Experience Stern | News & Events

Excerpt from The Wall Street Journal -- "'Many companies are repeating some of the mistakes of the past,' by taking on too much debt, said Edward Altman, a New York University business school professor and the creator of a well-known tool for measuring corporate health, called the Z-score. Mr. Altman said his latest forecast, which measures the probability of corporate defaults, showed overall corporate health was 'no better than it was in 2007 and by some measures worse.' The median scores, which measure corporate financial health by analyzing a combination of liquidity, earnings, solvency and stock market valuations, were 4% lower for companies rated 'junk' in 2012 than in 2007."

Excerpt from The Globe and Mail -- "A study some years ago by David Dunning and Justin Kruger found that most people, regardless of their level of competence with a skill, perceive themselves to be better than average. And it gets worse. This concept doesn’t include those people who boast about their impressive writing skills but are in fact downright terrible writers. These folks may be suffering from 'Dunning-Kruger effect.' The same study found those who are the least skilled tend to rate their abilities higher than others. The worse they were the better they thought they were."

Excerpt from Forbes -- "Evolution is all about competition, and the dramatic effects that competition has on the structure and behavior of organisms over time. But here’s the key idea: competition occurs at multiple levels simultaneously, and the winner at any one level generally succeeds by suppressing destructive forms of competition at the level below."

Excerpt from Marketplace -- "The traditional runway show may not be cost effective for many designers who can’t afford not to turn it into a branding event, according Scott Galloway, a marketing professor at NYU’s Stern School of Business. 'I think brands have realized that and are trying to figure out a way to spread some of that fabulous across their customer base via social media,' Galloway says."

Excerpt from The Wall Street Journal -- “'You can accuse me of being too pessimistic in my assumptions, but the narrative that underlies my valuation is an optimistic one,' Mr. Damodaran said in a blog post summarizing his findings. 'I am assuming that Tesla will grow to be as large as Audi, while delivering operating margins closer to Porsche’s. Even with these assumptions, I cannot see a rationale for buying the company at today’s market price, but that is just my personal judgment.'”

Excerpt from Economic Times -- "Raghuram Rajan is first and foremost a sharp observer of economies. Raghu's interests and understanding of global finance extend beyond his immediate research focus, which is on banking and corporate finance. In particular, Raghu has always been interested in the growth of economies and the institutional and political features governing law and policymaking that lead to or preclude such growth. What is perhaps Raghu's forte is connecting dots in a manner that reflects unusual depth and common sense."

Excerpt from Treasury & Risk -- “'It’s my experience that failure prediction models have done fairly poorly when it comes to financial institutions,' Altman said. 'It always seems that the latest banking crisis is caused by something fairly unique to the current situation and not necessarily correlated with prior bank crises.'”

Excerpt from TheStreet.com -- "'The possibility of truly privatizing them isn't there,' says Lawrence White, professor of economics at NYU's Stern School of Business and author of Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance. Fannie and Freddie were once credible institutions with great human capital but all of that has gone now, he says. That ship has sailed. The blow to their reputations has been too great for either [agency] to exist as their former selves."

Excerpt from CNBC -- "...Power Pitch panelist Luke Williams, Executive Director of the Berkley Center for Entrepreneurship and Innovation at NYU Stern Business School, was concerned about the startup's competition. 'I'm not sure if this is an app that other people can easily do...I'm not sure if the system that's behind this is actually making it all work and making it differentiate on the market.'"

Excerpt from The Wall Street Journal -- "Yakov Amihud, a finance professor at New York University’s Stern School of Business, says, 'When market liquidity is expected to be lower than normal, expected return should be higher than normal. This may apply for Rosh Hashana.'”

Exerpt from LiveMint -- "At the V-Lab in New York University’s Stern Business School, we estimate the capital needs of banks in future stress. We use market data to assess the downside risk of banks and assess their gearing in a stress scenario by comparing their book liabilities to market value of equity after taking account of the downside risk. Our estimates suggest that in the event of a minus 40% correction to the global market over a six-month period, as seen in the Great Depression and the Great Recession, publicly traded Indian banks and financial firms will require over $80 billion of equity capital to maintain a market equity ratio of 8% relative to their assets."

Excerpt from Bloomberg TV -- "The thing I’m watching for, or I think the most interesting event is Apple’s launch of a discount phone – the 5C. They’ve effectively been relegated to the high-end market. Apple became the largest market cap company on the backs of one unbelievable phenomena. They became the low-cost producer at the premium price; the biggest market share, lowest price. That would be like if Ferrari had the market share of Toyota – that’s a very powerful cocktail…"

Excerpt from Bloomberg TV -- "They registered pretty substantial market share gains, Microsoft Windows phones this quarter. That's the good news. The bad news is the number 4. That's their market share. So it's 80 - 14 - 4. Android, iOS and then Microsoft Windows-powered phones. But they do have a foothold in the market now."

Excerpt from The Huffington Post -- "In a paper to be published in Psychological Science, we propose that another way to influence people's behavior towards protecting the environment is to emphasize the long life expectancy of a nation, rather than its imminent downfall. ... If people perceive their country or planet's remaining time to be very short, then they rationally shouldn't place too much importance on making these present-day sacrifices. But if a long future is seen, sacrifices today for a brighter tomorrow for ourselves and our offspring make more sense."

