We've Had Some Budget Cuts

Yes, like most state schools, Unknown University had had some budget cuts - about 10% so far from the original budget. So these three strips by Scott Adams were pretty funny. A bit close to home, but funny.

One of The Best Explanations of the Credit Crisis I've Ever Seen

Every once in a while you come across an explanation that makes you realize that just really aren't all that good a teacher. Here's another one to add to the pile. In this video, Marketplace Senior Editor Paddy Hirsch gives one of the best explanations of CDOs and how they contributed to the current credit market woes that I've yet seen:


He's also got some other videos up on YouTube that I'll post in the next couple of weeks.

Happy Thanksgiving

Here's wishing a Happy Thanksgiving to you and yours from the Unknown Family. We've got a great, great many things to be thankful for - job, family, health, living situation, etc...). For now, we're off to the Unknown Sister-in-Law's house to engage in some extreme eating - three sisters in the family, and all (and Grandma, too) are great cooks.

Now go overdose on Tryptophan.

(Bad) Governance at The University

For good corporate governance, it's important that the independent directors on the board are really independent. In particular, they shouldn't have business relationships with the company other their board service. If they did, it would make it hard for them to rein in the CEO, for fear that they'd lose the business.

There's been tons of work on this topic both in the academic and practitioner literatures. But I haven't seen much on similar relationships for universities. I'm sure that a lot's been done- I just haven't seen it.

Until now.

There's a good illustration in the Boston Globe of directors at Suffolk University (actually, trustees, which serve a similar role for a university) with significant business ties to the school. It turns out they just awarded the University president a 2.8 million dollar pay package. Of course, there were "good reasons" for doing so. Here's the lede from the story:

Boston lobbyist Robert Crowe was key among the Suffolk University trustees who made David J. Sargent the highest paid university president in the nation in 2006, with a $2.8 million compensation package. Less than a year later, Sargent renewed a $10,000-a-month contract with Crowe's lobbying firm to represent Suffolk's interests in Washington.

This month, as controversy flares over Sargent's pay, the job of publicly defending it falls on George Regan, himself a new appointee to the Suffolk Board of Trustees as well as the beneficiary of a $366,000 annual contract with the university.

Read the whole thing here.

Is this necessarily a bad thing? Not really - it could be perfectly innocent, and it's not surprising that trustees of a university might have significant business ties to the university. After all, they tend to be prominent alumni with a long history with the school. But, when you have those ties, a pay package like that is going to get far greater scrutiny than it would otherwise. Or as Ricky Ricardo would have said, "they got some 'splainin to do".

As an aside, if you want to see some excellent examples of affiliated directors in the corporate world (along with other examples of bad governance), there's no better place to go than Michelle Lederer's Footnoted.org. She's made a career out of scouring through company documents to find some truly outrageous examples of corporate mis-governance.

I think the president of Unknown University considered having some trustees with business ties to the school, but we didn't have enough money to pay the required graft.

All The Monty Python You Could Ever Want

At this point in the semester, we're all tired, frustrated, and looking towards the end of the term. So things that make us laugh become even more important. Luckily, there's now a Monty Python YouTube Channel. Here's the announcement from the MP boys themselves:

For 3 years you YouTubers have been ripping us off, taking tens of thousands of our videos and putting them on YouTube. Now the tables are turned. It's time for us to take matters into our own hands.

We know who you are, we know where you live and we could come after you in ways too horrible to tell. But being the extraordinarily nice chaps we are, we've figured a better way to get our own back: We've launched our own Monty Python channel on YouTube.

No more of those crap quality videos you've been posting. We're giving you the real thing - HQ videos delivered straight from our vault.

What's more, we're taking our most viewed clips and uploading brand new HQ versions. And what's even more, we're letting you see absolutely everything for free. So there!

But we want something in return.

None of your driveling, mindless comments. Instead, we want you to click on the links, buy our movies & TV shows and soften our pain and disgust at being ripped off all these years.

Website: http://pythonline.com

For the lawyers, here's the disclaimer:

Warning- clicking on the link can result in hours of time wasted, a skewed perspective on life, and adoption of British accents.

Now go and enjoy.

HT: Barry Ritholtz.

The NYU Finance Department Has a Blog!

NYU has one of the largest and best finance faculties around (most surveys place them squarely in the top 5 programs in terms of research output). It turns out that they now have a blog: Stern Finance.

