It's Not FAAAIIIIRRRR!

I'm probably beating a quickly dying horse, but I couldn't resist. The other day, I was talking with a colleague about the Occupy Wall Street issue, and came down on the side of the protesters, saying that the distribution of wealth in our country wasn't "fair" (actually, they said "equitable", but they pretty much meant the same thing. So, I brought up another colleague's Business Law class where if the students used the word "fair" in an answer, they automatically lost points.


Fair is one of those words that seems to mean so many different things to different people that it's practically useless in conversation except as a rhetorical tool. When the Unknown Daughter was seven, we decided to expunge the use of the "it's not fair". The Unknown Wife and I told her that we didn't want to hear it, and whenever she uttered the phrase, she'd just have to "put it in THE BOOK". THE BOOK was a little journal with her name on it and the title "It's Not Fair". Whenever she used the forbidden phrase, she had to write it down as "It's not fair that______". She looked at the book, thought a minute, smiled at me, and wrote one (and only one) entry in the book: "It's not fair that they're my parents". She's pretty much never used the phrase since (yes, I have a remarkable daughter).

To close, let me give you two sites to peruse. In the first, We are The 99 Percent, the Occupy Wall Street Crowd posts their grievances, and in the second, We are the 53 Percent, some others post their responses. Feel free to chime in on either side.

Honey, I'm Home (With a Jab at Occupy Wall Street)!

Financial Rounds went dark over the summer - I spent the time working on research, playing with The Unknown Wife and The Unknown Kids, and riding my bike. But now, I'm back. At present, I'm working madly to make some last minute changes to a paper to be presented at the FMA (Financial Management Association) annual conference in Denver. I'm doing it at the last minute (as usual), so I can't post much right now.

But this video pretty much screamed out for attention. It's a great parody of "The Times They Are A Changing", by Bob Dylan - one of the classic songs of my youth. It takes some pretty good jabs at the "Occupy Wall Street" crowd (not that that's all that hard), and points out how much capitalism has improved almost everyone's lot over the last century or so. Embedding seems to be disabled, but it's SFW, so click on the link and enjoy.

Here are the lyrics (See if you can spot the reference to the classic economics essay I, Pencil) :

Come gather round people
come and join your hands
we're taking Wall Street
and we're making demands
and we're heeding the call
and we're crying for help
only 1% of us have wealth

but first we need posters
we need to make signs
but to do so it seems
that we need some supplies

We need poster board
I can't make it myself
but it's 10 cents a sheet
at the store it's on sale
an example of economies of scale
it's so evil

They're saying that freedom
has done little to stop
Corporations from keeping
the wealth at the top
But at what point in history
would a kid and a king
both have clean water to drink?

George Washington was
the richest man of his age
But he lost all his teeth
at a very young age
Because they didn't have Scope
and they all crapped in trays
we're not wealthy?

now there's fountains on streets
from which clean water pours
Four dollar generics
at all big box stores
a sultan and student
both have iPhone 4s
it's not fair

Come gather young people
come on everyone
and I'll tell you a tale
of a fortunate son

He's born in a country
and given vaccine
and rendered immune
to all kinds of disease
the Kardashians are on
all his TVs
it's not perfect

Banks don't need bailouts
on that we agree
so let's start up a group
and let's take to the streets
because if we do that then
you know what that means
we're racist.

HT: Ace of Spades

Man Bites Dog and Couple "Forecloses" on Bank

Here's a classic role reversal story - a couple foreclosed on a bank! It started about five months ago when Bank of America attempted to foreclose on a Florida couple for non-payment of their mortgage.

The problem was, they'd paid cash for the house. So they went to court, and eventually won (they showed that they'd never had a mortgage with BOA).

The judge awarded them legal fees, but after five months, BOA somehow never got around to paying the judgement.

So, the couple's attorney got the sheriff, seized their assets and padlocked the bank branch building. The attorney gave instructions to remove assets like computers, desks, copiers, and any cash in the tellers' drawers. After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

Talk about turnaround.

