however, exist. Since 1923, when the first reported case of a pet inheritance was affirmed in Willett vs. Willett, pets have been receiving money. Sometimes quite a lot of money. Here are

Work-Life Balance Is Especially Difficult in Finance - NYTimes.com

What do you think?Economic Scene - Work-Life Balance Is Especially Difficult in Finance - NYTimes.com: "Among elite white-collar fields, finance appears to be uniquely difficult for anyone trying to combine work and family.Finance, on this score, is worse than law and worse than academia. It is far worse than medicine, which emerges from the research as the highly paid profession with the most

Sometimes we can't see the forest for the trees

Part Behavioral finance, part cycling, and part a study in how the brain works, the following "Test" is eye opening at least. We all get so caught up in seeing what we want to see that we sometimes miss the obvious. This effects us in many ways: In finance, if bullish (optimistic), we are more apt to see the good news, if bearish (pessimistic) you see only bad news.That is one reason why big

Your Money - Advice for Graduates From a Texas Tech Money Major - NYTimes.com

The NY Times did a timely piece for graduates. Interestingly, they had a graduate help write the article.Your Money - Advice for Graduates From a Texas Tech Money Major - NYTimes.com:Some highlights:"I spent hours picking the brain of Madison Nipp, who graduated earlier this month with the highest grade point average of anyone in the major. ""...Deena B. Katz, an associate professor in the Texas

US Bancorp CEO Explains Banking | Simoleon Sense

Ok, yes I know this was pre-Lehman, and even pre-Bear! That said, it is an excellent starting point to understand banking. (If I were currently teaching a Money and Banking class I guarantee it would be required and tested).Richard Davis (the CEO) speaks on the banking industry as well as his own firm.US Bancorp CEO Explains Banking | Simoleon Sense: "This video was posted at the noisefree

Wall St. Pay Overhaul Is Coming, Geithner Says - DealBook Blog - NYTimes.com

Well it could be worse. Geithner gave a long interview (watch it if you can) with Bloomberg. Some highlights from Bloomberg and the NY Times:From Bloomberg:"The administration’s pay plan would be part of a proposed comprehensive overhaul of financial regulation aimed at both protecting consumers and reducing vulnerability to crises. Geithner has previously ruled out setting specific caps on pay

Catching up Newsletter style

Catching up with some articles I had saved on Desktop...Bloomberg (with the help of NYU's Thomas Pilippon has an interesting article on how lost Wall Street jobs impact "Main Street". "The biggest Wall Street crisis since the Great Depression isn’t just a setback for New York or bankers. The finance industry’s contraction may wipe out $185 billion in wages and profits, or $600 for every man,

Britain Warned On Credit Rating - washingtonpost.com

Uh, oh...Might we need to redefine the risk free rate?As we have seen for months now, the threat of a US downgrade is no longer trivial. Months ago Chinese officials expressed their concern and it such speculation is common fare both online and in newspapers. Now the strongest signal yet that sovereign debt (even of the US and UK) really is no longer default risk free:Britain Warned On Credit

I had a complaint that I think I should address

I subscribe to the view that if one person is saying it, many others are thinking it, so I will share my response.I received an email recently that questioned why no one is making a bigger issue of the fact that much of the money paid in the so-called Wall Street Bailouts were just to make other bankers better off. The email also criticized my use of non academic publications (NPR and 60 Minutes

James Surowiecki on the boom and on banks

James Surowiecki (yes he of Wisdom of Crowds Fame) wrote recently in the New Yorker on why regulators and politicians must realize that the small banks of the post war era (think George Bailey) will not be coming back.Monsters, Inc.: Financial Page: The New Yorker: "The desire to bring back the boring, small banking industry of the nineteen-fifties is understandable. Unfortunately, the only way

Why AIG Stumbled, And Taxpayers Now Own It - CBS News

From 60 Minutes.


