Experience Stern | News & Events

Excerpt from American Banker -- "The proliferation of settlements in an array of financial markets in recent years makes it clear that banks must show they have made credible and persistent efforts to keep their people in line. They must be able to demonstrate that they have organized themselves into proactively watchful and compliant organizations, with thousands of middle managers who are well trained, motivated and rewarded for spotting and fixing trouble before it happens. This functional approach to controlling behavior is the essence of the much-discussed cultural issue in banks."

Excerpt from Financial Times -- "Relative share price movements also contain useful information. Viral Acharya and his colleagues at NYU’s Volatility Institute have convincingly argued that the extent to which a given bank’s share price falls on days when the broader stock market declines is a decent proxy for the riskiness of the bank’s specific business model and mix of assets. On down days, safer banks should fall less than fragile ones."

Excerpt from TechCrunch -- "'Uber is [among] the first real-world disruption with digital technology,' [Sundararajan] said. He contrasts this with Facebook, Google and Twitter which weren’t directly upending any existing business model the way Uber is. He points out the employees at all of these companies come from the same talent pool, but Uber must deal with a lot of different issues as it establishes itself because it’s taking on an existing business."
 

Excerpt from The New York Times -- "My advice in terms of long-term investing is still to try to have an allocation of your assets in various parts of the world... Trying to predict and buy stocks in companies that have a good long-range future is going to be much harder because the companies come and go. Investing in technology companies would look like an obvious thing to do, but they are not investments that you can make with the confidence that they'll be good for five or ten years."

Excerpt from The New York Times -- "Social targeting was supposed to replace demographic targeting, but that has not happened. Social media is just another media platform. It’s not re-shaping the business the way we thought it would."
 

Excerpt from Bloomberg -- "China has a banking sector which is in need of a lot of help. If you think about what we worry about in the US, we worry about our banks being too big to fail. But in China, the banks are already state owned. There is no possibility that they will fail... The Volatility Institute that I run has now set up a branch in Shanghai called The Volatility Institute at NYU Shanghai. We have translated the whole website into Chinese. It's got loads of Chinese assets in it and it's getting a lot of attention. And it talks about which are the weak banks in China and what could be done."

Excerpt from The Australian -- "Michael Posner, a former State Department human rights official in Barack Obama’s first term, said the detailed accounts of physical and emotional abuse inflicted on prisoners by the CIA would have 'longstanding consequences in terms of reinforcing the need for oversight of the intelligence agencies'."

On Monday, December 15, the NYU Stern Center for Business and Human Rights and the United States Council for International Business (USCIB) co-hosted an open dialogue on President Obama’s recently announced National Action Plan on Responsible Business Conduct.

Excerpt from The Wall Street Journal -- "Working with University College London economist Áureo de Paula and New York University economist Vishal Singh, Mr. Hong used the Homescan data to examine another bubble, in rice. This started in late 2007 when India, worried about food security, banned rice exports. Fears of shortages emerged and panic buying ensued. The U.S. didn’t face a rice shortage, but prices still shot higher, and people started to hoard. Costco Wholesale and Sam’s Club even started rationing bulk purchases."

Excerpt from Financial Times -- "One piece of advice for prospective MBA students: quickly learn which items on your to-do list are critical and which ones can take a backseat. This is not to say the MBA lifestyle is pure stress. Amid all the casing, networking and thank-you note writing there are some really exciting opportunities in B-school land. You suddenly have a network of outstandingly bright peers with whom you can enter case competitions, design products, build companies and more."

Excerpt from The Economist -- "The most elegant solution comes from Joshua Ronen, a professor at New York University. He suggests 'financial statements insurance', in which firms would buy coverage to protect shareholders against losses from accounting errors, and insurers would then hire auditors to assess the odds of a mis-statement. The proposal neatly aligns the incentives of auditors and shareholders—an insurer would probably offer generous bonuses for discovering fraud. Unfortunately, no insurer has offered such coverage voluntarily. New regulation may be needed to encourage it."

Excerpt from The Huffington Post -- "There is now a strong literature suggesting that at some point, finance largely becomes extractive, while remaining at the same efficiency level. Thomas Philippon finds that the cost of financial intermediation has not fallen in 30 years."

Excerpt from Marketplace -- "While many Americans have stabilized their balance sheets, Thomas Cooley, a business professor at NYU’s Stern School, said young people have staggered under the weight of growing student debt. 'That’s a constraining factor in their ability to and their willingness to take on mortgage debt and more auto loan debt and so on,' he said."

