Weekly Newsletter (Oct 11 2009)

Summary of events

1. 3rd annual Smith Mergers and Acquisitions Competition, October 22 – 23

2. Wall Street Boot Camp, November 6 – 7, 2009

3. Weekly WSJ Roundtable (Professor Faulkender will be leading the discussion on 10/20) - Tuesday 12:15 – 1pm, VMH 2333Q

4. Finance Association Wall Street Lingo of the Week – Short Squeeze

1) The Finance Association will be hosting the 3rd annual Smith Mergers and Acquisitions Competition on Thursday & Friday, October 22 – 23, 2009.

The Finance Association is currently recruiting enthusiastic volunteers for this event.  If you are interested in volunteering, click Here .   Please consider volunteering even if your schedule does not perfectly match up with the assigned time slots; just note your exact availability in the comments section.

Benefits of being an M&A volunteer:

Career networking opportunity with Smith MBA alums and M&A industry professionals (historically, volunteers get much more face time with the judges than the competition participants);

Networking opportunity with faculty members, first/second-year classmates, and administration staff member (this could help you to discover the best people to talk to when you need things to get done);

Gain greater understanding of M&A transactions;

2) Wall Street Boot Camp, November 6 – 7, 2009

The Finance Association will be hosting Wall Street Prep's Financial and Valuation Modeling seminar on Friday-Saturday, November 6-7, 2009. The seminar is taught by former investment bankers with applied expertise in financial and valuation modeling methodologies, this seminar bridges the gap between academics and the real world to equip MBA students with the practical financial skill set they need to excel during the recruiting process and on the job. Full details can be found at: http://www.wallstreetprep.com/training_umd.html

PROGRAM AGENDA: 

Friday, November 6 (9am-5pm): Financial Modeling in Excel

Saturday, November 7 (9am-5pm): Introduction to Valuation / Discounted Cash Flow (DCF) Modeling  

WHO SHOULD ATTEND?

This seminar is for all students pursuing or working in: investment banking, corporate finance, private equity, portfolio management, business development, capital markets, and equity & credit research

WHY SHOULD YOU ATTEND THIS SEMINAR?

- Supplement academic theory with real-life applications

- Simulate what finance professionals actually do on a daily basis

- Obtain practical financial skill set needed to excel on the job in finance

HOW TO REGISTER:

Online at http://www.wallstreetprep.com/training_umd.html

COST PER STUDENT:

$125 (for the first 27 students), which represents a 85% educational discount relative to WSP’s corporate training fees

WHAT’S INCLUDED?

- Two days of live training

- Extensive materials – comprehensive manuals and robust and reusable Excel model templates

- 3-month access to Crash Course in Excel online module

- 3-month post-seminar online access to Financial and DCF Modeling modules covered during the seminar

- 3-month e-mail access to Support Team, comprised of former finance professionals, whom students can contact with follow-up questions

ABOUT WALL STREET PREP

Wall Street Prep is a global full-service financial training firm, providing instructor-led training and e-learning services to investment banks, financial institutions, and Fortune 1000 companies, and has conducted seminars at some of the most prestigious academic institutions and corporations in the world, including Kellogg School of Management, Cornell University, NYU, Harvard University, University of Michigan, Credit Suisse First Boston, SK Telecom, and Thomson.

QUESTIONS OR COMMENTS?

Please feel free to contact Arkady Libman at alibman@wallstreetprep.com

3) Weekly Wall Street Journal Roundtable - Tuesday 12:15 - 1pm, VMH 2333Q

***Special Session Alerts***

Several Smith professors have agreed to lead discussions at our future roundtable meetings (thank you Jeff Hong).   These are some of the most brilliant minds in their respective fields and the best way that we can express our appreciation to them is to have strong showings at these events.

Please RSVP by using the links below so we can better accommodate the attendees.

Professor Faulkender, Tuesday, 10/20.   Topic: executive compensation.

http://www.surveymonkey.com/s.aspx?sm=Ms_2bVSI_2foMMR06KK57DHHFQ_3d_3d

Professor Pete Kyle, 10/27.   Topic: financial reform.

http://www.surveymonkey.com/s.aspx?sm=_2f0Gl4XpeVOEx_2b7xcl0vdVw_3d_3d

Professor Pete Kyle, 11/3.   Topic: cap and trade.

http://www.surveymonkey.com/s.aspx?sm=C5Kz3Z3fPj2m_2fRhvdh192g_3d_3d

Professor Cliff Rossi, 11/17.   Topic: risk management.