Why AIG Stumbled, And Taxpayers Now Own It - CBS News: "(CBS) Of all the corporate bailouts that have taken place over the past year, none has proved more costly or contentious than the rescue of American International Group (AIG). Its reckless bets on subprime mortgages threatened to bring down Wall Street and the world economy last fall until the U.S Treasury and the Federal

Bonds outperforming stocks over the last 40 years? WOW!

"You are never as good as you think in a winning streak nor as bad as you think in a losing streak."The other night I was listening to a Mets-Giants game on the radio and the announcer reminded us of the above quote and attributed it to Bobby Valentine (former Mets' manager). I have no doubt that Bobby V did say it, but I am also willing to bet it has been said millions of times over the years

Questions for Myron Scholes - Crash Course - Interview - NYTimes.com

Myron Scholes does not deserve the blame for the economic crisis but as a big name he seemingly is always in the cross fire. This time is no different as he is interviewed by Deborah Solomon of the NY Times.Questions for Myron Scholes - Crash Course - Interview - NYTimes.comAn excerpt:"The writer Nassim Nicholas Taleb contends that instead of giving advice on managing risk, you “should be in a

Financial literacy quiz | APP.com | Asbury Park Press

Pretty good finance quiz that focuses on personal finance.Financial literacy quiz | APP.com | Asbury Park Press:"Are you up to taking a short quiz to test your knowledge of some key aspects of family financial management? Give it try and see how you do. (Answers at bottom):"

Wolfram|Alpha

This just raised the bar. A WOW on all levels.As for finance, the bar has been raised for all stock reports etc. Typing in one word (Name of stock) and you have the basis for an entire presentation. Here is APPLE's : Wolfram|AlphaIndeed it is better done than some I saw this year in class! Google, you could be in trouble.

Insider Trading Discovered Inside The SEC

YIKES!!! With the normal apologies to Dr. Seuss, who is monitoring the monitors?From Clusterstock:Insider Trading Discovered Inside The SEC: "The SEC isn't great at identifying most kinds of fraud, but they've always had a knack for identifying high-profile insider trading cases.Maybe because they're intimitely familiar with it?Bloomberg: U.S. prosecutors and the FBI are investigating whether

Our Vanishing Home Equity

Debt makes good times, great; and bad times, horrible. So equity values in homes have fallen much further than the underlying real estate prices. So far in fact that if this chart is to be believed, we are underwater!CHART OF THE DAY: Our Vanishing Home Equity:(from Clusterstock)"Everyone knows that U.S. house prices have fallen almost 30% from the peak. What is less well known is that

Yet another Astana Update: Astana changes jersey over money row - VeloNews

Still more on Astana. ANd Livestrong has stated there is a major announcement soon. Stay Tuned.Astana changes jersey over money row - VeloNews: "The sun hasn’t set on Astana yet, but the glow of the team’s sponsors has certainly dimmed.Following a long-running row over the non-payment of the team’s wages, eight of nine riders on the Kazakhstan-sponsored squad started the Giro d’Italia’s seventh

Update on Astana from Johan Bruyneel

Here is an update from Johan Bruyneel himself on what is going on with Astana:: Johan Bruyneel::: "Since the beginning of the year, our team has had to deal with delays in payment from Kazakhstan. Up till now the situation is that the Kazakh Cycling Federation (KCF) has only paid two months of salary to the management company that runs the team. The only explanation we get from Kazakhstan is that

GM says Chrysler-like deal best bankruptcy option | Reuters

GM says Chrysler-like deal best bankruptcy option | Reuters: "General Motors Corp (GM.N) on Thursday said that if it files for bankruptcy it would most likely pursue a quick sale of its best assets to a new operating company similar to the process now reshaping Chrysler LLC.The disclosure, which came in a filing for U.S. securities regulators, marked the first time that GM said it would most

