Experience Stern | News & Events

Excerpt from Reuters -- "There are a number of factors why the commodities supercycle is probably over. First of all, China is slowing down. The growth rate may be as low as 6 or 7% in the next few years and the growth rate is going to be less resource intensive as they move away from capital intensive to consumer society... Additionally, we have a slow recovery in advanced economies and monetary policy is going to be tightened, however gradually. The Fed eventually is going to start tapering, eventually is going to go away from zero policy rates and that increase in short and long rates is going to soften commodity prices as well."

Excerpt from TIME -- "As crowdfunding expands, some worry that deregulation of startup investing will lead to inexperienced investors being duped into bad deals. 'That’s the flip side of opening this up to the rest of the world,' says Anindya Ghose, a professor of information, operation and management sciences at New York University who also studies crowdfunding. 'You might end up hurting a lot of people who don’t need to be hurt.'”

Excerpt from CNBC -- "It's almost impossible to value the company as it stands right now, because you know so little about the company. In fact, all we know are the revenues it made over the last 12 months. So valuation is almost impossible. But the focus of my post, which I had on Twitter, was that when you can't value the company, you can price it, price it based on what other companies are trading at. So for instance, if you looked at Facebook and LinkedIn and you looked at the revenue multiple that those companies trade at, which is about seventeen-and-a-half times revenue, you come up with about 10 billion...simplistic, but that's pretty much what pricing is. You base it on very simple metrics and numbers that you already know."

Excerpt from Financial News -- "So far, the argument against spin-offs of troublesome investment banking units has been that the banks derive too much of their consolidated profits from them and that significant capital may have to be added before allowing them to become independent. But the Amex deal showed that these issues can be resolved. And a spin-off can be beneficial to shareholders who made significant gains from the increases in the stock prices of both units. The share prices of Citigroup, Bank of America, Barclays and Deutsche Bank are, on average, still 75% lower than they were in January 2008. Their boards could do well to monitor closely GE’s proposal and keep an open mind."

Excerpt from Bloomberg -- "Is there a way that we can explain supporting Medicare while cutting Medicaid, Social Security but not welfare checks, farm subsidies but not food stamps? For readers of Jonathan Haidt’s amazing book, 'The Righteous Mind,' the answer should be 'yes.' It lies in reciprocity."

Excerpt from CNBC -- "'The U.S. is much more advanced and has much more success than other economies. The growth in the U.S. is going to be much faster than Europe, the U.K. and Japan,' Roubini said. 'Gradually the dollar is going to increase in value rather than collapse the way some dollar doomsday folks believe.'"

Excerpt from Project Syndicate -- "Around the world, policies, technologies, and extended learning processes have combined to erode barriers to economic interaction among countries. Pick any indicator: trade relative to global GDP, capital flows relative to the global capital stock, and so forth – all are rising. But economic policies are set at the national level, and, with a few notable exceptions like trade negotiations and the tracking of terrorist funding and money laundering, policymakers set goals with a view to benefiting the domestic economy."

Excerpt from Bloomberg -- "Ukraine should work with the European Union rather than a Russian-led customs union in order to boost its economy, said Nouriel Roubini, a professor of economics and international business at New York University. Ukraine’s 'macroeconomic condition is fragile' because of widening current-account and fiscal deficits and growing needs for external financing, Roubini said today at the annual Yalta European Strategy Conference on Ukraine’s Black Sea coast."

Excerpt from the Institute for New Economic Thinking -- "On September 15, 2008, Lehman Brothers filed for bankruptcy and ushered in the worst part of the recent financial crisis. Today, we still discuss whether taxpayer money should have been used to rescue Lehman. My colleagues at NYU and I have developed measures of systemic risk, and this fifth anniversary affords us a good opportunity to look at what these measures would have indicated to Treasury Secretary Paulsen if they had been available at that time. The answer is quite surprising."

Excerpt from Financial Times -- "Arun Sundararajan, a professor at NYU Stern who studies the sharing economy, said the decision was a good example of regulation nurturing innovation. 'I like that it shifts a set of responsibilities that used to be the government’s to the platforms themselves,' he said. 'This is the right direction for the digital economy.'”

Excerpt from USA Today -- "Commercial paper outstanding shrunk by 15% a month after the Reserve fund's collapse, to $1.43 billion, according to a paper written by Kacperczyk and Philipp Schnabl, then with the Stern School of Business. Financial commercial paper — the type used by investment banks and finance companies to fund their operations — plunged 30% in the wake of the Reserve collapse, in large part because money funds aggressively reduced their holdings."

Excerpt from Project Syndicate -- "We are in the process of learning how to manage growing policy interdependence without much policy coordination. The challenge is to identify policy circuit breakers that have relatively high benefit/cost ratios. Time and experience will help – that is, so long as high volatility does not destabilize many economies in the interim."