Sign up link coming soon.

4) Finance Association Wall Street Lingo of the Week – Short Squeeze

A situation in which a lack of supply and an excess demand for a traded stock forces the price upward.   Short squeezes occur more often in smaller cap stocks with small floats.

If a stock starts to rise rapidly, the trend may continue to escalate because the short sellers will likely want out. For example, say a stock rises 15% in one day, those with short positions may be forced to liquidate and cover their position by purchasing the stock. If enough short sellers buy back the stock, the price is pushed even higher.

Summary of events

1. First-Year Board Members
2. 3rd annual Smith Mergers and Acquisitions Competition, October 22 – 23
3. Save the date!   New York Career Trek, October 29 – 30
4. Weekly WSJ Roundtable (Professor Hoberg will be leading the discussion on 10/6) - Tuesday 12:15 – 1pm, VMH 2333Q
5. Finance Association Wall Street Lingo of the Week – Poison Pill

1) The Finance Association would like to announce and congratulate our new first-year board members:

Sam Brownell
Allison Chesnut
Mansi Deshpande
Quint Mansell
Rachel Oster
Philip Whitley

We are very excited to be joined by this talented and enthusiastic group of people and we will be counting on them to make the Smith community better and stronger.

Be sure to congratulate them!

2) The Finance Association will be hosting the 3rd annual Smith Mergers and Acquisitions Competition on Thursday & Friday, October 22 – 23, 2009.

We are currently recruiting for competition participants and volunteers for the event.  Please join us for a short information meeting on Monday, October 5, at 3 pm in VMH 2505.  See the attached flyer to learn more about this event.

3) Annual Finance Association New York Career Trek, October 29 – 30

A select group of Smith MBAs will visit New York City to engage alums and companies in the financial services industry on a two-day trip.   This career trek enables Finance Association members to learn about different job possibilities within the finance industry, and hear real life work experiences from industry professionals. Regardless if you have a finance background, this trip presents you with great opportunities to learn and network.

This year, we will be visiting the following companies:

Bank of American, JP Morgan, JP Morgan Chase, K2 Advisors, and more to be announced.

Details on a short information session will be announced soon!

4) Weekly Wall Street Journal Roundtable - Tuesday 12:15 - 1pm, VMH 2333Q

***Special Session Alerts***

Several Smith professors have agreed to lead discussions at our future roundtable meetings (thank you Jeff Hong).   These are some of the most brilliant minds in their respective fields and the best way we can express to them our appreciation is to have strong showings at the events.   Not only are they volunteering their time, but they are doing so while being furloughed.

Please RSVP by using the links below so we can better accommodate the attendees.

Professor Hoberg, Tuesday, 10/6.   Topic: recent mergers and acquisitions.

http://www.surveymonkey.com/s.aspx?sm=rSr3kYlzg_2bbV_2baJJTH499w_3d_3d

Professor Pete Kyle, 10/27.   Topic: financial reform.

http://www.surveymonkey.com/s.aspx?sm=_2f0Gl4XpeVOEx_2b7xcl0vdVw_3d_3d

Professor Pete Kyle, 11/3.   Topic: cap and trade.

http://www.surveymonkey.com/s.aspx?sm=C5Kz3Z3fPj2m_2fRhvdh192g_3d_3d

Professor Cliff Rossi, 11/17.   Topic: risk management.

Sign up link coming soon.

5) Finance Association Wall Street Lingo of the Week – Poison Pill

Created in the 1980s by M&A lawyer Martin Lipton, the so-called “poison pill” is a tactic public companies use to thwart hostile takeovers. In effect, it is an agreement adopted by a company’s board of directors that makes the target’s stock prohibitively expensive or otherwise unattractive to an unwanted acquirer. To date, no takeover bid has ever seen a poison pill fully executed — management teams typically have used the strategy as a deterrent and negotiation tool, buying their company time to bargain for a better purchase price.

To learn more about poison pill, click here .

