Fortune's Interview with the Merc's Innovator

Excellent interview with Leo Melamed, the former CEO of the Chicago Mercantile Exchange. Melamed was instrumental in bringing financial futures to the Merc, rather than typical agricultural futures and commodities.

Curtail Excess Pay? Just Change the Expense Rule

Excess pay for CEOs has been the topic of choice at cocktail parties these days, just as real estate was last year. Years ago when CEO salaries were becoming excessive, lawyers and accountants said options would be the best way to compensate management that traditionally sat on poorly performing businesses and made millions anyway. Check out the WSJ article yesterday on the state of the employee stock option.

It was interesting to see the SEC's response to excessive management pay and backdated options seems to just "mask" actual option compensation, as a CNN article points out.

"But in a statement issued Friday, the commission said it had changed the disclosure rule to match stock option accounting expense requirements that only require the cost of vested options - those an executive can currently exercise - to be counted as an expense."

So if it hasn't been vested, it won't be expensed. So CEO pay will seem lower, but in reality, it's just an accounting adjustment.

Interesting situation for fund of funds

Check out two recent articles on situation that fund of funds are in right now.

Here and here.

Forbes values college football teams

Forbes had an interesting analysis that valued college football programs. Number one, of course, Notre Dame.

Time Magazine's Ominous Sign

So Barron's, always the pessimist, must have a vendetta against Time Magazine because in the financial newspaper's latest issue there were two instances when it was brought to light that Time's cover stories have been great busts. More specifically, Time has been notorious for putting stories on its front page that eventually turning into great short ideas. Case in point, Jeff Bezos being voted Man of Year by Time three months before the stock went from the hundreds to below $10.

Interesting indeed. To be sure, Barron's is not the originator of the theory that Time Magazine as the predictor of bad things. It turns out that a gentleman named Paul Macrae Montgomery, who writes a Universal Economics Letter, is the astute researcher who uncovered the rather odd correlation.

Why is this most recent Time issue of concern? Because this year's person of the year is actually you. Time's issue had a reflexive mirror on its cover to show that we are the drivers of the internet, youtube, web 2.0, and itunes generation. Should we "sell ourselves short," Barron's asks? Not necessarily but perhaps this cover story could be a bad sign for Google, because nothing represents the internet generation like Google (or at least we are led to believe that).

Check out the Barron's references here and here.

Back from Acapulco

Merry Xmas everyone. I am back from a relaxing week in Acapulco and have some serious catching up to do on market activity.

Expect several posts over the next few days, although some of the related articles may be a bit dated.

As you well know, a lot of different publications have been putting together their Year in Review pieces as well as their Investment Guide for 2007. I will try to provide links to as many as I find.

Wilbur Ross on CNBC

So I have been meaning to put up a post on the new CNBC.com.

The financial news station had been touting its new website's arrival for months, and now that it's up and running, I must say that I'm pretty impressed. The most useful part of the site is the plethora of videos available for free and the searchable database that lets you see what you may have missed in the past. One thing that is missing is RSS feeds. How could a new news site not have RSS feeds? Just doesn't make sense in my opinion.

At any rate, there was a nice interview between Maria and Wilbur Ross today. Ross has been one of the best investors in the distressed space and the interview is a nice segment on what he's seeing in the marketplace.

Here is part 2 of the interview.

Goldman adds color on its hedge fund replicating tool

The Financial Times reported last week that Goldman was going to be rolling out a system that could replicate hedge fund returns. The rumors started swirling that Goldman was going to marginalize the fund of funds business. Well Goldman has come out and said that it doesn't expect to do so.

The Misleading Housing Market Stats

So a few different newspapers and financial blogs have been talking about the housing market and one topic that many have jumped on is the housing stats. If you look at the headline numbers from organizations that track activity across the U.S. you'd think that homes are actually selling at decent prices and that perhaps the market isn't in as bad a shape as the naysayers think. Well, when you look at what this data really measures, you realize that the housing market is a lot worse than the numbers would lead you to believe.

Probing the Municipal Bond Market

In what could be a huge blow to several of the largest financial institutions, the U.S. government is conducting a probe of the municipal bond market to see if anticompetitive forces have cost municipalities hundreds of millions of dollars. A development to watch.

Omea Pro now available for free

So the RSS reader I have been using also has a more advanced version that traditionally sells for $50. It has a lot of great features but I never decided to pony up the money because the free version did what I needed. I recently noticed that Omea Pro is now free. Check it out here.

Excellent Overview of the Homebuilders

A great read from SeekingAlpha on the current state of the homebuilder stocks. Check it out.

Mellon and BNY

So merger mania continued today with the announcement of an MOE between Mellon Financial and Bank of New York. The deal makes logical sense - the two companies are big in the securities servicing, a business where scale is huge. The money for institutions like BNY and Mellon is in catering to hedge funds that either need capital or need to borrow stock stock for trades.

Management is calling this an MOE, but, as the media has pointed out, BNY shareholders will control 63% of the company post-deal and command 10 out of 18 board seats.

Check out the Bloomberg article here.

Be sure to check out the companies' filing with a presentation outlining the deal.

Wall Street's Young Blood

IDD Article outlines the young guns on Wall Street.

Nice article on Milton Friedman

So obviously the big news in the past few weeks in the economics/academic community has been that Milton Friedman, the venerable economist and former University of Chicago faculty member, passed away. Jeremy Siegel had a nice article covering Friedman's life and his effect on future economic policy.

New Column for ChiBus

Check out my third column for the GSB's student newspaper - ChiBus.