Excerpt from the Los Angeles Times -- "The Stern School of Business at New York University, Fuld's alma mater, has adapted its required course on professional responsibility in the years since Lehman's collapse. 'The crisis gives us such amazing material on how you can get terrible, terrible outcomes — sometimes not involving terrible people,' said Jonathan Haidt, a specialist in moral psychology who co-teaches the course."

Excerpt from The Takeaway -- "[Sundararajan] says the new investment in renting is fueled by the rise of the internet and urbanization, and he sees the focus on sharing as an innovative avenue of consumption with potential to expand the economy."

Excerpt from Forbes -- "Bernanke’s church in this instance is our monetary church, the institution that ordains easier money no matter what direction interest rates take or what history’s record suggests we do."

Excerpt from BBC Capital -- “'Part of the issue is that investors are starting to recognize the inherent risk in the markets — political, cultural, and economic — that makes it very difficult for foreign investors to understand these markets,' said Robert Salomon, associate professor of management and organisations at New York University’s Stern School of Business. 'They underestimate the cost and overestimate the benefits associated with investing in foreign countries.'”

Excerpt from Minnesota Public Radio -- "I think his strategy just didn't have enough time to succeed. I don't think as a strategy, in and of itself, it was flawed. One of our most successful retailers is Walmart. They have an EDLP. They've built it over a period of time. You can't build it overnight. It takes time. It takes a change in merchandise, it takes a change in brand building, all of which was leading to J.C. Penney bleeding and therefore really the strategy didn't really have a chance to succeed. Maybe in three years' time, had the company been able to have taken the losses, we would have seen a different company today."

Excerpt from Bloomberg TV -- "This was such a huge missed opportunity. If you look back at what the Gap did with Old Navy, they came in with 80% of the value of the Gap with 50% of the price. This is sort of 80% of an iPhone at 80% of the price and I just don't think that's that compelling a value proposition when you have all these other competitors who are narrowing the gap of innovation between Apple and the others, but at the same time, Apple just hasn't recognized that and lowered the price."

Excerpt from Fast Company -- "Until recently, the company has been 'using web pages and websites that people visit at a massive scale--a very sizable number of the sites people visit--and each one has some evidence for or against some particular brand,' says Foster J. Provost, a Professor of Information Systems, NEC Faculty Fellow at New York University Stern School of Business, and author of the recent book, Data Science for Business. He pioneered much of the data science behind Dstillery's operation as a member of the founding team. 'They can use both the info from the physical world and the info from the digital world, and they can use this info together to get more of a pure audience,' he says of the newly christened Dstillery."

Excerpt from The New Yorker -- “'There’s a mind-set that consumers are doing this just to save money,' Sundararajan said. 'But I think that what’s really compelling about the sharing economy is the variety and expansion of choices that it offers. Instead of being tied to owning one car, I can drive twenty different ones. So I expect this will expand consumption, rather than shrink it.'”

Excerpt from The New York Times -- “'A partnership involves people realizing that it’s their own money and it can be lost in market speculation and fines and a lot of other ways,' said Roy C. Smith, a former partner at Goldman Sachs who now teaches finance at New York University. Of course, there is a price to doing business the old-fashioned way. 'It’s a good structure if you are happy to stay a small niche player,' Mr. Smith said."

Excerpt from The New York Times -- "Mr. Coase’s work cannot be read as a case for minimal government. On the contrary, his message was more purely pragmatic: Because we can’t negotiate efficient private solutions most of the time, we must ask whether laws and other institutions can help steer us toward solutions we would have chosen if negotiation had been practical."

Excerpt from CNBC -- "'Money market funds lack safety relative to other safe instruments, such as bank deposits or Treasury bills, because they have strong incentives to take on risk when the opportunity arises but they are vulnerable to runs once the risk materializes,' Marcin Kacperczyk and Philipp Schnabl said in a money market stability study for the Stern School of Business at New York University."

Excerpt from The Daily Beast -- "Paul Volcker, who ran the Fed heroically from 1979 to 1987, was a highly effective central banker. And he spent virtually all his career as a government bureaucrat—as an official at the Treasury Department and the New York Fed. 'He was at Chase for relatively short periods earlier in his career,' said William Silber, a professor at New York University’s Stern School of Business and author of Volcker: The Triumph of Persistence. 'He didn’t spend much time in the private sector. The real experience he got dealing with financial markets was between 1969 and 1974 when he was undersecretary of the Treasury.'”

Excerpt from Marketplace -- “'It may be too soon for people to enjoy this crisis because we’re still experiencing it to some extent,' says Richard Sylla, a professor of financial history at New York University's Stern School of Business. Theoretically, he says, one might enjoy a crisis through books, movies and art, but certainly not while your 401(k) is still trying to recover."