Read the article here.

update: It wasn't technically a "foreclosure" on the bank - it was actually a default judgment for unpaid legal fees and court costs. But close enough for the irony.

How Much IS A College Degree Worth?

Here's an interesting chart from Lifehacker. It shows the median salaries (along with the 25th and 75th percentiles for various majors. It's taken from a report created by the Georgetown University Center on Education and the Workforce called "What’s it Worth? The Economic Value of College Majors"

Here's an interesting part from the press release Georgetown put out:

The top 10 majors with the highest median earnings are:
Petroleum Engineer ($120,000); Pharmacy/pharmaceutical Sciences and Administration ($105,000); Mathematics and Computer Sciences ($98,000); Aerospace Engineering ($87,000); Chemical Engineering ($86,000); Electrical Engineering ($85,000); Naval Architecture and Marine Engineering ($82,000); Mechanical Engineering, Metallurgical Engineering and Mining and Mineral Engineering (each with median earnings of $80,000).

The 10 majors with the lowest median earnings are:
Counseling/Psychology ($29,000); Early Childhood Education ($36,000); Theology and Religious Vocations ($38,000); Human Services and Community Organizations ($38,000); Social Work ($39,000); Drama and Theater Arts, Studio Arts, Communication Disorders Sciences and Services, Visual and Performing Arts, and Health and Medical Preparatory Programs (each at $40,000).

This isn;t surprising - with the exception of Pharmacy (which is also pretty rigorous and exacting), they're all fields that require a lot of math. To quote classic Barbie, "Math is Hard!". So there's a smaller supply of grads (and there's a pretty good demand for these grads, too).

One 50-Miler down -- More To Come

I finished my 50 miler, and in fairly good shape, too. It took just about 3 hours 20 minutes, which is a bit more than I expected.

I'd hoped to take it easy for the first 30 miles or so, but there were a couple of hills (one at 5 miles, and another another at 17 1/2) that were pretty stiff. Since my heart rate was up to 160 by the top of each hill, I knew I was in for a long ride. Then, to add insult to injury, there was another hill at about 30 that felt like I was riding up a telephone pole for about 2-300 yards. Oh, what fun.

Ah well - next year I'll know to spend a lot more time working on hills beforehand (it's flat enough near Unknown University that I don't see a lot of hills unless I want to).

The legs aren't too bad right now, but I can tell tomorrow will be a real treat.

Next stop - a century!

Another Good Ride

I did a 34 mile ride today - my longest so far this year. I've been using a heart monitor for a couple of years, and every year, it takes me a while to realize that I should pay attention to it - when I keep my pace slow enough in the early miles that my heart rate stays below 135 or so, a couple hour ride becomes pretty easy.

About time - my ride for the Hole in the Wall Gang Camp is only 7 days away.

Stick A Fork In Me!

I'm done, done, DONE with grading for the semester. Now there's nothing left to do but wait for the complaints. Ah well - that I can deal with.

For a reward, I spent the night spent reading an anthology of short stories titled Strange Brew by P.N. Elrod (author of the Vampire Files). It includes stories by some of my favorites, including Jim Butcher, Patricia Briggs, and Charlaine Harris, among others (what can I say - I'm a big fantasy/sci-fi nerd).

On the biking side, there's been nothing but rain for the last few days, so I went to the gym to use the exercise bike for about 40 minutes. It's a poor substitute for having wheels on the road, but my 50 miler (the Angel Ride) is only 11 days ahead, so it's better than nothing.

Enough goofing off - back to research.

Update: The rain stopped, so I got in another 26 miler. I rode like a circus bear on a bike, but I was still within a minute of my best time, so I'll take it. The good news is that I seem to be able to handle at least that distance at a pretty good pace even on an off day. So, with a bit more work, I should be able to do the 50 if I dial back a bit. It won't be pretty, but it's a ride, not a race.

