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Booth in the News, Spring 2010, Vol. 2

(Covering March 29 to April 15, 2010)

Here are highlights of the latest Chicago Booth news coverage. The digest below represents only a portion of recent coverage.

Section 1: News coverage of Chicago Booth.

  • U.S. NEWS AND WORLD REPORT. Chicago Booth’s Evening and Weekend MBA Programs ranked second in the magazine’s annual ranking of the best business school programs, published April 15. The Executive MBA Program ranked third among EMBA programs, and the Full-time MBA Program tied for fifth with Wharton. Each Booth program maintained the same ranking it held a year ago. In the specialty categories, Booth ranked second in finance, third in accounting and sixth in marketing. Read more
  • U.S. NEWS AND WORLD REPORT. A feature article “How to Get In to the University of Chicago Booth School of Business,” was published April 15. “The GMAT and GPA are individual predictors of how well a student might do academically. At Booth, we will focus more on the transcript (rather than grades) to get a better picture of a candidate’s academic ability,” said Rosemaria Martinelli, associate dean of student recruitment and admissions. Read more
  • FINANCIAL TIMES. A feature article about Dean Snyder as he prepares to complete his service as Chicago Booth dean was published April 12. “It takes a fairly subtle person to be effective in this environment, but that’s the way a dean should operate anyway,” he said. “A dean shouldn’t be the star of the show. Sometimes you need to lead and be up there but a lot of what you’re doing is shining a light on other folks.” Dean Snyder’s most dramatic moment, according to the article, occurred in November 2008 when the $300 million gift from alumnus David Booth was announced. It remains the largest donation to any business school in the world and the largest gift ever made to the University of Chicago. Read more
  • BLOOMBERG BUSINESSWEEK. Chicago Booth was one of the schools featured in an article about dean searches at top schools published in the April 12 print edition. Edward Snyder, who will complete his service as dean of Booth June 30, “was particularly adept at fundraising,” the article said. “He scored the biggest B-school gift ever, a $300 million whopper from alumnus David Booth. He also expanded Booth’s international footprint and retained its roster of star faculty.” Read more
  • CRAIN’S CHICAGO BUSINESS. Chicago Booth’s Social Venture Forum, scheduled for April 22 at Gleacher Center, was featured in an article headlined “U of C event seeks to mix profit and foundation giving.” Representatives of three or four small companies will make pitches to the Hyde Park Angels, a group of early-stage investors, according to Clinical Associate Professor Linda Darragh. The story was published April 2.

Section 2: News coverage quoting Chicago Booth faculty.

