Fed Proposes Selling Term Deposits to Absorb Excess Reserves - BusinessWeek

In "open-market transactions" the Fed buys and sells assets to change the money supply. For instance, if they want to shrink the money supply they will sell something. (selling shrinks the money supply since the banks have to pay money to buy the asset. This in turn reduces the amount of money available to lend out.Now the Fed is considering selling a different type of asset:Fed Proposes

The Intelligent Investor: Golden Pay for CEOs Could Be Bad for Stocks - WSJ.com

The Intelligent Investor: Golden Pay for CEOs Could Be Bad for Stocks - WSJ.com: "The first study, led by corporate-governance expert Lucian Bebchuk of Harvard Law School, looked at more than 2,000 companies to see what share of the total compensation earned by the top five executives went to the CEO. The researchers call this number—which averages about 35%—the 'CEO pay slice.'It turns out that

Keynes and Hayek rap from PBS

This is good. Not every day you can teach economics with rap music.

Thomas Acquinas for market prices from the Mises Institute

An interesting piece on price (which supports supply and demand as being the drivers of price) from Mises.org.As a grocer by birth (I just happen to teach finance ;) ) I have often been puzzled at the idea of price "gouging" after disasters (big or small). A few summers ago we had a power outage. Hence people wanted ice and water. We arranged special deliveries (at an added cost) and sold them at

SSRN-Do Corporate Insiders Prefer Nasdaq? by Stanley Peterburgsky

Interesting take on Rule 144. The rule sets conditions when in the SEC's words there can be Image via Wikipedia "...public resale of restricted and control securities if a number of conditions are met...." included in these conditions is a volume condition: "Trading Volume Formula. If you are an affiliate, the number of equity securities you may sell during any three-month

Epoch Times - Insider Trading on the Rise

Epoch Times - Insider Trading on the Rise: "“The Enron case illustrates one of the most pernicious effects of insider trading: It gives executives a reason to distort reports on corporate performance and find other ways to manipulate markets to their own benefit,” Strudler notes."

SSRN-The Microstructure of the TIPS Market by Michael Fleming, Neel Krishnan

A god article for class! Explains the TIPS market very well. SSRN-The Microstructure of the TIPS Market by Michael Fleming, Neel Krishnan: " We characterize the microstructure of the market for Treasury inflation-protected securities (TIPS) using novel tick data from the interdealer market. We find a marked difference in trading activity between on-the-run and off-the-run securities, as in the

SSRN-Voting with Their Feet or Activism? Institutional Investors’ Impact on CEO Turnover by Jean Helwege, Vincent Intintoli, Andrew Zhang

SSRN-Voting with Their Feet or Activism? Institutional Investors’ Impact on CEO Turnover by Jean Helwege, Vincent Intintoli, Andrew Zhang: "We find that voting with one’s feet is done largely by institutions that have less than 1% ownership in the firm while institutions that hold block levels of ownership at the time of the CEO turnover announcement significantly increase their ownership levels

A Habit of Generosity - WSJ.com

A Habit of Generosity - WSJ.com: "Paul Zak, a neuroeconomist and director of the Center for Neuroeconomics Studies at Claremont Graduate University in Claremont, Calif., has devoted his research to explaining this type of generosity. 'I investigate the biological basis for generosity, focusing on the neuroactive hormone oxytocin,' he says in his blog for Psychology Today. 'Our studies have shown

In IPO Market, Issuers Court Long-Term Buyers - WSJ.com

The WSJ provides more evidence that investors are not the same.In IPO Market, Issuers Court Long-Term Buyers - WSJ.com: "Long-only buyers—those who tend to hold the stock rather than flip it on the first day—have always been critical participants in successful new issues. Mr. Fox added that issuers 'focus less on allocations when every deal is doing well than when they do in a more

French plan to force gender equality on boardrooms | World news | The Guardian

French plan to force gender equality on boardrooms | World news | The Guardian: "In a bill submitted to the French parliament this week, all companies listed on the Paris stock exchange would have to ensure female employees made up 50% of their board members by 2015. If passed, a gradual implementation of the law would see businesses obliged to have women in 20% of board seats within 18 months,

Job growth predicted in financial regulation - washingtonpost.com

Note: if you are surprised even a little at this, shame on you.Job growth predicted in financial regulation - washingtonpost.com: "Financial examiners and compliance officers are expected to be two of the 30 fastest-growing U.S. occupations over the next 10 years, according to a Labor Department report released last week."

Farnam Street: A Dirty Word or a Dirty World? Attribute Framing, Political Affiliation, and Query Theory

Need more proof that framing and how (and not just what) we say matters? Consider the following from Farnam Street:Farnam Street: A Dirty Word or a Dirty World? Attribute Framing, Political Affiliation, and Query Theory: "The main distinction was between a surcharge described as a 'carbon tax' and an identical charge described as a 'carbon offset'.The tax was unpopular - no real surprise. But

UPDATE 7-Cadbury points to rival interest as it rejects Kraft | Reuters

UPDATE 7-Cadbury points to rival interest as it rejects Kraft | Reuters: "Cadbury (CBRY.L) teased shareholders with the prospect of rival bids and promised bigger dividends and stronger growth as it again knocked back a 10 billion pound ($16.2 billion) offer from Kraft Foods (KFT.N)."