It looks pretty promising. Although it's less than 2 months old (the first post was made on September 26), it already has a lot of high-quality content, with participation from a pretty large nuimnber of the faculty. Just this last month, it has posts by Viral Acharya, Marti Subramanyam, Edward Altman, and Joel Hasbrouk among others).

It's definitely one to add to your feed reader.

I've Had Deans Like Catbert

Mark Cuban Charged With Insider Trading By SEC

Mark Cuban, HDnet founder and owner of the Dallas Mavericks was just charged with insider trading by the SEC. The commission alleges that Cuban received a call from tje Mamma.com CEO about a pending PIPE offering of Mamma's stock. The call was supposedly prefaced by a disclaimer from the CEO that the information was confidential. The SEC complaint alleges that Cuban then used this insider information to sell all his Mamma.com shares in after-hours trading, thereby avoiding a loss of about $750,000. In case you're interested, here's a link to the complaint.

It should make for an interesting case. Cuban has the resources to fight this thing pretty much as far as he wants (even potentially all the way to the Supreme Court), and is definitely stubborn enough to do exactly that. He's already posted a response to the complaint on his blog:

Mr. Cuban stated, “I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

Not surprisingly, Stephen Bainbridge has a very thorough legal analysis of the issue. After all, it's in his wheelhouse.

In the meanwhile, I have SAS programs to run and papers to write.

Weird Happenings on My Feeds

In the last few days, I've noticed big fluctuations in my feed readership along with a lot of strange things on Bloglines: all of a sudden, 200 new posts are listed for one blog or another. Is this happening to everyone, or just to me because of the last few political cartoons I posted?

A Churchill Quote Relevent to the Current Economic Crisis

Compliments of Newmark's Door

In fact, my favorite Churchill story is the one about the time that Churchill was standing at the urinal in the men's room of the House of Commons. Atlee came into the room and stood at the urinal next to Winston's. Churchill looked up at him, zipped up, moved a couple of urinals farther down and resumed his business. "Why Winston, I had no idea you were so modest.", said Atlee. "It's not modesty, Prime Minister. It's only that every time you find something that is large and functions well, you try to nationalize it, and I thought it best not to take a chance!".

What will they nationalize next?

The Financial Crisis From A To Z

Tunku Varadarajan at Forbes has a pretty clever piece titled "The Financial Crisis From A-Z". Here are a few of the items that tickled my fancy:

C is for Credit Default Swaps, defined for me by a Wall Street watcher as: Risk whatever you want, and we insure it; risk too much, taxpayers insure it.

L is for leverage (a means of maximizing your losses), liar loans, Lehman (pronounced "lemon")--and the losses/liabilities that unite them all.

M is for where it all started: the mortgage (which, aptly, means death-pledge). Like the dog, it comes in a variety of breeds, "sub-prime" being a cross between a pit bull and a chihuahua.

Q is for quants, who forgot that, every so often, past performance is no indicator of anything at all.

S is for securitization, the process by which one passes off cat food as caviar.

The other 21 letters are pretty good too. Read the whole thing here.

HT: The Big Picture.

New Blog

As a new blogger, Financial Rounds benefitted from a number of higher-profile bloggers mentioning it. So, I think it's important to pay the favor forward and highlight new blogs of note.

The latest new one is a put out by The Applied Portfolio Management Program at Washburn University.

Unlike other academic blogs, this one is unique in that material is contributed both by faculty and by students in the program.

Go check it out, and add them to your feed reader - it's been added to the blogroll. And if you come across any other ones, drop me a line.

Professor Time vs. Grad Student Time

That reminds me - I have to check up on my grad assistant to see how he's doing on the assignment I gave him at the beginning of the semester.

Great Source For Financial Information

The student-managed investment fund class I teach is fortunate to be in a trading room with a lot of resources - because of a prominent alumni, we have access to everything from analyst reports to trade and quote data. But for those who don't have these resources, check out Tickerpedia - it has analyst forecasts, recommendations, SEC filings, a neat chart of ratios from various sources, and much more.

It's interesting how much the reported ratios change by data source. As one example, for GATX corp, the reported operating margin (trailing 12 months) ranged from 18.92% (reported on Reuters) to 46.7% (on Marketwatch).

