World Finance

The 50 Greatest Film Monologues

Here's something for your weekend viewing pleasure - the 50 Greatest Movie Monologues of All Time (from Film.com)

I think Pacino's in there about 4 times, and there are a lot of other big names - James Earl Jones, Mel Gibson, Morgan Freeman, etc...

Enjoy.

Markets in Receivables

Here's an interesting article in the WSJ from a while back (7/16) titled "CIT's Woes Prompt Surge In Activity At Receivables Exchange".

CHICAGO (Dow Jones)--The turmoil surrounding finance giant CIT Group Inc. (CIT) is driving a surge in new business for a New Orleans-based company that runs a market in receivables.

The Receivables Exchange, which lets small- and mid-sized companies auction their accounts receivable to buyers that include hedge funds and commercial banks, on Wednesday recorded its busiest day ever and is fielding a flood of calls from businesses searching for financing alternatives.

"These people want to do their own underwriting and do their own credit determination," said Justin Brownhill, co-founder and chief executive of The Receivables Exchange, or TRE.

Events this week have shown that "they can't rely on others like CIT to do it," Brownhill said.

New York-based CIT, among the biggest U.S. lenders to small and mid-sized businesses, disclosed this week that it could face bankruptcy and won't be able to get help from the U.S. government.

The company is among the biggest names in the factoring marketplace, a $125 billion sector that functions as a middleman for short-term financing - paying vendors for goods up front and collecting full payment from retailers later.

It's a pretty neat example of how markets can be used as a solution to an old problem. Factoring companies have been around for quite a while, but typically dealt with firms with working capital needs on a one-to-one basis. Exchanges like these allow those companies to better diversify their portfolios and reduce their risk. At the same time, since it makes for multiple bidders, it could also extract some of the factoring companies' surplus and transfer it to firms selling their receivables (i.e. they get a higher price for their receivables).

Read the whole thing here (online subscription required, unless you find it through Google News).

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Research Love/Hate

I love doing research. Actually, I like finding out new stuff. But sometimes the research process makes me rue the fact that I work on a dry campus.

Like this week.

I've been working on a paper where I needed to update the data on. Since the latest version was a rush job put together for a conference (yes - this happens a lot), I decided to go back and check every line of my program (always a good thing to do). I also wanted to do the anal-retentive (I know, that's redundant. - except in research, where it's expected) thing where I can relate what happens to my sample at each filtering step. While doing this, I found out that I'd used the wrong data code for one of my variables - one of my MAIN variables. So, the whole data set was, in a word, crap.

After taking a deep breath, I made the corrections and redid most of the analysis. Luckily, the results still held, with minor modifications.

Then I discovered a minor discrepancy in the number of observations at one step. It's likely not very important at all. But I need to track it down before I go further. So, since my coauthor reads the blog, he'll just have to wait another day or so. But I'm getting close, so I should be able to finish my part of the work and ship it off to my coauthors in another day or two.

Then a coauthor on another paper told me that she'd found an error she made in her coding. In this case, when she found and corrected her error, it quadrupled our sample size. If you're an empiricist, you know how much an increase from about 90 observations to about 400 means. If not, let's just say it's a big deal to the alpha nerds among us (and that description applies to most of my friends).

So, like most days in the research salt mines, there's some good and some bad.

Now about that "dry campus" thing...

The Ideas Report

I just came across an interesting new blog: the Ideas Report for Serious Investors. It's put out by the Manual of Ideas (a for-fee service) and obviously) geared towards investing. However, it ranges pretty far afield. Check it out.

Advice From A Journal Editor

Here's a very interesting and informative piece titled "Edifying Editing" by R. Preston McAfee (former co-editor of AER and editor of Economic Inquiry). It's not entirely applicable to finance because he's an econ guy. But there is a great deal of similarity between the fields. Here are a few things that stuck with me:

He cites a paper by Dan Hamermesh (1994), who discovered that, conditional on not receiving a report in 3 months, the expected waiting time was a year. So, if you want to endear yourself to editors and you're a reviewer, get stuff done quickly. I know that the longer I wait on a referee report, the less I feel like punching it out.
Around 25% of the to AER during his tenure were rejected due to poor execution. That is, the paper represented a good start on an article worthy topic, but provided too little for the audience. I recently was discussing a former student (and current coauthor) with a friend of mine who edits a pretty good journal. His comment was that my friend does good work, but "needs to finish his papers". Unfortunately, my friend often sends papers out to journals to get feedback from referees. That's what colleagues are for.
He feels like a a surprising number of papers provide no meaningful conclusion. Don;t merely reiterate your introduction in the conclusion. The introduction is to motivate a problem and summarize your results, and the conclusion is your opportunity to tie things together and make some parting shots.
He feels that submitting a paper where the editor has deep expertise usually produces a higher bar but less variance in the evaluation.

All in all a very worthwhile read. So read it here.

HT: Marginal Revolution

Things You Wish You Could Write On Students' Papers

Here's a pretty good list of things I wish I could write on some students' papers, from Sapience Speaks. #6, while harsh even for this list, is my favorite. Feel free to add your own in the comments.

"You certainly have a way with words. A long, long way."
"You seem to be attempting a very delicate approach to the assignment--so delicate, in fact, that you fail to touch on it at all."
"Every one of the words in this sentence is utterly devoid of meaning."
"I can't help feeling that you treat the ideas in your paper much as a black hole treats its neighboring star systems: forcefully and vigorously synthesizing them, you condense them beyond recognition, leading to utter destruction and chaos."
"like the broad swift stream / a thesaurus will go far / but yields no great depth."
"This paper isn't even bulls*&t. Bulls*&t has substance. This is diarrhea."
"I find your rhetorical strategy in this expository to be similar to that of a rhinoceros in extracting a tooth: large, blunt, and wholly ineffective."
"This entire page says exactly NOTHING."
"Every teacher wishes she could read a paper like this one. It makes the rest of her life so much brighter by contrast."
"As I was reading, I felt that you were trying to include in your paper every type of fallacy possible. If so, you only missed one."
"The level of disorganization in your paper suggests that your true topic must be chaos theory, not, as your title implied, Wordsworth."
"the wind speaks all day / yet with only empty breath: / you have no thesis"
"I'm not sure even you believe this sentence."

Robert Shiller on Charlie Rose

Here's an interesting interview of Yale finance professor Robert Shiller on the Charlie Rose show. The early part of the clip is an interview of Winston Churchill's grandson - it's also interesting (I'm a Churchill fan), but if you want to skip it, Shiller starts around 14:15.