Bacteria provide new insights into human decision making

Have a hard time believe I am linking to an article on bacteria for Finance, but it is similar in ways to passive investing. If everyone is doing it, you have an incentive to not do it, but if no one is doing it, you have an incentive to do it.Bacteria provide new insights into human decision making: "'We have developed for the first time a system level model of a large gene network to decipher

Fondo Libre - Visualizing Bank Failures ( 2008-2009 )

Fondo Libre - Visualizing Bank Failures ( 2008-2009 ): "Visualizing Bank Failures ( 2008-2009 ) from Michael J Bommarito II on Vimeo."Visualizing Bank Failures ( 2008-2009 ) from Michael J Bommarito II on Vimeo.

Paul Samuelson, Nobel-Winning Economist, Dies at 94 (Update1) - Bloomberg.com

Paul Samuelson, Nobel-Winning Economist, Dies at 94 (Update1) - Bloomberg.com: "Paul Samuelson, Nobel Prize-winning economist and author of the best-selling economics textbook in history, died today at his home in Belmont, Massachusetts. He was 94."

Hedge Fund Exchange: Women Hedge Fund Managers Outperform Men

Hedge Fund Exchange: Women Hedge Fund Managers Outperform Men: "Women also, apparently, make better money managers according to another study by two professors at UC Davis [3]. That study found that overconfidence caused men to trade stocks 45 percent more often than women, thus lowering their net portfolio returns by 2.65 percent per year (compared with 1.72 percent lower returns for women

Bubble Decade: Technology, Housing, Real Estate, Money, Layoffs, Companies, Unemployment, Internet Pioneers, Business, Markets, Finance - CNBC.com

Bubble Decade: Technology, Housing, Real Estate, Money, Layoffs, Companies, Unemployment, Internet Pioneers, Business, Markets, Finance - CNBC.com: "The sweeping story of the three economic bubbles that defined the decade begins with the tech bubble, its apex marked by AOL’s audacious takeover of Time Warner. The deal signified the heights and hope of the dot-com boom, a chapter that saw the

Top 30 at Goldman Will Get Stock, Not Cash, as Bonus - NYTimes.com

Top 30 at Goldman Will Get Stock, Not Cash, as Bonus - NYTimes.com: "Goldman Sachs announced on Thursday that its top executives would forgo cash bonuses this year and that it would give shareholders a say in determining compensation......While Goldman will give shareholders a say on pay, the bank would not be required to bow to its investors wishes. Still, a vote against Goldman would be deeply

Paper Probes Fed Nightmare — Inflating Away U.S. Debt - Real Time Economics - WSJ

Paper Probes Fed Nightmare — Inflating Away U.S. Debt - Real Time Economics - WSJ: "Some fear that inflating the nation’s debt away is the path of least resistance for political leaders who can’t make the hard choices on taxation and spending....For those who detest inflation–and that’s most economists and policy makers–the bad news comes first. The paper says a review of the U.S. experience

New York Fed to hear new theory on financial meltdown Dec. 8

Anjan Thakor is a financeprofessor from Washington University in St. Louis.New York Fed to hear new theory on financial meltdown "Thakor says it is important to determine the root causes of the financial crisis in order to prevent it from happening again. 'We had this double fragility in the financial system from high borrower and bank leverage....To get at root causes of the current crisis and

Two fast points on the 50% tax on British Bank bonuses

Two fast points on the 50% tax on British Bank bonuses:City tells Darling: your super-tax is pushing us out of Britain | Business | The Guardian: "City minister, Lord Myners, spent this afternoon calling the heads of all major banks in the City to try to reassure them about the tax, which is being introduced immediately, bankers reckoned there would be a race to circumvent the rules by raising

Mexico's oil hedge

Mexico Has Hedged Oil for 2010 at $57 a Barrel (Update2) - Bloomberg.com: "Mexico spent $1.172 billion to buy oil hedges for 2010, covering a possible revenue shortfall if production falls for the sixth straight year and prices don’t recover from about a five-year low.Mexico purchased put options that give it the option, not the obligation, to sell its oil for $57 a barrel next year, the Finance

Steven Colbert on the Fed---FUNNY

Hilarious!


The Colbert ReportMon - Thurs 11:30pm / 10:30cFed's Deadwww.colbertnation.comColbert Report Full EpisodesPolitical HumorU.S. Speedskating


HT to Clusterstock.

