We do our best in the Unknown Household to give the Unknown kids a classical education -- Bugs Bunny, Tom and Jerry, Popeye, and (as soon as I get the DVD) The Three Stooges.
They're still getting the hang of practical jokes. But I'm trying to do my part.
Tonight Unknown Son, Unknown Daughter, and I planted a LARGE (and very realistic) rubber cockroach in the middle of the kitchen floor. Unknown Wife was blissfully aware, talking on the phone with her mother, with her back to us. The kids peeked around the corner and were barely able to keep quiet as they waited for things to unfold.
Unknown Wife didn't disappoint. The scream was priceless, and made the kids' night. Looks like they'll have something to tell their new friends in school tomorrow (today was the first day).
Like I said, a classical education.
Don't Say These Things If You Want Sympathy From Your Professor
Professor Steve Dutch (U of Wisconsin - Green Bay) offers a list of some things you might not want to say to your professor if you expect ANY sympathy. Think of it as a TOP TEN list with a few bonus items:
The full piece has a lot of comments after each line that explain WHY they're not particularly good things to say. All in all, it gives a pretty good picture of your professors' mindsets.
Since classes just started (and I'm at a new school), this looks like a pretty good candidate for the first thing I put up on my door.
HT: Newmark's Door
- This Course Covered Too Much Material...
- The Expected Grade Just for Coming to Class is a B
- I Disagreed With the Professor's Stand on ----
- Some Topics in Class Weren't on the Exams
- Do You Give Out a Study Guide?
- I Studied for Hours
- I Know The Material - I Just Don't Do Well on Exams
- I Don't Have Time For All This (...but you don't understand - I have a job.)
- Students Are Customers
- Do I Need to Know This?
- There Was Too Much Memorization
- This Course Wasn't Relevant
- Exams Don't Reflect Real Life
- I Paid Good Money for This Course and I Deserve a Good Grade
- All I Want Is The Diploma
The full piece has a lot of comments after each line that explain WHY they're not particularly good things to say. All in all, it gives a pretty good picture of your professors' mindsets.
Since classes just started (and I'm at a new school), this looks like a pretty good candidate for the first thing I put up on my door.
HT: Newmark's Door
This Week's Carnival of The Capitalists
This week's COTC is up at The Business of America is Business, compliments of our host Professor Starling Hunter. He's hosting for the second time in a month (talk about a glutton for punishment). He's got a great format for this week's Carnival - he starts with the question each article answers. As usual, here are my picks of the week:
Dan Melson of Searchlight Crusade answers the question Why Is There Money in Fixer Properties?Here's the usual disclaimer: My tastes are probably different from yours. So look around - There's always lots of good stuff at a Carnival.
Debt Free provides The Three Strategies to Maximize Your Financial Success.
Ben Stein Punts One on Management Buyouts
I almost always enjoy reading whatever Ben Stein's writes - he's an old school kind of guy who generally hits most nails he aims at right on the head. But I got a kick out of his recent New York Times piece where he rails against the injustice of Management Buyouts (MBOs). Unfortunately, the reason I got a kick out of it is that his arguments are both over the top and incredibly off base.
He mentions MBOs in the same breath as segregation and housing discrimination, and says that "...by every standard I can see, they are yet another sad sign of how our corporate trustees have lost their moral compass."
Read the full piece here (Note: online subscription required)
The basic premise behind his screed (and I think it's an appropriate word) is that it's wrong for management to use their private information to buy up corporate assets on the cheap.
I have at least a couple of problems with his analysis:
First, what evidence I've seen on MBOs seems to show that the stockholders of the parent company make out about as well when a division is taken private in an MBO as they do when the division is sold to a third party (i.e. in an arms-length asset sale). So, managers on average seem to offer shareholders the same deal as they would have gotten elsewhere.
Second, I think Stein is guilty of "cherry picking." He may not be aware of it, but his cases are most likely not a representative sample. He gives some examples of MBOs where the management made a huge profit. However, the appropriate metric would be the returns for ALL MBOs, not just the successful ones.
Third, even if MBOs on average are extremely successful, the managers doing them bear a huge amount of risk. They typically take large equity stakes in these firms, and therefore end up holding an extremely undiversified position. If the MBO fails, they stand to lose what often represents a major portion of their personal wealth. And as we all know (at least, if we've taken an introductory finance class), bearing higher risk should be compensated by a higher expected return, or people won't take the risk.
Finally, in MBOs, managers typically pay a premium above the current perceived value of the division. And the shareholders APPROVE the deals (or at least the board of directors does). A evidence, the abnormal return to the firms selling the division are positive in most cases (and are statistically quite significant). If managers are making such a killing, it should show up in the returns to the parent company. It doesn't. And if it' such a good deal for the managers, why doesn't another firm swoop down and outbid them?
All in all, a disappointing piece, and not up to Stein's usual standards.
Oh well, everyone has an occasional off day. He does so many things so well that I guess he's due for one, too.