From NPR: Financial Time's Gillian Tett on JP Morgan and Derivatives

I listened to this on the radio tonight. It was so good, that the very first chance I had to blog it, I did. Good stuff!Fresh Air from WHYY : NPR: "Journalist Gillian Tett warned about the problems in the financial industry long before many of her colleagues. In her new book, Fool's Gold, Tett examines the role J.P. Morgan played in creating and marketing risky and complex financial products"The

Golden coffins: 10 of the most egregious CEO perks - MarketWatch

Agency cost problems or not? You decide.Golden coffins: 10 of the most egregious CEO perks - MarketWatch: "Use of company jets, cars and drivers, free home security, free financial planning advice and country club memberships. Some of these perquisites, or perks, keep coming after retirement. Even in death, the money keeps flowing in the form of so-called golden coffins.In the midst of the worst

SEC Proposes New Money Managers Rules After Madoff Ponzi Scheme - Bloomberg.com

SEC Proposes New Money Managers Rules After Madoff Ponzi Scheme - Bloomberg.com: "The U.S. Securities and Exchange Commission moved to impose new rules on money managers to safeguard client holdings after Bernard Madoff’s $65 billion fraud shattered investor confidence.SEC commissioners voted 5-0 today on a proposal that would subject investment advisers holding customer assets to surprise

Video: The Fat Tail----part Economics,part Finance, part politics

YouTube - The Fat Tail-- Part Economics, part finance, part politics but totally interesting.While it is probably more politics than a normal post, it has much finance as well. And one of the main themes is that politics are taking over finance and economics. "In a new groundbreaking book The Fat Tail, Ian Bremmer and his co-author Preston Keat, two of the world's leading figures in political

Paulson Told Bankers to Take U.S. Taxpayer Aid or Be ‘Exposed’ - Bloomberg.com

Paulson Told Bankers to Take U.S. Taxpayer Aid or Be ‘Exposed’ - Bloomberg.com: "Former Treasury Secretary Henry Paulson, saying nine U.S. banks were “central to any solution” of the credit crisis, told their leaders to take government aid or be forced to by regulators, according to a memo prepared for an October meeting.“If a capital infusion is not appealing, you should be aware that your

Fast Look around

In the midst of finals, so very little time, but I did think these posts were interesting:footnoted.org» Blog Archive » Another $3 million for Martha Stewart…: "Martha’s new employment contract in the 10-Q filed by the company yesterday, which includes a $3 million “retention payment” for the domestic goddess. That’s in addition to a $2 million salary, which according to the proxy the company

Zvi Bodie on PBS

Zvi Bodie has been on PBS quite a bit of late:Pocket Change: Answers to Your Finance Questions | Online NewsHour | May 5, 2009 | PBS: "In the first installment of Pocket Change, a regular forum on personal finance, NewsHour economics correspondent Paul Solman and finance professor Zvi Bodie tackle viewers' questions on credit unions, credit scores, and whether gold makes a good investment."and

Banks raising new capital for differing reasons

Seems like everyone os selling these days! Selling new shares that is. From raising money because of the stress test to raising money to repay TARP funds,From the WSJ Banks Rush to Raise Capital:"Wells Fargo and Morgan Stanley were among the first banks on Thursday to rush to raise capital following preliminary statements by the Federal Reserve. Wells Fargo said it would offer $6 billion in

So many interesting reads, so little time

In the spirit of the old FinanceProfessor Newsletter, here is how I am going to try and catch up:Over at ClusterStock/BusinessInsider Joesph Weisenthal was really on a roll this week. The first article is an excellent fast look at why the Federal Government should not be active bank shareholders: "The real question should be: Does the US having an active stake in Citigroup make it more likely

SSRN-Luck versus Skill in the Cross Section of Mutual Fund Alpha Estimates by Eugene Fama, Kenneth French

Ok, for starters It was from Fama and French. So even if I said nothing more, you would probably assume it was good. Like most of their work, this one is thought-provoking and insightful. Their interest this time is in Mutual Fund performance. Their findings? More evidence that markets are tough to beat.SSRN-Luck versus Skill in the Cross Section of Mutual Fund Alpha Estimates by Eugene Fama,

