Experience Stern | News & Events

Excerpt from Harvard Business Review -- "As many as one-fourth of all mergers and acquisitions of public companies in the U.S. appear to be the targets of undetected insider trading by investors with advance knowledge, according to a New York Times report on research by Menachem Brenner and Marti G. Subrahmanyam of New York University and Patrick Augustin of McGill University. The researchers discovered the instances of what they call 'informed trading' through a statistical analysis of stock-option movements; fewer than 5% of the deals became the subject of Securities and Exchange Commission litigation over insider trading."

Excerpt from Forbes -- "One of the very best forms of stimuli comes from looking at other industries for ideas, relevant analogies, and problem solving. The trickiest part is to figure out which industries to benchmark. That, in itself, requires brainstorming sessions."

Excerpt from Scientific American -- "That music can move us is no surprise; it’s the point of the art form, after all. What’s new here is the manner in which the researchers have quantified in fine-grained detail the cognitive ramifications of unpacked melodic compounds. This investigation of music’s building blocks may be more relevant than you suppose. Nowadays, experts in the production room can hone a track—the timbre, tone, rhythm, phrasing—with digital precision. These songwriters and producers are the true geniuses behind the success of popular music today, and they seem to have an intuitive grasp of the phenomena underlying the findings of this psychology article. An extra breath-sound here, a pitch adjustment there—these additives pepper the songs we hear on the radio. So the next time you hear a piece of music from the Billboard Top 40, it may be interesting to wonder, how many components were manipulated just so, in order to change the way I think?"

Excerpt from Marketplace -- "The argument going back 80 years ago was that this kind of financing would not otherwise have been available. So this is an area of market failure, as economists say. That's a much less compelling argument in the 21st century. Financial markets are extraordinarily sophisticated and could probably step in, so it's harder to make a case that the government has got to step in."

Excerpt from CNBC -- "We believe that trading based on inside information has negative externalities for the market as a whole and should be illegal, as it is, in many countries. Our study raises a red flag regarding activity in one area of the market, and hence, it may be worth paying more attention to the activity in the options market ahead of important corporate announcements. Does this evidence suggest that the U.S. stock markets are rigged? We do not believe so. There is possibly some rogue trading, but it does not necessarily have a major impact on M&A activity, and certainly not on the market as a whole."

Excerpt from The Wall Street Journal -- "'While the SEC has taken action in several cases where the evidence was overwhelming, one can assume that there are many more cases that go undetected, or where the evidence isn't as clear-cut,' authors of the Stern School/McGill study wrote."

Excerpt from VoxEU -- "Many important policy decisions require a consideration of costs and benefits that arise in the distant future. For example, many of the costs of climate change occur 100 or more years from now, yet actions to reduce greenhouse gas emissions have to be taken today to avert those long-run costs. In recent weeks, the Intergovernmental Panel on Climate Change mitigation report, or UN climate change report, presented and discussed different options for reducing such emissions, but contended that 'most mitigation strategies have costs in the present and yield benefits in the future. Policy making involves assessing the values of these benefits and costs and weighing them against each other.'"

Excerpt from The Economist -- "Mr Bazot calculates a unit cost for finance by comparing the sector’s income with the stock of financial assets—'the real cost of the creation and maintenance of one euro of financial service over one year'. He finds that, outside France (where it has been stable), the unit cost has increased over the past 40 years; a 2012 paper by Thomas Philippon of New York University found a similar result for America."

Excerpt from The Economist -- "A much better policy, says Mr Angel, is to 'make room'—not with a detailed master plan of the sort that gave rise to ugly artificial cities such as Brasília, but with a 'platform' that can be built upon like Manhattan’s now-famous street grid. It was adopted in 1811 and allowed the island to be developed over time. Today’s fast-growing cities should establish expansion areas that can accommodate expected growth, plan arterial roads and public spaces, and secure the rights for both, says Mr Angel. This way streets can be built and infrastructure put in as needed."

Excerpt from Big Data -- "In financial markets, a larger question for society is how we might improve market conditions for all investors and create a marketplace that is best for society. Quite incredibly, the answer is with the additional transparency through big data that are made available to all."

Excerpt from Reuters -- "America and China are the world’s two major powers, with the largest economies and militaries. The stakes are high for them to practice what they preach on foreign policy: their words and actions influence the global economy, as well as the behavior of allies and enemies. The problem: Xi Jinping and Barack Obama want to have their foreign policy cake and eat it, too. For both leaders, international engagement isn’t top of mind: they want to downplay their global leadership roles in order to focus on more pressing concerns at home."