It's Time To Bring The Crop In

It's that time of the semester - exams are done, projects are in (with one exception) and it's grading time. Some highlights/low lights:

• My Student Managed Investment fund was a weak group, and they never seemed to "get with the program". As a result, they did a lot of the work for the end-of-semester presentation to our advisory board in the 11th hour.
  
• Having said that, they did a pretty good job in the presentation. Not as good as last year's group (that was probably my strongest group in the last 5 years), but good enough
• My Investments class did terribly on my final exam. On the one hand, it means that grades will be lower than expected. On the other, since grades will depend a lot on the curve, it allows me a lot of flexibility.
• I have THREE students that will be returning for my student-managed investment fund class next semester (they're three of the better ones, too). This makes my job a lot easier.
  

On non-job related things, I'm mostly trying to put in enough miles on my bike so that I'll be ready for the Hole In The Wall Gang Angel Ride. It's a relatively hilly 50 miler, and, while I'm pretty sure I can finish it, it'll be ugly. So, I'm trying to squeeze in a few more 25-30 milers in the next two weeks. It's a good cause (check out the link above.).

Unfortunately, yesterday involved a pretty hard 26 miler followed in short order by my 1 1/2 hour "Yoga For Stiff Guys" class (fairly strenuous yoga done in a heated room). BY the end of the day, I was beat to the bone.

Oh well - back to grading those last few student projects.

FMA Decisions Are Out!

I just heard from a coauthor - we got a paper accepted at the Denver FMA meeting in October. The idea resulted from taking an idea we'd been working on and applying it to another data set we had available.

It's funny - we submitted two papers: this one was an early version, and the other was pretty much finished. However, to be fair, the results on this one were more interesting. And since we'd already gotten one paper on the program, we were actually glad we got the second one rejected - doing two papers at a conference means there's less time for catching up with friends.

This tale of two papers reminds me of a piece I read a while back (unfortunately, I can't recall its title). It discussed how there's a trade-off in research between "newness" and "required rigor". In other words, if you're working on a topic that's been done to death (e.g. capital structure or dividend policy), you'll be asked to do robustness tests out the yazoo. On the other hand, if it's a more novel idea, there's a lower bar on the rigor side, because the "newness" factor gets you some slack on the rigor side. .

In general, however, the "rigor" bar has been ratcheting up for the last 20-30 years, regardless of the "newness" factor. To see this, realize that the average length of a Journal of Finance article in the early 80s was something like l6 pages - now it's more like 30-40. As further (anecdotal) evidence, a friend of mine had a paper published on long-run returns around some types of mergers in the Journal of Banking and Finance about 9 years back. They made him calculate the returns FIVE different ways.

In any event, to make a long story short, I'm hoping we got accepted at FMA because the reviewers though our paper was a good, new idea.

But it's probably because we got lucky.

But either way, we'll take it - see you in Denver!

Journal Of Undergraduate Research In Finance

There's a new journal out geared towards undergraduate research. It's called (appropriately), The Journal of Undergraduate Research In Finance. Here's it's description:

The Journal of Undergraduate Research in Finance publishes original work written exclusively by undergraduates. Accepted articles are largely the result of the highest quality senior or honors theses. Articles come from all areas of Finance, case studies and pedagogy. All articles are subject to blind review by faculty.

The JURF exists to encourage exceptional undergraduate students to pursue high quality research in Finance, to provide these students with an outlet for their research, and to prepare these students for success in graduate school or industry. To maintain a focus on contributions made by the students, faculty involvement is limited to the guidance typically given during the writing of a senior thesis. Initial submissions must be made while the author is an undergraduate student.

The JURF is published annually.

So, if you have a student who has done some good research and who might be looking for an outlet, have them send it in - the submission deadline for this year's edition is May 15. As an added inducement, the top three articles for this year's issue will be invited to the FMA meeting in Denver to present their research, and will be considered for the annual Mark J. Bertus prize (in the amount of $1,000).