Weekly Newsletter (Sep 27 2009)

Summary of events

1. Conversations with Joel Stern, the creator and developer of Economic Value Added (EVA) performance and expert in executive compensation – Thursday, October 1

2. Weekly WSJ Roundtable (Professor Hoberg will be leading the discussion on 10/6) - Tuesday 12:15 – 1pm, VMH 2333Q

3 . Finance Association Wall Street Lingo of the Week – Credit Sleeve

1 ) Conversations with Joel Stern – Thursday, October 1

 JOEL M. STERN is Chairman and Chief Executive Officer of Stern Stewart & Co., an advisory firm on financial policy, strategy and corporate governance, the creator and developer of Economic Value Added (EVA) as a measure of performance and the EVA Management System.   Stern Stewart has advised more than 740 organizations in various sectors since 1993.   You can learn more about Mr. Stern and his firm in the attached file.   Mr. Stern has asked that the students attending his talk read the attached article ahead of time.   Lunch will be served at this event.

When: Thursday, October 1, 12:25 pm - 1:30 pm

Where: VMH 1518
Dress: Business Casual

2) Weekly Wall Street Journal Roundtable - Tuesday 12:15 - 1pm, VMH 2333Q

Join First and Second year classmates who are interested in the financial markets to talk about current company, economic, market, and industry news.  This is helpful for your finance electives, preparing for interviews, and being knowledgeable about the markets.

***Special Session Alert***

Professor Hoberg will be leading the roundtable discussion on Tuesday, 10/6.   Please RSVP by using the link below so we can better accommodate the attendees.

3) Finance Association Wall Street Lingo of the Week – Credit Sleeve

A form of credit agreement, backed by physical assets, where the lending party will provide working capital and collateral to another company, known as the "sleeve provider". The lending party will essentially co-guarantee certain outstanding credit arrangements the sleeve provider has with other lenders and increase the overall credit quality of the sleeve provider.

This type of working capital loan is most often found within the energy industry, where sleeves are backed by physical energy assets and carry certain cash flow requirements for the sleeve provider to continue to operate. Credit sleeves are often set up when a company has seen its credit quality decline and access to traditional forms of debt financing has run dry.

Weekly Newsletter (Sep 20 2009)

Summary of events
1. Speaker Series with Dr. Robert E. Carpenter, Lead Financial Economist at the Federal Reserve Bank of Richmond – Tuesday, September 22

2. Conversations with Joel Stern, the creator and developer of Economic Value Added (EVA) performance and expert in executive compensation – Thursday, October 1

3. Weekly WSJ Roundtable - Tuesday 12:15 – 1pm, VMH 2333Q

4 . Finance Association Wall Street Lingo of the Week – Laffer Curve

1 ) Speaker Series with Dr. Robert E. Carpenter, Lead Financial Economist at the Federal Reserve Bank of Richmond

The MBA Finance Association will be hosting a Finance Speaker event with Dr. Robert Carpenter.  Dr. Carpenter is an expert in housing and mortgage markets, securitization and structured finance, finance and economic theory, and statistical analysis of banking and financial data.   Dr. Carpenter will be presenting an overview of the financial crisis, the Fed’s reactions to the financial meltdown, and what to expect in the future.   Dr. Carpenter’s bio is included in this email.   Dinner will be served at this event.

When: Tuesday, September 22, at 5:30pm
Where: VMH Room 1202
Dress: Business Casual

2) Conversations with Joel Stern – Thursday, October 1

JOEL M. STERN is Chairman and Chief Executive Officer of Stern Stewart & Co., an advisory firm on financial policy, strategy and corporate governance, the creator and developer of Economic Value Added (EVA) as a measure of performance and the EVA Management System.   Stern Stewart has advised more than 740 organizations in various sectors since 1993.   You can learn more about Mr. Stern and his firm in the attached file.   Mr. Stern has asked that the students attending his talk read the attached article ahead of time.   Lunch will be served at this event.

When: Thursday, October 1, 12:25 pm - 1:30 pm

Where: VMH 1518

Dress: Business Casual

3) Weekly Wall Street Journal Roundtable - Tuesday 12:15 - 1pm, VMH 2333Q
Join First and Second year classmates who are interested in the financial markets to talk about current company, economic, market, and industry news.  This is helpful for your finance electives, preparing for interviews, and being knowledgeable about the markets.