  • THE NEW YORK TIMES. Professor Richard Thaler wrote the Economic View column April 2 headlined “When a First Pick Isn’t the Best Pick.” In recently updated research, Professor Thaler found that National Football League teams choosing early in the annual draft generally don’t get the players that provide the most value per dollar. “That surprising result has implications not only for football, but also for any domain where organizations try to select talent, whether C.E.O.’s or their own ‘rookies’ – newly minted graduates,” he wrote. Read more
  • BLOOMBERG BUSINESSWEEK. An op-ed written by Professor Raghuram Rajan titled “An Army of Unpaid Regulators,” was published in the issue dated April 12. “Bank debt holders came through the crisis unscathed,” he wrote. “Tweaking the Dodd bill would make them soldiers in the war on foolish risk.” Read more
  • THE WALL STREET JOURNAL. Professor Gary Becker was featured in the Weekend Interview March 26, headlined “‘Basically an Optimist’ – Still.” He says the health-care bill recently signed into law will cause serious damage, but that the American people can be trusted to vote for limited government in November. The new health-care law “is going to increase health costs – not contain them,” Professor Becker said. Read more
  • THE WALL STREET JOURNAL. Professor Anil Kashyap was quoted in an article headlined “Light At the End of the Bailout Tunnel,” published April 12. There may be encouraging signs, but widespread anger over the rescues Fannie Mae and Freddie Mac has complicated the Obama administration’s ability to get things done in Washington, including its proposed overhaul of financial regulation, the article said. “How do you put a price tag on populist rage that’s polluting all economic policy making,” Professor Kashyap said. Read more
  • FINANCIAL TIMES. Professor Randall Kroszner was appointed an advisor to Getco, a U.S.-based electronic trading and market-making firm, according to a March 31 article. The move is a sign of how the privately-held firm is becoming more engaged in current policy debates over the future structure of markets and how they should be regulated in the wake of the financial crisis, the article said. Professor Kroszner is a former Federal Reserve Board governor. Read more
  • THE WALL STREET JOURNAL. Professor Steven Kaplan was the first expert quoted in a story headlined “Getting Bang for the Buck: Companies Run by Best-Paid Chiefs Typically Deliver Above-Average Shareholder Returns,” published April 1. Professor Kaplan said a recent analysis of CEO pay by the newspaper shows a 1 percent increase in annual shareholder returns over the past three years equated to about $1 million in a CEO’s pocket. The study shows a “strongly significant” alignment between corporate performance and CEO pay, he said. Read more
  • THE NEW YORK TIMES. Professor Erik Hurst’s research showing that leisure time among men and women increased four to eight hours a week from 1965 to 2003 was cited in an article headlined “Surprisingly, Family Time Has Grown,” published April 5. Much of that increased leisure time is being spent with children, Professor Hurst said. “It’s taking them to school, helping with homework, bathing them, playing catch with them in the back yard,” he said. “Those are the activities that have increased over the last 15 to 20 years.” Read more
  • THE WASHINGTON POST. New research by Professor Robert Vishny was featured in an article headlined “How financial innovation causes financial crisis,” published April 12. The research “offers an uncommonly clear explanation,” the article said. Professor Vishny’s research is titled “Financial Innovation and Financial Fragility.” Read more
  • FINANCIAL TIMES. Professor Haresh Sapra discussed accounting and external shocks to the financial system in an article headlined “Wanted: A new economic model,” published March 29. One way to reduce such shocks, he said, is to value illiquid securities by some kind of average, for instance, between fair value and historic cost. Read more
  • THE NEW YORK TIMES. Research by Professor Steven Kaplan was featured in an article headlined “Pension Funds Still Waiting for Big Payoff From Private Equity,” published April 3. Professor Kaplan found that, after fees, many private equity investments just about match or even trail the returns of the broad stock market between 1980 and 2001. Funds started during the boom years, so-called vintage funds, were likely to disappoint investors, he said. Read more
  • THE NEW YORK TIMES. Research on state pension obligations by Assistant Professor Robert Novy-Marx was featured in an article headlined “State Debt Woes Grow Too Big to Camouflage,” published March 29. The value of the 50 states’ pension obligations when recalculated the way the bond markets value debt is $5.17 trillion, according to Professor Novy-Marx’s research, the article said. Professor Novy Marx’s research was also cited in a second article, published April 7. Read more
  • THE TIMES OF LONDON. Research by Associate Professor Tanya Menon was cited in an article headlined “Why envy at work is not necessarily a bad thing,” published April 5. Professor Menon and her coauthor, however, argue that envy “harms the one who feels it. When you’re obsessed with someone else’s success, your self-respect suffers and you may neglect or sabotage your own performance and possibly your career.” Read more Professor Menon’s research on envy appeared earlier in Harvard Business Review.
  • BLOOMBERG BUSINESSWEEK. Research by Professor Ayelet Fishbach on the impact of perceptions about the health content of food and how full it made a person feel was featured in an article headlined “Calling a Food ‘Healthy’ May Make You Hungrier,” published April 2. “When people feel they are required to eat healthy food, eating that food makes them hungry,” Professor Fishbach found. Read more
  • REUTERS. Professor Steven Kaplan was quoted in an article headlined “Private equity investors increase clout,” published April 1. “It’s a supply and demand issue,” he said. “The LPs (limited partners) have a bit more power than they did three years ago. And when the LPs have power they try to exercise it; just as when the GPs (general partners) have power they exercise it.” Read more
  • CNBC.COM. Professor Randall Kroszner was quoted in an article headlined “Should Hedge Funds Be Able to Take Over Failed Banks?” published April 8. He said it isn’t necessarily a bad idea to get the private sector more involved. “Increasing capital at troubled depository institutions promotes financial stability and allows them to restart their lending,” he said. “With appropriate safeguards, inflows of private capital can be part of this process.” Read more
  • CHICAGO TRIBUNE. Professor John Cochrane was quoted in an article headlined “Fear of markets pushes some to precious stones, gold,” published April 15. “If you’re worried about inflation – yes, I sympathize, but there are better ways (to invest),” Professor Cochrane said. Anyone worried about inflation should stay away from long-term bonds, but can do better investing in short-term bonds or Treasury Inflation-Protected Securities than diamonds and jewels, he said. Read more
  • TAMPA TRIBUNE. Research by Professor Luigi Zingales was featured in an article about homeowners who let their home go into foreclosure on purpose. About 36 percent of the nation’s defaults in December 2009 were what he calls “strategic defaults,” the article said. That’s up from 25 percent in March 2009. Read more
  • VANCOUVER SUN (Canada). Professor Robert Fogel said half of today’s undergraduate students will live to see their 100th birthday, provided they find some way to counteract their sedentary, tech-enabled lifestyle, according to an article published March 30. “The future health of the I.T. generation is quite bright, provided that they adopt an appropriate lifestyle to go with their new technological opportunities,” he said.
  • THE AMERICAN SPECTATOR. Professor John Cochrane was quoted extensively in a lengthy article about the level of U.S. debt. There’s no “magic number” of debt-to-GDP ratio at which point investors lose confidence, he said. “The U.S. can raise enormous amounts of money if people are convinced that there’s a plan for paying it off,” Professor Cochrane said. “The important thing is convincing the markets that you have a plan, and you’re going to figure this out sooner or later.” The article appeared in the April issue. Read more
  • JYLLANDS POSTEN (Denmark). Research by Clinical Professor Michael Gibbs on the relationship between globalization, reputation and wine pricing was featured in an article published April 9.
  • PUBLIC RADIO SR DRS (Switzerland). Professor Haresh Sapra discussed Lehman Brothers use of an accounting practice known as “Repo 105,” during an interview broadcast in March. Repo 105 allowed the bank to move certain assets off the books, which allegedly improved the look of its balance sheet. Professor Sapra’s interview aired on three different German-speaking stations, reaching 750,000 listeners.
  • CRAIN’S CHICAGO BUSINESS. Clinical Professor Ellen Rudnick was quoted in an article headlined “With stable jobs scarce, young women take risky path to entrepreneurship,” published April 12. “A lot of (women) see their friends who’ve gone to work at these larger companies get laid off after a couple years,” Professor Rudnick said. “I do think that the current economic situation may be a trigger event for people to think about alternative careers.” Read more
  • CANADIAN BUSINESS MAGAZINE. Visiting Professor S. Abraham Ravid was quoted in an article headlined “Futures markets go Hollywood: With credit in a crunch, futures markets allow film studios to sell themselves short,” in the April 26 edition. Trading strategies would be more complex for movie futures than corn or cotton, Professor Ravid said. “Futures are generally in standardized commodities. Films are anything but.” Read more