HT: Jim Mahar at Finance Professor

I Am Who I Am

Quick Summary:

Julian & I peddled out of Portland a month ago, parted ways in Arcata, Cali, and I finally made it to the Bay area! And here's the first pic of me ever on this blog. That's Julian on the left. Notice the roadkill hides on his bike. Julian's bike is a fixed gear 1-speed, believe it or not.

Right now I'm actually in Petaluma at my cousin Annie's house. Petaluma is 40 mi north of San Fran. Annie happens to be a nurse at the same hospital in San Fran where my friend Grace's kidney-donation surgery happened. So Annie gave me a ride down there & back here.

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SALEM, OREGON

Starting in the rain, Julian & I cycled from Portland to Salem, first, where we visited Jose (my friend who rode to Wyoming with me) and his parents & sisters. Then we visited my old friend Jerry Garcia, his wife Lynn, & their 4 kids. Yes, Jerry lives! Jerry Garcia's my friend's actual name. And, no, the guy on the left isn't him. Well, it's a picture of a Jerry Garcia, anyway. I hadn't seen Jerry for some 19 years, since we were in the Peace Corps in Ecuador. I had thought it might be awkward seeing him after so long, but it was as if we'd parted only yesterday.

I've included a pic Jose took around Salem (right). He's a fine photographer.

EUGENE, OR

After Salem, we biked southward to Eugene (left). We

foraged zillions of heavenly hazelnuts & apples. In Eugene we visited my friend Jai, whom I hadn't seen for 8 years! Again, it seemed like we'd only been parted since only yesterday. We hung out at her house while we explored Eugene. Eugene has changed over the years. It has joined the usual anal-retention (retaining waste) trend & become the land of locked dumpsters. Jai also took us to Quaker meeting with her husband, Gra.

FAERIE LAND

As Julian & I peddled south, we decided to stop in at Nomenus Radical Faerie Sanctuary (below, left) in Wolf Creek. The first guy we met, Lopi, was so friendly & welcoming. He told us we were just in time for dinner, insisting we eat, and invited us to stay in a camper trailer on the land. We felt so at home it was totally heart-warming. There are about 6 people living there now. Out of all the intentional communities I've ever visited, this one was the most freely giving & so full of love. Truly a sanctuary. They expected nothing from us.

ASHLAND, OR

After 3 days there, we headed to Ashland. We visited my friends Frank & Sara, whom I hadn't seen in 10 years! They have 2 kids now. After leaving their house, we heading out of Ashland, & saw a sign at the university for a free film on Darfur along with a free lunch. As we looked for it, we biked right into a free bicycle clinic, where Julian got his bike fixed up! The folks there invited us to a potluck that evening, & also offered us a crash pad at the bicycle coop. At the potluck I happened to run into my old friend, Trevor, and an old acquaintance, Stevia, both of whom I hadn't seen in 6 years! Trevor & Stevia were gnomes from my tree-sitting days. Again, magical synchronicity, small world! My head was swimming from all the nostalgia of long-lost friends on this trip, as well as all the magic synchronicities.

Oh, yes, we saw the film on Darfur (in the region of Sudan) the next day. I had not realized before that a major holocaust (like what happened in Rwanda) is happening right now in Darfur! Our media doesn't tell us shit.

INTO CALI

Julian & I peddled on to highway 96 toward Arcata. By this time we were eating lots of fresh roadkill - several squirrels and a juvenile doe - all incredibly delicious. I kid you not. The venison tasted way better than prime beef - not a bit of that usual gamy venison taste. (Yes, I might be vegan if I used money, because the animal industry is treacherous. In a previous blog entry I talk about the ethics of eating meat & hunting & gathering & such). We started tanning the hides with acorn water.

We continued through the Hoopa Valley Indian Res (right). That route is paradise. The Yurok we met there were really friendly, and a bit different by looks & personality than the Navajos in the Four Corners area I'm used to. They seem way more affluent than either the Navajo or Lakota. The Yurok joke that they are called Why You Are Okay.

We decided to take a 20-mile dirt road "short cut" from the res toward Arcata, & we ended up pushing our bikes uphill the first 10 miles, over a high pass! My front tire exploded on the way down the other side. Fortunately, I was carrying extra nearly-new tire & tubes I had dumpstered. In Arcata we camped in the redwoods near the university. We saw a wonderful presentation by the Beehive Collective.

