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Showing posts from February, 2013

The Once Invincible

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Coach Arsene Wenger (above) should have a happier summer      This past Monday, Premier League team Arsenal F.C published its financial statements for the first half of the season, posting a profit of about 17.8 million pounds.      While profits from this period are just half of those from the previous period, Arsenal fans can rejoice in the fact that the reduced income is due to an increase in player investments. Over the past six months, the team brought on the likes of Lukas Podolski, Santi Cazorla, and Olivier Giroud, and the club also announced extending contracts with the talented Jack Wilshire and Theo Walcott.    Although the increase in spending is and should be considered a good thing for Arsenal as a football team, major problems still exist. The team has failed to win a trophy for seven years, and sit at fifth place in the current Premier League table, one spot away from Champions League qualification. Should Arsenal fail to qualify for the Champions League, the team would

Italy’s Political Fallout

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After the election that took place on Monday, Italy finds itself in political gridlock. The center-left, led by Pier Luigi Bersani, hold a majority in the lower house while the center-right coalition, led by Silvio Berlusconi, won enough seats in the Senate (117) to deprive the center-left of the majority it needed to govern. Beppe Grillo, a former satirist turned populist-politician, received 25.5% of the popular vote and won 54 seats in the Senate in what is perhaps the clearest demonstration of the dissatisfaction by the Italian people with the electoral system. Mario Monti, the outgoing technocrat that led the government after Berlusconi resigned in the midst of a crisis in 2011, received a lowly 10.5% of the votes for the lower house and 9.1% for the Senate, corroborating the displeasure that the public has for the austerity measures and tax hikes enacted under his government that managed to quell some of the fear ever-present in the marketplace. SX5E - Euro Stoxx 50 Index (

CREATING A TRUE SENSE OF URGENCY

I received the following email from Dennis Beresford about my previous blog posting.    In that earlier essay, I had indicated that I expected my students to study before each class as if a quiz were scheduled even though no quiz was going to be given.    I want them to motivate themselves to do the work rather than leaving the motivation up to me as the teacher.    It is their education.    They should care enough to have the discipline needed to do the work. I have long argued that students will always do much better in any class if they feel a sense of urgency.    The only question is whether that urgency needs to be externally driven or whether the students can be expected to create it for themselves.    As many of you will know, Professor Beresford served as the chairman of FASB (Financial Accounting Standards Board) from 1987 until 1997.    Since that time, he has been the Ernst & Young Executive Professor of Accounting in the J. M. Tull School of Accounting at the Terry Coll

Greenhill -- M&A Negotiation This Upcoming Thursday!

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THERE WILL BE NO QUIZ

  If you have followed my blog postings over the years, you know that I have several obsessions about teaching.    (1) – I believe in having a lot of communications with my students.   Whether it is love, marriage, or a college class, things go better with communication.    To the teacher, everything makes sense.    Too often, to the students, everything is a mystery.    I want to cut out as much of that mystery as possible.   I think students respond well when they understand what is expected of them. (2) – I believe in honest and frank communication.    College students are adults.   I never see any reason to feed them a bunch of nonsense.    If you aren’t going to tell them the truth, you would be better off not to have the communication.    I think you should stress the good as well as the bad.   No one wants to get praise all the time and no one wants to hear how bad they are all the time. (3) – I believe a lot in motivation but I think the core of motivation has to come from in

Resume & Cover Letter Workshop

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Come join Finance Society this upcoming Tuesday for a resume and cover letter workshop. Members of our executive board will be teaching you the steps of building the two professional documents. At the end of the workshop you will also have a chance for an one-on-one critique session. Bring a copy of your resume.

Conserving Capital: It All Made Sense Until He Said That EVERYONE Profits

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Conserving Capital with Kyle Cameron It All Made Sense Until He Said That EVERYONE Profits I have decided to give a central theme to my blog posts for the Finance Society from here on out.   This first post will explore the theme chosen, its centrality to finance, and the chat that inspired the idea.   Capital conservation has to be the most important topic in finance, and as such deserves a little defining.   Finance poses the question: How do I best allocate assets?   As a subcategory, capital conservation concerns itself with the logical follow-up: How do I avoid poor allocations of assets?   Indeed, capital allocation is what Warren Buffett was referring to in his quote, “ The first rule of investing is don't lose money; the second rule is don't forget Rule No. 1 ”.   However, despite the world famous investor’s reference to capital allocation as the first rule, I would argue that most people – financiers, economists, and other businessmen included – beli

U.S sues S&P

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Last week, the U.S. Justice Department’s legal suit against Standard and Poor’s Rating Services captured much public attention and gave rise to a heated debate. It is by far the first legal case against a rating agency over the cause of the crisis. The government believed that the rating giant should be accounted for its overly optimistic ratings toward mortgage-backed securities and collateralized debt obligations that misled the market and cost investors billions of dollars. Moreover, over the past few years, the government has been investigating whether the firm’s management was involved in intentionally pushing the standards lower for certain kinds of bonds, a misconduct that would potentially bring about a serious disaster for this New York based company. Indeed, before the housing bubble burst and the crisis began, most MBS’s and CDO’s were given AAA ratings because rating analysts all agreed that the investment was so diverse that it could provide investors a safe ne

REO-to-Rental

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Housing analysts have been giddy for the past year about the comeback of their industry, whose collapse led to the Great Recession. 2012 ended up being the third worst year for housing ever, but still beat 2011 and 2010. New and existing home sales, housing starts, and prices jumped in 2012; Countless experts expect an even stronger recovery for 2013. I imagine people are excited because a major housing rebound typically leads to a broader economic recovery. The logic is as more people put equity into their homes, they experience a psychological effect causing them to feel more free to spend disposable income, increasing economic activity - a phenomenon known as the “wealth effect.”   Can bullish expectations for housing actually simulate a long-awaited recovery to Main Street? The more I think about it, the clearer it becomes that it’s not being driven by the typical American families who lost their homes in the economic crash. In fact, it’s being fueled by the banks, private equ

THE LEARNING TRIANGLE

I began giving teaching presentations about 10-12 years ago.    As I have said many times, I enjoyed that experience immensely because it forced me to spend serious time thinking more deeply about my own teaching.    I cannot begin to guess the number of times in the last few years that I have asked myself: --What really happened in class today?    --Why didn’t this work? --How should I have changed what I did? --What was wrong with that particular question? --Why did the class seem unorganized? --How did I manage to confuse so many students in that discussion? All those questions eventually led me to begin writing about teaching and now I am up to over 250 pages.    And, I am still asking questions and still learning. One of the very first teaching concepts that I ever developed for myself was “the learning triangle.”    I remember standing in front of 100 or so brilliant professors one day a number of years ago in one of my very first presentations trying to explain how the learnin