4) Finance Association Wall Street Lingo of the Week – Laffer Curve

Laffer Curve: http://en.wikipedia.org/wiki/File:Laffer-Curve.svg

Invented by Arthur Laffer, this curve shows the relationship between tax rates and tax revenue collected by governments. The curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows that tax rates increasing after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue. Eventually, if tax rates reached 100% (the far right of the curve), then all people would choose not to work because everything they earned would go to the government.   Governments would like to be at point T*, because it is the point at which the government collects maximum amount of tax revenue while people continue to work hard.

Dr. Robert Carpenter’s Bio –

Robert E. Carpenter is a Lead Financial Economist in Banking Supervision and Regulation at the Federal Reserve Bank of Richmond.  He joined the Bank in August 2006 as a Senior Financial Economist.  He is a member of Banking Analytics and Supervisory Studies group, which serves as part of the Bank's Risk and Policy Unit.  He spearheads efforts to identify and study emerging issues in supervision. His principal function is to draw connections between information produced by bank examiners, financial analysts, industry and market participants, and economic theory and to explain those connections.  His broad areas of interest include the use of market and supervisory data to gauge banking conditions, bank funding markets, factors that might impact bank capital, and banks' role in the macro economy.  His areas of expertise include housing and mortgage markets, securitization and structured finance, finance and economic theory, and statistical analysis of banking and financial data.

Bob is also a professor in the Economics Department at the University of Maryland, Baltimore County (UMBC) a Faculty Associate for the Maryland Institute of Policy Analysis and Research at UMBC, and a Research Associate for the Levy Economics Institute of Bard College.  He teaches finance, macroeconomics, industrial organization, monetary theory, and risk management, and banking, of course. The current focus of his research is banking, financial markets, and the financial crisis.  His academic research focuses on how information problems in capital-market create frictions limit firms' access to funds and their investment and growth, especially small, high technology firms.  He is interested in how these frictions contribute to a "financial accelerator" that can amplify the transmission of monetary policy. His work has appeared in the economic profession's leading academic journals, including Brookings Papers on Economic Activity, The Economic Journal, The Journal of Banking and Finance, The Journal of Money Credit and Banking, and The Review of Economics and Statistics.

Bob received his Ph.D. in economics from Washington University in St. Louis in 1992.

Weekly Newsletter (Sep 13 2009)

Summary of events

1. Speaker Series with Dr. Robert E. Carpenter, Lead Financial Economist at the Federal Reserve Bank of Richmond – Tuesday, September 22

2. Technology Training Session with Chuck LaHaie – Wednesday, September 23

3. HireSmith Application Deadlines

4. Weekly WSJ Roundtable - Tuesday 12:15 – 1pm, VMH 2333Q

5. Finance Association Wall Street Lingo of the Week – Airbag Swap

1 ) Speaker Series with Dr. Robert E. Carpenter, Lead Financial Economist at the Federal Reserve Bank of Richmond

MBA Finance Association will be hosting a Finance Speaker event with Dr. Robert Carpenter.   Dr. Carpenter is an expert in housing and mortgage markets, securitization and structured finance, finance and economic theory, and statistical analysis of banking and financial data.   Dr. Carpenter will be presenting an overview of the financial crisis, the Fed’s reactions to the financial meltdown, and what to expect in the future.   Dr. Carpenter’s bio is included with this email.

When: Tuesday, September 22 , at 5:30pm

Where: VMH Room TBA

Dress: Business Casual

2) Technology Training Session with Chuck LaHaie

Chuck LaHaie, the Director of Accounting and Finance Technology and Applications at the Smith School of Business, will introduce finance and research technologies such as the Bloomberg Terminal and Reuters 3000 Xtra to event attendees.   Companies pay thousands of dollars each month in order to access these powerful technologies; as MBAs, you get to utilize these tools for FREE!   Come learn what technologies are available and how to use them.   A small investment of your time now will save you time on future class projects and researches.

When: Wednesday, September 23 , at 5pm

Where: VMH 3505

3) HireSmith Application Deadlines

9/14, ExxonMobile, Financial Analyst – Controllers.

9/17, CSX Corporation, Finance Management Training Program.

9/17, T. Rowe Price, Fixed Income Credit Analyst.

9/17, Johnson & Johnson, Global Recruiting Program 2009/2010.

4) Weekly Wall Street Journal Roundtable - Tuesday 12:15 - 1pm, VMH 2333Q

Join First and Second year classmates who are interested in the financial markets to talk about current company, economic, market, and industry news.  This is helpful for your finance electives, preparing for interviews, and being knowledgeable about the markets.