Testosterone link to aggression may be all in the mind : Nature News

Testosterone link to aggression may be all in the mind : Nature News: "Women who received testosterone made significantly higher offers than those who received placebo — an average of 3.9 money units compared with the placebo group's average offer of 3.4 money units.'In the socially complex human environment, pro-social behaviour, not aggression, secures status,' says Michael Naef, an

U.S. Homeowners Lost $5.9 Trillion Since 2006 Peak, Zillow Says - Bloomberg.com

Wonder why the economy is slow? Consider these numbers from Zillow and Bloomberg:U.S. Homeowners Lost $5.9 Trillion Since 2006 Peak, Zillow Says - Bloomberg.com: "U.S. homeowners have lost about $5.9 trillion in value since the housing market peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow.com.Almost half a billion dollars was wiped out this

Even Warren Buffett makes some investment mistakes

We all make mistakes, some investments don't work like we hope, even Warren Buffett does not bat 1000.Change in Management at a Berkshire Unit Encounters Snags - NYTimes.com: "At NetJets, the returns have been disappointing — and lately the losses severe. Through his investment company, Berkshire Hathaway, he bought the private jet travel business, which caters to the affluent, for $725 million

Change in Management at a Berkshire Unit Encounters Snags - NYTimes.com

We all make mistakes, even Warren Buffett:Change in Management at a Berkshire Unit Encounters Snags - NYTimes.com: "At NetJets, the returns have been disappointing — and lately the losses severe. Through his investment company, Berkshire Hathaway, he bought the private jet travel business, which caters to the affluent, for $725 million in 1998. Even though Berkshire does not provide detailed

Free candy?

YouTube - The gift economy | Marketplace Dept. of Behavioral Economics: "A generous candy stash raises a co-workers status, but sometimes the rules of exchange get confusing. Behavioral economist Dan Ariely uses his Predicably Irrational insights to help Marketplaces Eve Troeh understand social norms and social contracts"

Unbanked and underbanked

The FDIC issued a report today that shows that many Americans do not have access to banking or choose not to use the banking system.First the results:From FDIC.gov: An estimated 7.7 percent of U.S. households, approximately 9 million, are unbanked. These households do not have a checking or a savings account.... In addition to the

Report: Many minorities shun banks - USATODAY.com

Report: Many minorities shun banks - USATODAY.com: "Nearly 30 million households have no bank account or have one but also use alternate financial services at least occasionally, according to the FDIC report. The survey, the FDIC's first in-depth study of the issue, was conducted by the Census Bureau.The problem is most acute among minorities: 53% of African-American households and 43% of

Pirates float an equity issue

Yes it is now possible (in some parts anyways) to buy stock in the Pirates! No, not the Pittsburgh Pirates. The Somali pirates of course. They have floated shares. (got to love the bad pirate humor!)From the Marginal RevolutionWho says there's a credit crunch? Somali pirates are raising money through a local equity offering: In Somalia's main pirate lair of Haradheere, the sea gangs have

Buy stock in the pirates. No Not the Pittsburgh Pirates, the Somali Pirates

Marginal Revolution: Who says there's a credit crunch?: "Who says there's a credit crunch?Somali pirates are raising money through a local equity offering: In Somalia's main pirate lair of Haradheere, the sea gangs have set up a cooperative to fund their hijackings offshore, a sort of stock exchange meets criminal syndicate."

Marginal Revolution: Who says there's a credit crunch?

Marginal Revolution: Who says there's a credit crunch?: "Who says there's a credit crunch?Somali pirates are raising money through a local equity offering: In Somalia's main pirate lair of Haradheere, the sea gangs have set up a cooperative to fund their hijackings offshore, a sort of stock exchange meets criminal syndicate."A great teaching example, but come one, a tad illegal?

Hostile takeovers on from MarketPlace

Hostile takeovers on Vimeo: "We all know what a takeover is. That’s when one company agrees to be bought by another. But what happens when companies don’t agree and the takeover goes hostile? Senior Editor Paddy Hirsch explains."Hostile takeovers from Marketplace on Vimeo.

SSRN-Short Seller Trading in Companies with a Severe Accounting Irregularity by Jap Efendi, Edward Swanson

So at least some people can identify accounting regularities! Will discuss in class.SSRN-Short Seller Trading in Companies with a Severe Accounting Irregularity by Jap Efendi, Edward Swanson: "We find that shorts establish significant positions more than a year before the average restatement announcement, those positions increase as the announcement month approaches, and the largest positions

SSRN-Social Capital and Community Economic Development in Los Angeles Koreatown: Faith-Based Organizations in Transitional Ethnic Community by Hyunsun Choi

Maybe it does pay to pray. (and not just like you are thinking!)SSRN-Social Capital and Community Economic Development in Los Angeles Koreatown: Faith-Based Organizations in Transitional Ethnic Community by Hyunsun Choi: "Between October 2002 and October 2003, a spatial analysis of U.S. census records and the Korean Business Directory was performed to clarify the distribution of the Korean