Update: For further commentary on the topic, be sure to read what Equity Private (Going Private) and Larry Ribstein (Ideoblog) have to say.
As usual, they say it better than me (damn!)
He mentions MBOs in the same breath as segregation and housing discrimination, and says that "...by every standard I can see, they are yet another sad sign of how our corporate trustees have lost their moral compass."
Read the full piece here (Note: online subscription required)
The basic premise behind his screed (and I think it's an appropriate word) is that it's wrong for management to use their private information to buy up corporate assets on the cheap.
I have at least a couple of problems with his analysis:
First, what evidence I've seen on MBOs seems to show that the stockholders of the parent company make out about as well when a division is taken private in an MBO as they do when the division is sold to a third party (i.e. in an arms-length asset sale). So, managers on average seem to offer shareholders the same deal as they would have gotten elsewhere.
Second, I think Stein is guilty of "cherry picking." He may not be aware of it, but his cases are most likely not a representative sample. He gives some examples of MBOs where the management made a huge profit. However, the appropriate metric would be the returns for ALL MBOs, not just the successful ones.
Third, even if MBOs on average are extremely successful, the managers doing them bear a huge amount of risk. They typically take large equity stakes in these firms, and therefore end up holding an extremely undiversified position. If the MBO fails, they stand to lose what often represents a major portion of their personal wealth. And as we all know (at least, if we've taken an introductory finance class), bearing higher risk should be compensated by a higher expected return, or people won't take the risk.
Finally, in MBOs, managers typically pay a premium above the current perceived value of the division. And the shareholders APPROVE the deals (or at least the board of directors does). A evidence, the abnormal return to the firms selling the division are positive in most cases (and are statistically quite significant). If managers are making such a killing, it should show up in the returns to the parent company. It doesn't. And if it' such a good deal for the managers, why doesn't another firm swoop down and outbid them?
All in all, a disappointing piece, and not up to Stein's usual standards.
Oh well, everyone has an occasional off day. He does so many things so well that I guess he's due for one, too.
Update: For further commentary on the topic, be sure to read what Equity Private (Going Private) and Larry Ribstein (Ideoblog) have to say.
As usual, they say it better than me (damn!)
New (To Me, at Least) Corporate Governance Blog
I've just added a new blog to the blogroll - Institutional Shareholders Services (ISS) Corporate Governance Blog.
ISS is one of the major players in the corporate governance world. They're best known for their role in advising shareholders in the proxy process, but also have their fingers in a lot of other corporate governance-related pies. They've been blogging since February of this year, and have a lot of interesting stuff up there. Give them a look (I've already found some good stuff for my classes).
ISS is one of the major players in the corporate governance world. They're best known for their role in advising shareholders in the proxy process, but also have their fingers in a lot of other corporate governance-related pies. They've been blogging since February of this year, and have a lot of interesting stuff up there. Give them a look (I've already found some good stuff for my classes).
The Economics of Oral Sex
Sorry, I just couldn't resist. Tim Harford (author of The Undercover Economist) has a great way of applying the principles of economics to topics you'd never expect. In his latest Slate column, he uses economics to explain the recent rise in oral sex among teenagers:
And you thought econonomics was boring.
HT: Alex Tabarrok at Marginal Revolution.
Read the whole thing here.Now, there is no shortage of explanations: Perhaps everyone just thought that if it was good enough for Bill Clinton and Monica Lewinsky, it was good enough for them. But an economic explanation would instead start with the premise that this is a response to changing incentives.
And you thought econonomics was boring.
HT: Alex Tabarrok at Marginal Revolution.
Summer Is Dwindling
The last days of summer are dwindling away. I spent most of the day taking care of writing my syllabi for the fall term (we don't start classes until next Wednesday, so there's still time). I have two "new preps" (i.e. classes I haven't taught before). Unfortunately, one of the classes I'm teaching has two sections (I take one, and another faculty takes the other), so there are co-ordinations issues. In other words, we have to agree on a common syllabus. So, everything takes longer.
I knocked off work at 3 and drove the 10 minutes to get home. The neighborhood had a talent show, and about a dozen young kids (all under showed 12) strutted their stuff their stuff -- everything from Country Karaoke to a coronet solo to "Irish Dancing" (the Unknown Daughter) to joke telling (the Unknown Son).
Kind of a nice ending to the summer (they start school Tuesday).
And yes, I do live in a neighborhood that's straight out of Leave It To Beaver land.
I knocked off work at 3 and drove the 10 minutes to get home. The neighborhood had a talent show, and about a dozen young kids (all under showed 12) strutted their stuff their stuff -- everything from Country Karaoke to a coronet solo to "Irish Dancing" (the Unknown Daughter) to joke telling (the Unknown Son).
Kind of a nice ending to the summer (they start school Tuesday).
And yes, I do live in a neighborhood that's straight out of Leave It To Beaver land.
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