5) Finance Association Wall Street Lingo of the Week – Airbag Swap

An interest rate swap whose notional value adjusts according to rising interest rates by indexing the floating portion to a constant maturity swap (CMS).   These swaps were created to hedge investments in areas where interest rate fluctuations have significant effects. Due to an increasing notional value, an asymmetrical payout schedule occurs whereby the swap's net payment with higher interest rates is greater than that occurring with lower interest rates.

Dr. Robert Carpenter’s Bio –

Robert E. Carpenter is a Lead Financial Economist in Banking Supervision and Regulation at the Federal Reserve Bank of Richmond.  He joined the Bank in August 2006 as a Senior Financial Economist.  He is a member of Banking Analytics and Supervisory Studies group, which serves as part of the Bank's Risk and Policy Unit.  He spearheads efforts to identify and study emerging issues in supervision. His principal function is to draw connections between information produced by bank examiners, financial analysts, industry and market participants, and economic theory and to explain those connections.  His broad areas of interest include the use of
market and supervisory data to gauge banking conditions, bank funding markets, factors that might impact bank capital, and banks' role in the macro economy.  His areas of expertise include housing and mortgage markets, securitization and structured finance, finance and economic
theory, and statistical analysis of banking and financial data.

Bob is also a professor in the Economics Department at the University of Maryland, Baltimore County (UMBC) a Faculty Associate for the Maryland Institute of Policy Analysis and Research at UMBC, and a Research Associate for the Levy Economics Institute of Bard College.  He teaches finance, macroeconomics, industrial organization, monetary theory, and risk management, and banking, of course. The current focus of his research is banking, financial markets, and the financial crisis.  His academic research focuses on how information problems in capital-market create frictions limit firms' access to funds and their investment and growth,
especially small, high technology firms.  He is interested in how these frictions contribute to a "financial accelerator" that can amplify the transmission of monetary policy. His work has appeared in the economic profession's leading academic journals, including Brookings Papers on
Economic Activity, The Economic Journal, The Journal of Banking and Finance, The Journal of Money Credit and Banking, and The Review of Economics and Statistics.

Bob received his Ph.D. in economics from Washington University in St. Louis in 1992.

Summary of events
1. Finance Association Kick-Off Meeting – Monday, 8/31 at 3:30pm

2. Weekly WSJ Roundtable - Tuesday 12:15 – 1pm, VMH 2333Q

3. Upcoming Events

4. Finance Association Wall Street Lingo of the Week – Quantitative Easing

1) Finance Association Kick-Off Meeting - Monday, 8/31 at 3:30pm

Come join current and new MBA Finance Association members as the Class of 2010 officers reveal exiting events that are planned for the new academic year.   In addition, there will be a panel of Class of 2010 members sharing their summer internship experiences.   Food and light refreshments will be served at this event.

What: MBA Finance Association Kick-Off Meeting

When: Monday, 8/31 at 3:30pm

Where: Tyser Auditorium , VMH 1212

If you missed the sign up for this event at Thursday’s Clubs Bazaar, please sign up at

2) Weekly Wall Street Journal Roundtable - Tuesday 12:15 - 1pm, VMH 2333Q

Join First and Second year classmates who are interested in the financial markets to talk about current company, economic, market, and industry news.  This is helpful for your finance electives, preparing for interviews, and being knowledgeable about the markets.

3) Upcoming Events

- Speaker Series with guest speaker Dr. Robert E. Carpenter, Lead Financial Economist at the Federal Reserve Bank of Richmond (Sept 22)

- First Year Officer Selection (September)

- Financial Technology training session (September)

- 3rd Annual Smith M&A Competition (Oct 22/23)

- New York Trek (Late October or early November)

- Wall Street Boot Camp (Early November)

- Mock Interview Super Day (November)

- Alumni Outreach Event

4) Finance Association Wall Street Lingo of the Week: – Quantitative Easing

A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Why do MBAs care?

Central banks tend to use quantitative easing when interest rates have already been lowered to near 0% levels and have failed to produce the desired effect. The major risk of quantitative easing is that although more money is floating around, there is still a fixed amount of goods for sale. This will eventually lead to higher prices or inflation.

Source: Investopedia