Stress Tests Results Split Financial Landscape - NYTimes.com

Stress Tests Results Split Financial Landscape - NYTimes.com: "Broadly speaking, the test results suggested that the banking industry was in better shape than many had feared. Of the nation’s 19 largest banks, which sit atop two-thirds of all deposits, regulators gave nine a clean bill of health. The remaining 10 were ordered to raise a combined $75 billion in equity capital as a buffer against

SSRN-A Model of Casino Gambling by Nicholas Barberis

GREAT STUFF!!! Barberis uses prospect theory to help explain behavior at casinos.SSRN-A Model of Casino Gambling by Nicholas Barberis:From the abstract: "...prospect theory can offer a surprisingly rich theory of gambling, one that captures many features of actual gambling behavior. First, we demonstrate that, for a wide range of parameter values, a prospect theory agent would be willing to

Geithner: How We Tested the Big Banks - DealBook Blog - NYTimes.com

A quick look from Geither's perspective at the stress tests (no not the results, just why, and what next.)Geithner: How We Tested the Big Banks - DealBook Blog - NYTimes.com: "We brought together bank supervisors to undertake an exceptional assessment of the strength of our nation’s 19 largest banks. The object was to estimate potential future losses, and ensure that banks had enough capital to

G.M. Posts a Quarterly Loss of $6 Billion - NYTimes.com

While the accounting loss was lower, the rate at which GM was using cash is still amazingly fast.G.M. Posts a Quarterly Loss of $6 Billion - NYTimes.com: ""G.M. said it depleted $10.2 billion from its cash reserves in the quarter, or $113 million a day,"Do you remember this post from last quarter when the firm lost $9 billion? Well we can redo it now. I will base it off cash since I no longer

NHL, Team in Bankruptcy Showdown - WSJ.com

Another sports story with finance ties, or a finance story with sports ties, you decide:The case centers on Jim Balsillie (he of Blackberry fame) wanting to buy the team and move it to Southern Ontario. But to do this he has to 1. buy the team 2. get the league to approve 3. get out of Dodge (or Phoenix in this case). To that end, he has made an offer that is contingent on being allowed to

Madoff's former secretary reveals financier's private side | Business | guardian.co.uk

No real finance content but interesting background:Madoff's former secretary reveals financier's private side | Business | guardian.co.uk: "In an interview with NBC television today, Squillari, who used to sit just yards from Madoff's office, said she believed the 71-year-old was withholding information from the authorities in order to protect accomplices: "I believe that yes, he is protecting

Financial turmoil in the cycling world!

WOW! Ok, so I am very biased on this. I get about 40 tweets a day from Team Astana members. So when there is talk that the Giro may be the team's the last race, I get scared.Boulder Report » Blog Archive » Giro d’Italia 2009: Is This Team Astana’s Last Race?: "...In the original Vinokourov deal, seven co-sponsors collaborated to support Astana, named for the country’s capital. The sponsors

A look at Executive Compensation

This semester we really had to rush through executive compensation (market conditions took up quite a bit of class time), so I want to make my classes (and by extension others) aware of some of the debate on CEO pay. So a special post on CEO pay.First yes CEO pay is high and getting higher over time. But I really do not want to address that to much bust to say that the level of pay appears to

Hedge Fund Manager Strikes Back at Obama - DealBook Blog - NYTimes.com

Wow. Hard hitting letter by Clifford S. Asness of AQR Capital Management opposing Obama's comments attacking hedge funds in the wake of the Chrysler bankruptcy. Much good. My favorite part:Hedge Fund Manager Strikes Back at Obama - DealBook Blog - NYTimes.com: "...it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they

Warren Buffett Answers Your Questions - DealBook Blog - NYTimes.com

From the NY Times:Warren Buffett Answers Your Questions - DealBook Blog - NYTimes.com: "“For most newspapers in the United States, we would not buy them at any price,” said Mr. Buffett, whose company owns a large stake in The Washington Post Company. He added that he sees the possibility of “nearly unending losses” for newspaper companies. Mr. Munger called the industry’s decline “a national