Excerpt from Project Syndicate -- "Despite China’s widely discussed economic slowdown, annual GDP growth remains above 7%, implying little cause for alarm – at least for now. The question is whether the government’s efforts to implement structural reforms and transform the economy’s growth model are working – that is, whether internal imbalances continue to threaten long-term economic performance. Given that China remains the global economy’s most important growth engine, the answer matters to everyone."

Excerpt from The Hindu -- "Appointment of such experts on international markets (financial, commodities, and services) in key government departments would pave the way for effective policy formulation in improving access for Indian companies to global markets, attracting global capital, and mitigating the impact of global forces on the volatility in Indian commodity and financial markets due to spill-over effects, [Subrahmanyam] said."

The 15th biennial conference of the International Society for Justice Research (ISJR) will convene academics and thought leaders in the field to discuss three major themes.

Excerpt from Thomson Reuters -- "This list of top researchers around the globe have earned their distinction by publishing the highest number of articles that rank among those most frequently cited by fellow researchers."

Excerpt from Fortune -- "Peter Henry, dean of New York University’s Stern School of Business and author of the book Turnaround: Third World Lessons for First World Growth, told me last year, 'We are at a critical point in time and advanced countries are off track.' The discipline we need is not fiscal austerity but a 'sustained commitment to prosperity that is both vigilant and flexible–and values what is good for the public as a whole,' he says. It’s encouraging to see disciplined policy in democracies, as we began to see in 1994 in Brazil, Henry told me."

Excerpt from The Huffington Post -- "'There are emotional reasons for why [customers] are loyal, in spite of new information that there might be safety issues,' Erdem said. 'For example, these people may have memories of GM cars. They may remember things growing up with their families in a GM car... It's not rational,' Erdem said."

Excerpt from Forbes -- "Cooley also expects Yellen to address the slow down but not harp on it instead focusing on labor. 'Its important for people to be willing to take a more detailed look at what is happening in the labor markets,' he said. 'That is where signs of price pressure are going to show up. The great recession cast a very long shadow – particularly over labor markets. We are going to see labor markets getting better but only in small segments.'"

Excerpt from Bloomberg -- "The underwriting slowdown 'is part of an aggregation of things that is affecting Citigroup all at once,' Roy Smith, a finance professor at New York University’s Stern School of Business and a former partner at Goldman Sachs Group Inc., said by telephone. 'The effort to impose a big increase in internal controls is one that is clearly very labor-intensive.'"

Excerpt from Reuters -- "The study by professors at New York University and McGill University in Montreal - which looked at informed trading activity in equity options before merger and acquisition announcements from January 1996 through December 2012 - showed 25 percent of the deals had some sort of unusual activity taking place 30 days before the deal announcement."

Excerpt from WAMC -- "Widely recognized for research on the intuitive foundations of morality, Jonathan Haidt, Social psychologist and Professor of Ethical Leadership at New York University’s Stern School of Business, uses moral psychology to understand hyper-partisanship in American politics."

Excerpt from Yahoo! Finance -- "A new academic study by researchers at NYU’s Stern School of Business and McGill University and detailed in the New York Times found persuasive evidence of trading on nonpublic information in one-quarter of merger-and-acquisition transactions from 1996 through 2012."

Excerpt from Bloomberg -- "'This may be the first time we have seen a large number of high profile M&A deals in a low-growth environment in which countries might argue that mergers that reduce local employment should be stopped,' said Roy Smith, a professor at New York University’s Stern School of Business."

Excerpt from CNBC -- "Damodaran also alluded to regulatory risk and insurance questions that still face the company. 'In a sense, what Uber does in most cities is already illegal. So, [for a $17 billion valuation] you almost have to have the assumption that at some point in time the regulations are going to change to allow them to operate big time,' he said. 'Because if they don't change, Uber's going to have to spend a lot of money fighting these regulations in city after city to get its business going.'"

Excerpt from The Hill -- "The U.S. government's decision to relinquish its historic role in Internet governance has set in motion a transition with no clear resolution. The Department of Commerce has asked the Internet Corporation for Assigned Names and Numbers (ICANN) to "convene stakeholders across the global Internet community to craft an appropriate transition plan," but where this will lead is anyone's guess. What is clear is that the transition provides both the opportunity for, and the necessity of, undertaking a fundamental reevaluation of ICANN's accountability mechanisms."