In Arcata, Julian & I decided to part ways. Julian wanted to stay & find a ride to LA, ASAP, & I wanted to pick up peddle speed so I could get to San Fran by the time of Grace's surgery.

2000-YEAR-OLD GIANTS

I biked down 101, then down the Avenue of the Giants. I camped under a couple-thousand-year-old redwood. The beauty was overwhelming. But this small bit of preserved redwood forest is surrounded by clear-cuts, which is heartbreaking.

The banking & housing crisis fills me with hope. I hope it means we stop building more houses, McMansions this nation surely does not need. Another depression, as hard as that seems, perhaps will remind us again to take only what we need & to share, like we all supposedly learn in kindergarten.

As I rode through the redwoods, That common feeling cropped up again, and I thought, "I don't know how I could be more wealthy."

I rode into a visitor center, with campgrounds, where some hiker-bikers came over to greet me. They were ruffians like me. They were hanging tight for the next few days, saying it was going to rain hard. I was tempted to join them, but I surely wanted to get to San Fran soon, rain or shine, so off I peddled.

I stopped at some almost-done apple trees. A local man & his mother saw me foraging & brought me the hugest apples I'd ever seen, & gratitude flooded over me.

CELEBRATING HALLOWEEN WITH ROADKILL & KENDRICK

On Halloween day, a friendly biker named Kendrick caught up with me & we rode together. Like me, he'd been biking all over the northwest the past few months. He was from Bakersfield, Cali. After a bit, Kendrick stopped to write a letter, & I biked on.

I found a freshly-killed doe & stopped to cut a huge chunk out of its rump - food for many days. As I rode on, Kendrick caught up with me again. We decided to camp together that night. He cooked up some quinoa & I cooked up venison with vegetables, wild fennel & other spices. A sumptuous roadkill feast for Halloween! Kendrick said he'd never dreamed he'd be eating roadkill, amazed how delicious it was.

That night the monsoon started. Next morning I said goodbye to Kendrick & biked on in the rain. It monsooned for days, my whole trip to Petaluma. A test of endurance. One of those nights I was grateful to find an abandoned house to sleep in.

Ah, more gratitude as I gorged on concord grapes from the droves of vineyards.

And it was a sense of triumph when I finally peddled into Petaluma to my cousin Annie's house, & gratitude seeing her smiling face when she came home from work late that night.

KIDNEY CONTROVERSIES

I didn't make it to San Fran before Grace & Rick (her recipient) went into surgery. But I was glad to hear she had lots of friends there as support. I spent 3 days there with her & Rick, and got to see my friend Jesse, too, as well as meeting their other three friends (they are all part of the "Jesus Christians" team in the US. I traveled with Grace, Jesse, & Simon last Spring). They feel like family. I'm glad I spent time with Rick, too, getting to know him more. He's overjoyed with his new kidney.

There has been controversy about many "Jesus Christians" ("JC's") donating kidneys. Some people thinking the JCs are a cult and kidney donation is coerced. Even somebody I know wanted to contact Grace & convince her to change her mind.

Grace's mother was there, and Jesse was filming a documentary on it all. He asked Grace's mother if she felt like Grace had been coerced. She said, "By all means, no. Grace and I have talked about this for 8 months and it is totally on her own volition and desire." To those who are opposed to many of the JCs donating kidneys, maybe I could get you in contact with Rick, the recipient, and you can explain to him what a horrible thing it is.

Anyway, I'm hoping to see my "Jesus Christian" friends again within the next few days.

I AM WHO I AM

I put "Jesus Christian" in quotes because, really, I see them as my friends, as humans, not as any denomination. But I sort of wish they didn't call themselves anything, because just their noble actions say who they are. Denominations (labels, names) divide. Imagine if we saw everybody as human beings rather than as ideas, rather than as organizations & memberships & nominations & religions & diplomas & bank accounts & ID cards & possessions.

What if all I had to prove who I Am is simply I Am Who I Am? The world always wants to know by what authority you do anything. The world wants to see memberships, ID, diplomas, records, possessions. People talk about identity theft. What? How can your identity can be stolen if it is real? The world system doesn't see humans, just ideas, grudges, past records, future promises. The world system sees only ego, never reality. But Reality simply sees I Am Who I Am. I Am Who I Am is the Only Reality. There is nothing else.