Swine flu meet Money and Banking

Predicting Flu With the Aid of (George) Washington - NYTimes.com: "The best way to track the spread of swine flu across the United States in the coming weeks may be to imagine it riding a dollar bill."The model is based on the "Where’s George?" that you probably have seen stamped on dollar bills. It " was started more than 10 years ago by Hank Eskin, a programmer who marked each dollar bill he

Weekly Wisdom Roundup #26 (Links You Don’t Want To Miss) | Simoleon Sense

Weekly Wisdom Roundup #26 (Links You Don’t Want To Miss) | Simoleon Sense:ALWAYS a weekly read! Good stuff."Simoleon Sense presents business issues through an interdisciplinary lens, integrating research on: * Value Investing * Behavioral Finance * Neuroeconomics * Psychology * Economics * Venture Capital & Private Equity"

Bill Hammond's presentation to my classes

Bill Hammond spoke to my class last week on careers in insurance and risk management. It was very good. If you only want audio of it, that is available here. If you want to see the powerpoint slides, they are available here.Watch Bill Hammond's presentation at SBU School of Business in Educational & How-To | View More Free Videos Online at Veoh.com

Jack Kemp in His Own Words - WSJ.com

As a former Buffalo Bills' QB, Jack Kemp was in the news locally all the time. He was a great guy and the country is poorer for his passing this weekend.The many WSJ op-ed pieces he wrote stand as a testament to his intelligence and economics.Jack Kemp in His Own Words - WSJ.com: "Congressman Jack Kemp died Saturday at age 73. The following are excerpts from his many op-eds for The Wall Street

Will time-tested 'Sell in May' stocks strategy work in this recession? - Salt Lake Tribune

Will time-tested 'Sell in May' stocks strategy work in this recession? - Salt Lake Tribune: "A time-tested strategy that calls for investors to 'sell in May and go away' might sound awfully tempting this year....Simplistic as it sounds, the approach has produced reliable results with reduced risk for decades. Since 1950, the Dow Jones industrial average has produced an average gain of 7.3 percent

Southwest Airlines and hedging from WSJ

Article - WSJ.com: "Southwest Airlines Corp. (LUV), the airline industry's most aggressive fuel hedger, remains committed to hedging to lock in future fuel prices, Laura Wright, chief financial officer, told Dow Jones Newswires.Amid today's volatile oil prices, Southwest has placed new hedges this year using only call options. 'That's our favorite way to hedge,' she said, because it offers

Buffett Dismisses Stress Tests for Assessing Banks (Update1) - Bloomberg.com

Buffett Dismisses Stress Tests for Assessing Banks (Update1) - Bloomberg.com: "Berkshire Hathaway Inc. Chairman Warren Buffett dismissed the importance of the government’s stress tests of major U.S. financial institutions in helping him assess banks he invested in.“I think I know their future, frankly, better than somebody that comes in to take a look,” Buffett said before the start of Omaha,

Stock Repurchases: Theory and Evidence by Jim Hsieh, Qinghai Wang

SSRN-Stock Repurchases: Theory and Evidence by Jim Hsieh, Qinghai Wang:From the abstract: "...article surveys the theoretical and empirical studies on share repurchases. Share repurchases have surpassed cash dividends and become the dominant form of corporate payouts since the last decade. This study provides a brief description of five major types of share repurchases and considers the motives

Why Bankruptcy is needed (from the WSJ)

Obama did a good impersonation of Mr. Thompson or Wesley Mouch as he harped against bond investors and hedge fund managers (the industrialists from Atlas Shrugged), but such political name calling is not what is needed and indeed quite scary. (why scary? He is essentially asking the funds to forgo returns they deserve to pick an alternative that makes them worse off. This is not a recipe for