Section 3: Chicago Booth students and alumni in the news.

  • THE GUARDIAN (London). Bart Becht, MBA ’82, topped the newspaper’s annual salary ranking published April 7. Becht, CEO of Reckitt Benckiser, earned 36.8 million British pounds in 2009, the article said. After exercising stock options, he made more than 90 million British pounds, according to the newspaper. Read more
    A second article about him can be found here Read more
  • CHICAGO TRIBUNE. Joe Mansueto, MBA ’80, chairman and CEO of Morningstar, has had his salary fixed at $100,000 per year since 2000, according to an article published April 8. As principal shareholder of Morningstar, Mansueto believes his compensation should be realized mostly through appreciation in the company’s stock. He owns 25.6 million shares, worth $1.2 billion based on Morningstar’s recent trading price, the April 8 article said. Read more
  • USA TODAY. Tom Ricketts, MBA ’93 was featured in an article headlined “New Cubs owner Ricketts realizes dream,” published April 12. “Tom Ricketts was cleaning out some drawers last summer when he came across an old business school essay describing his dream job,” the article said. “You can guess what he chose.” The Ricketts family bought a 95 percent stake in the Chicago Cubs from Tribune Company for $845 million. The sale included Wrigley Field. The Ricketts family founded online brokerage TD Ameritrade Holding Corp. Read more
  • BLOOMBERG BUSINESSWEEK. Dimensional Fund Advisors, a company founded by David Booth, MBA ’71, was profiled in an article headlined “Booth’s Dimensional Doubles Money in Mortgage Insurer Holdings,” published April 13. The company “reaped gains of more than 100 percent this year by investing in mortgage insurers that rallied on speculation that home-loan delinquencies would subside,” the article said. Dimensional manages more than $160 billion. David Booth is co-CEO. Read more
  • CRAIN’S CHICAGO BUSINESS. David Lieb, on leave from the full-time MBA program, was featured in a Q&A interview published March 30. He is co-founder and CEO of Bump Technologies. The article was titled “Bump CEO talks up new PayPal partnership.” Lieb’s company was co-winner of Booth’s New Venture Challenge last year. Read more
  • TORONTO STAR. Dumas Simeus, MBA ’72, discussed the best ways to help rebuild Haiti after the devastating earthquake. “Any meeting about rebuilding Haiti, redefining Haiti, reconstructing Haiti without the voice of the people being in the first paragraph is worthless,” said Simeus, a former presidential candidate in Haiti. “You cannot talk about helping a country without asking the people, ‘what do you want, what do you think is missing, how do you want to be governed.’” The article was published March 31. Read more