Wednesday, July 21, 2010

FT Alphaville alternative?


One of the things I’ve come to enjoy during the last few years was FT Alphaville. It’s a nice blog with good market insights, and you could create a free FT account and sign up to breaking news, setup alerts, and my favorite, the “6am Cut”.


After running this service for free for 2 years, FT decided it’s time to squeeze some more money out of it. So for £1.25/week you can subscribe to something that used to be free. FT calls this a “terrific offer”.


The 6am cut usually does not have the full news story, it’s just a news brief. It contains links to the FT news item, and you need to be a fully paid FT subscriber to be able to read the stories anyways.


I know, nothing is free. But charging someone to show him a snippet of what he would see when he pays more, is a bit silly. I just don’t get it.


Good thing we’re living in a free society and there are other options. I just haven’t found a good alternative  yet and I’m open to suggestions. I’m sure I’ll find one. Or as Hendrix put it in Red House “if my girl doesn’t love me no more, I know her sister will”. You think WSJ will start a free daily briefing? Yeah right!

Tuesday, July 20, 2010

GOP's deficit

I was going to debut blog posting revival with an analysis on healthcare quality, but turns out while watching the Sunday morning political talk shows this got my attention.

On ABC's Meet The Press, the Sen. John Cornyn, the chairman of the National Republican Senatorial Committee made quite a blatant accusation about the budget deficit. You can read the trascript of the discussion here. Quoting Cornyn:

SEN. CORNYN: Well, let's look at a few facts. I, I, thank you for the opportunity because I wanted to respond to what Chris said. You know, in the last year that President Bush was in office, 2008, the deficit was 3.2 percent of the gross domestic product. Today it's 10 percent. Just--we just hit the $13 trillion cap on national debt, $2.3 trillion...

Apparently we are going to hear this more and more, since the same issue was raised by Mitch McConnell on CNN's State of the Union. Transcript here.

MCCONNELL: -- how long can we -- how long can the other side run against the previous administration? They've been in charge now for a year and a half. They've been on a gargantuan spending spree. They've taken, as I said, the deficit as a percentage of GDP from 3.2 percent to almost 10 percent in a year and a half.

The first argument to be raised here is obviously that the TARP money and the bank bailouts were passed during Bush's term, not Obama's, which have been the major contributor to the budget deficit. But that's not all, since they are also blatantly lying about how big the deficit was.

Also as Paul Krugman brilliantly points out, what Cornyn and McConnell refer to as the last year of Bush actually does not include the 4th quarter of 2008 which is when all the TARP and bank bailouts were passed through the congress. Also the first quarter of 2009 reflects mostly Bush policies, since the fiscal stimulus bill, ARRA, was not passed until Feb 17.

Source: BEA through Paul Krugman

Republicans are making these claims to show how fiscally irresponsible Democrats have been, and how much Republicans value fiscal austerity. Their track record however, is exactly the opposite.

The US has been running a structural deficit (i.e. the persistent component of budget deficit, as opposed to the cyclical component which comes and goes with business cycles), since Bush took office to top this off. When Bush 43 took office US had a budget surplus of 2.5% of GDP. By the end of Bush's first year in office the federal budget was almost flat, at 0.6% of GDP. We never looked back after that. At one point in 2004 the budget deficit was nearly 4%, which recovered to 1% in June 2007. When Bush left office in January 2009, the budget deficit was 5.4% of GDP, not 3.2% as McConnell and Cornyn claims. Furthermore, this deficit was not on the back of a recession and high unemployment. In fact, every Republican president since Nixon has increased the US Federal debt throughout their term.

Source: US Office of Management and Budget through Wikipedia.

How come the party that is touting less government spending and austerity is doing exactly opposite?

Monday, July 5, 2010

Time to revive

I know it's been a long time since I've last posted. Thanks for the emails reminding me of that fact. It's amazing to see interest in my blog posts almost 2 years after I penned them. I haven't been writing mainly because I'm no longer a student, although I deem myself as a perpetual one.

I will no longer be writing about business schools and finance education but about more broad subjects that reflect my interests and what's current in the finance world. I intend the new incarnation of this blog to be a logbook my journey as a perpetual student.

I'll try to categorize the posts into a few buckets. Ones I'm thinking of are: macroeconomics, politics, quant finance, risk management, technology, and others (catch all for music, arts etc., should I decide to go off-topic occasionally).

Hopefully some of my good old readers will still find this useful.

Thursday, October 1, 2009

Post MIF Answers #2 (U.S. Centric)

1) [...]My current goal is to become a CFO, is that possible?

I totally agree that LBS MiF will help you in that regard. This year has been really tough on LBS graduates. most people had to go back to their original employers, or worse yet, take a job they have not wanted. I think times are getting better though.

What I'm trying to get at is many people coming to LBS had the illusion that the degree would automatically get them a highly desirable job.

2) Do you know if the Milkrounds also include opportunities back in the US?

Very minimal. I tried being proactive and wanted to organize a career trek to the US, but I received no support from career services. Career services have targeted marketing efforts where they sit down with employers and pretty much market the students prior to academic year start. They cannot do that for the US companies, so that's why there aren't many opportunities in the US

3) Are you looking to come back to the states or stay overseas? Do you have a choice?

Not really for the time being.

In general, I think you should assume that there's 80% chance you will stay in London post-grad unless you have/make good contacts and arrangements in the US prior to coming to London. Also, LBS brand name means a lot in Europe, but people in the US are not very aware of it. Many people asked me why I wasn't going to LSE, since they think it's a better business school.

4) How does your healthcare work during the program? Since that is on every news cast here in the states these days.

Good and bad. Your entire family would have free health care, called NHS. You first register with a GP (general practitioner - like PCP in the US), then for any problems you visit him/her. The GP may direct you to a hospital to see a specialist. The service is fast, you don't wait ages before seeing a doctor. There are also a few unpleasant things about it. They don't run enough tests since they are on a limited state budget. Still pretty good.

Post-MIF Answers to some questions

I've been getting quite a few emails recently from people considering whether or not to apply / join LBS. Hope this helps.


* Once you have completed the program, could you please explain your overall opinion?

It was great. Biggest complaint was the core (mandatory) course modules in the first semester, especially if you arent into accounting and corporate finance. I wasn't. Smart people, great classes to take.

* Was the Master worthy in terms of personal experience and education received? Did you regret not to have taken an MBA from a top tier Business School

No. I already have an MBA and MIF was a 1000 times better. Just cut out all the b.s. and get down to business. Reputation wise, there is a problem though, since everyone knows LBS MBA, but not very familiar with MIF. That's not a big problem in London though. Esp. hedge funds and PE shops prefer MIFs rather than MBAs.

* Did you receive offers that fulfill your expectations, despite the current economic/financial situation?

Yes, I work for a hedge fund. I had another offer as a quant associate from a mutual fund, but I chose the hedge fund. I had found the HF prior to MIF thru networking, did a summer internship here, and worked part time during the year. School did not like it, but I didn't care. At the end I ended up with a great job. It took a lot of working, studying as well as sacrifice from the social and family life. It's doable though and I would highly recommend doing so.

* And your classmates, did they receive attractive offers as well?

Not all of them. The ones that got offers were the ones that had laser sharp focus in one area. Being a "jack of all trades" is not a good thing during market downturns. People want employees they can rely on, ones that are proven and has shown dedication to one and only one field. This effect is more pronounced when the jobs are scarce.

* Any additional positive or negative comments about the program that you would like to point out?

MIF project can be a big pain in the *ss, or it can be a great thing fr your resume. Try to make the most out of it. Get a feeling for the people first, and pick someone that is reliable