On this moneyless path, I used to call myself a "Sannyasi" or a "Sadhu". But it was pretension.

What if the only help or recognition I wanted from people was not because of a name I put on myself, or an office I take on, but simply because I am human, not special above anybody.

What if I refuse to go to war or refuse ownership simply because I Am Who I Am, not because I am a Quaker or Amish or Buddhist or Hindu or Christian? What if you give me assistance, not because I call myself a monk or wear special clothes, but simply because I am human, just like the bag lady pushing her grocery cart?

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What if we became as Nature, and our rain & sunlight fell freely, without charge, on both the just and unjust alike, with zero distinction?

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I lost my ID last spring, & it brought me new liberation, new understanding - despite all the restrictions (getting harassed by cops, often getting refused use of internet, barred entry through many doors). All I have for ID is I Am Who I Am. Nobody sent me but I Am. There is no other Name Holy under heaven. There is no other way, no other truth, no other life:

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I Am Who I Am

Post Election Analysis From South Park

Compliments of South Park. Hey - I suspected it was an insidious plot of some kind all along.

Caution - may not be safe for work, unless you can close your office door and turn the audio WAY down.

A Joke For The Science Nerds

Apropos of nothing:

Heisenberg gets pulled over by the cops for speeding. Cop walks up to his care and asks,"sir, do you have any idea how fast you were going?"

Heisenberg replies, "no, but I know exactly where I am."

Don't ask me why - I just thought it was funny.

Update: if you haven't managed to get your geek on, click here (hey - a couple of people asked, and I'm nothing if not accommodating).

Can I Bwing My Mommy? Puh-Weeze?

A new student (I'll call him SnowFlake from now on) walked into my office last week asking for advice on classes. He'd transferred to Unknown University from a private school (which, by the way, has a reputation for drastically inflating grades). He needed some advice on which classes to take, and since I'm listed as his advisor, I seemed like the right person to check with. But he also wanted some advice on how to study since he's flunking intermediate accounting, and "that's never happened in any of my classes before".

SnowFlake starts out by blaming the instructor (who, by the way, is one of the best in the college). After some questions and comments on my part like "Gee, that doesn't sound like Professor X at all. Are you sure?", it turns out that he hadn't been keeping up with the work, and hadn't worked more than a problem or two from the end of chapter material. Instead, he tried to cram for the first exam, and did poorly. Since that strategy worked out so well on the first exam, he decided to try it once more on the second exam for good measure. Lo and behold, the same approach yielded the same result (funny how that happens).

So, I gave Snowflake some standard advice on how to study, and then he asked if he could set up a time early this week to set up his classes for the next semester. We set a time (Monday morning at 10), and then came the kicker:

He asked if it was alright if his MOTHER came to the appointment.

I managed to keep my jaw off the floor, since he was a second-semester junior, and if you have hover-moms, they usually get cured of it by sophomore year (and they're almost non-existent in Business schools). But since I couldn't think of anything else to say (other than "You'll be all right once they drop", which didn't seem prudent at this juncture). I said, "Well, Precious, that's entirely up to you".

Monday morning comes around, and I'm running late for our 10:00 a.m. appointment. So, I have the secretary leave a note on my door saying I'd be a few minutes late, and hurry in to the office with visions of MomZilla running loose in the hallway and going on a rampage in the Dean's office.

I get there five minutes late, and there's no sign of either Snowflake or MomZilla. I hang out in my office for a few hours just in case, and it seems like a larger-than-usual number of faculty seem to filter by my office (they keep me off the beaten path, which is probably a good thing). I guess after hearing about Mom coming in, they just couldn't resist sneaking a peek.

In any event, I get a call late that morning from SnowFlake informing me that he had to be in traffic court that morning, had completely forgotten, and wanted to reschedule.

I guess I should have had his Mom remind him.

We Voted

The Unknown Family just went to the polls and voted. Unknown Son went into the booth with me, and Unknown Daughter went in with the Unknown Wife. We let our kids fill out the ballots (they were paper ones), and then feed them into the machine.

It's pretty cool explaining how our political system works to an 8 year old and a ten year old. This year, I think I'll start working through the Declaration of Independence, the Constitution, and the Bill of Rights with them - it's never too early, and most people (myself included) don't know enough about these foundations of our country.