Excerpt from Forbes -- "NYU Stern School of Business professor and sharing economy expert Arun Sundararajan explains the importance of this trend, 'As the scale of peer-to-peer expands. . . society needs new ways of keeping consumers safe and of protecting workers. . . Governments need to understand and embrace this ongoing transition rather than impeding it, realizing that society’s interests are best served if they wield regulatory power to proactively partner with or delegate responsibility to the platforms.'"

Excerpt from CNBC -- "For firms like Facebook, China presents two risks. First, not only does the Chinese market remain a very difficult one to crack, but favoritism toward domestic firms could quickly reappear if the firm is too successful... Second, in answering the siren call of 1.3 billion potential users, the firm risks alienating its global user base."

Excerpt from MSNBC -- "'Increasingly, platforms like these are going to be the source of creating new work,' which could create tension between states or cities with tougher or looser regulations, Sundararajan said. 'It will be a conversation of "do we want to constrain the platforms in the interest of consumer protection or do we want them to let them flourish in the interest of work creation?"'"

Excerpt from LinkedIn -- "But last night, I was reading an enlightening book, The Righteous Mind: Why Good People are Divided by Politics and Religion, by Jonathan Haidt. I thought the book was about the politics of the left and right, but it’s more about how we make any type of important life decisions. From a hiring perspective, the big 'aha' moment for me was that people are programmed to make instantaneous intuitive judgments for just about everything and then look for evidence to justify them. According to Haidt and his years of research, it’s at the core of our evolutionary human nature. Given the fact that intuition drives reasoning, I offer the following techniques for preventing bad hiring decisions due to the impact of first impressions."

Excerpt from Salt Lake Tribune -- "The desire for parking in a private garage or driveway appears to trump other so-called 'smart growth' choices, putting residents of the wider Salt Lake Valley at odds with urban land-use trends now gaining national popularity. Smart growth strategies include higher density development, reduced use of land and water, neighborhood designs that encourage walkability and access to public transit."

Excerpt from Bloomberg -- "The austerity measures worked. In fact, Greece has a balanced budget. It even has a surplus, so that worked very well. The real problem is that people are very unhappy that their incomes have declined. There is a five-year recession and there is a lot of support for an opposition party, which, given the intricacies of the parliamentary system in Greece, might have a chance to be elected in March or so. And that has, of course, slumped the market because that left-wing party doesn't have any reasonable policies."

Excerpt from Forbes -- "The Google/Luxottica partnership is a brilliant one. Google glasses speak to technology but not fashion and Luxottica’s brands speak to fashion and not tech. The partnership will result in attractive Google glasses that could be purchased based on looks alone, and the cutting edge technology can give Luxottica brands a reason for purchase that justifies a premium price. Luxottica’s glasses are increasingly being undercut on price by retailers such as Costco, TJ Maxx and Warby Parker."
 

The Urbanization Project’s Brown Bag Discussion Series brings together students, scholars, and practitioners from NYU and NYC to talk with featured guests about their ongoing urban-related work.

Excerpt from Science 2.0 -- "A recent economic model by Ben Hermalin, of the UC Berkeley Haas Economics Analysis and Policy Group, and Nicholas Economides, of NYU'S Stern School of Business, finds there is little reason to think broadband traffic congestion will improve if the Federal Communications Commission abandons net neutrality."

Excerpt from Business Insider -- "Looking back as 2014 winds to a close, I see that a lot has changed in the world economy this year. For example, there is a new perception of the role of technology. Innovators and tech CEOs both seem positively giddy with optimism. And while it is true that some wondrous opportunities may lie ahead, there are also dangers to be wary of as we look to the future."

Excerpt from Yahoo! Finance -- "Roubini predicts that global growth will increase slightly next year. He sees growth in developed economies mediocre but within emerging markets things will be very stratified—some will remain fragile (China and much of Asia), but others will do very well. 'Those that are benefiting from being importers and those that aren’t linked to China and instead to the United States,' he says. He singles out India, Indonesia and Mexico as nations that will see vast growth."

Excerpt from Forbes -- "As chief investment strategist of $1.5 billion (assets) IndexIQ (which New York Life Insurance Co. just agreed to buy) Whitelaw is attempting to replicate hedge fund strategies on the cheap with combinations of ETFs. Underlying this effort is his belief that there’s a good reason to own hedge funds: Their performance isn’t correlated with the ups and downs of the rest of your portfolio because they invest in alternative markets (or strategies) most retail investors don’t have access to."