Excerpt from the LA Times -- "'This is the first stage of something more profound, which is the ability of people to structure their lives around doing multiple sharing-economy activities as a choice in lieu of a 9-to-5, five-day-a-week job,' said Arun Sundararajan, a professor at New York University. 'This is technology-driven progress,' he said. 'This is what it's all about.'"

Excerpt from Livemint -- "What should perhaps come as a surprise is that until recently, the investor view and pricing of India’s currency and markets hardly seemed to reflect the ground reality. The expansion of monetary base due to unconventional central bank policies in the Western economies, especially in the US, found its way readily into the Indian debt and equity markets. These flows, however, abruptly reversed themselves since the announcement in May of the potential tapering of the US Federal Reserve’s expansionary policies. The sentiment on India has since turned bearish, its asset and currency markets have suffered quick and massive depreciations, and its structural weaknesses for generating future growth have all of a sudden come to the fore."

Excerpt from Details -- "'If you're a Brazilian billionaire, moving money offshore into a Manhattan apartment is a good idea,' says Stijn Van Nieuwerburgh, the director of the Center for Real Estate Finance Research at NYU Stern School of Business. 'The market hasn't peaked yet. It's a stable currency. And these foreign investors aren't looking for a 5-to-7-percent return on their investment. It's a trophy asset, a luxury good.'"

Excerpt from Advertising Week -- "Pick a company and a business superstar that resonate with you. It's like becoming a loyal fan of a rock star. Create a virtual shadow of these entities and learn everything you can so you will be ready when it's time to be introduced."

Excerpt from Project Syndicate -- "In the United States, three sources of policy uncertainty will come to a head this autumn. For starters, it remains unclear whether the Federal Reserve will begin to “taper” its open-ended quantitative easing (QE) in September or later, how fast it will reduce its purchases of long-term assets, and when and how fast it will start to raise interest rates from their current zero level. There is also the question of who will succeed Ben Bernanke as Fed Chairman. Finally, yet another partisan struggle over America’s debt ceiling could increase the risk of a government shutdown if the Republican-controlled House of Representatives and President Barack Obama and his Democratic allies cannot agree on a budget."

Excerpt from The Washington Post -- "William Baumol, who is, amazingly, still an active economist at age 90 and just released a book on these very issues, realized in a series of papers in the 1960s (many coauthored with future Princeton President William Bowen) that industries that didn’t see productivity increases might still see costly wage increases. 'The insight that Baumol and Bowen had was that there are some industries where productivity growth is very likely and some where it’s not,' Robert Archibald, an economist at the College of William & Mary, explains."

Excerpt from The New York Times -- "Ms. Quinn was standing beside a woman who had faced much more harrowing situations – Lindsey Melki, an Army veteran who flew a Black Hawk helicopter in Iraq in 2007 and 2008 – to announce what she would do as mayor in her first 100 days in office to help veterans. 'We have not done enough — the Bloomberg administration has not done enough," Ms. Quinn, a Democrat, said. Among her proposals was creating a 'welcome home' center in Times Square that would offer counseling, medical, job and housing services for veterans, as well as satellite support centers in each borough. Ms. Melki praised the idea of having a 'one-stop shop' to help veterans navigate the services available to them."

Excerpt from WIRED -- “'We need to clearly understand how the sociology of sharing evolves,' says Arun Sundararajan, a professor at New York University’s Stern School of Businesses whose recent research focuses on the sharing economy. Sundararajan says that the act of sharing a possession such as your car or apartment changes the meaning of that thing."

Excerpt from NPR -- "Americans are big believers in equal access to opportunity and letting outcomes fall where they may if there's a level playing field. And right now there isn't a level playing field and I think the statistic that captures it best is the fact that if you're born in the United States in the top 25% of the income distribution, you have an 85% chance of going to college. If you're born in the bottom 25% of the income distribution, you have an 8% chance of going to college. That is not equal access to opportunity. In the private sector, if we want to be a country that continues to grow, then we've got to take joint responsibility and the private sector ought to say, 'Gee, we've got a role in actually making higher education more accessible to the masses in order to level the playing field, because, again, the key equalizer is education. That's what transforms people's lives."

Excerpt from Marketplace -- “'There is a constant exchange in a very small group of people who tend to actually increase the prices,' Serdari says. 'We have alligator bags that have hit the market that go as high as $130,000, which is absurd.' Soaring prices are driven by a strong demand from luxury consumers in Asia, Serdari says."

Excerpt from Bloomberg -- “'There are some patterns in currencies that are very similar to what I have seen in other markets, such as the way the price-fixings’ effects disappear so often by the following day,' said Rosa Abrantes-Metz, a professor at New York University’s Stern School of Business, whose August 2008 paper, 'Libor Manipulation?,' helped trigger the probe into the rigging of benchmark interest rates. 'You also see large price moves at a time of day when volume of trading is high and hence the market is very liquid. If I were a regulator, it’s certainly something I would consider taking a look at.'”