Booth in the News, Winter 2010, Vol. 1
(Covering December 1, 2009 to January 4, 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.
- THE WALL STREET JOURNAL. Chicago Booth and the University of Chicago Medical Center are collaborating on a non-degree executive education program titled “Understanding the New Breed of Healthcare Decision Makers,” to be offered by Booth for the first time in May, according to an article published December 17. Professor Sanjay Dhar is working with Dr. David Song of the Medical Center on the content which will include how doctors and hospitals define value; how reimbursement strategies work; and how supply chain, purchasing decisions, patient flow and operations are managed. The article was headlined “A Dose of Medicine for Marketers.” Read more
- BLOOMBERG BUSINESS WEEK. Chicago Booth was featured in an article about the changes taking place in recruiting non-U.S. students to U.S. business schools. “I think the international market takes some care and feeding right now because there are so many options that students have and there is so much uncertainty with the ability to work in the U.S. and finance the MBA,” said Rosemaria Martinelli, associate dean of student recruitment and admissions. The story was published November 30. Read more
- BLOOMBERG BUSINESS WEEK. Chicago Booth was one of the schools featured in an article containing tips on how to search for a job during the year-end holidays. Even during the holidays you should respond quickly when contacted by potential employers, mentors and others who reach out to you by phone or email, said Jessica Henry, senior associate director of career services. The story was posted on the magazine’s website December 14. Read more
- BLOOMBERG BUSINESS WEEK. Chicago Booth has no plans to accept the GRE in place of the GMAT, Rosemaria Martinelli, associate dean of student recruitment and admissions, said in an article published December 28. Booth has a long history with the GMAT, and the admissions committee knows exactly what GMAT scores mean and how to compare them from student to student and year to year, she said. In addition, the GMAT provides security that gives business schools assurance that the person taking the exam is the one whose name is on the application. The article was headlined “GRE or GMAT: The Test-Taker’s Dilemma.” Read more
- CHICAGO TRIBUNE. Dean Edward Snyder will complete his service as dean of Chicago Booth at the end of June, according an article published December 11. He oversaw the 2008 “blockbuster $300 million gift from financier David Booth,” the article noted. “It’s a good time. The school is in such good shape,” Dean Snyder said. When he completes his deanship in June he will have served nine years in the leadership role. Read more
The Economist, Financial Times and Business Week also published articles announcing that Dean Snyder will complete his service as dean at the end of June.
Section 2: News coverage quoting Chicago Booth faculty.
- THE WALL STREET JOURNAL. New research by Professor Eugene Fama was featured in an article headlined “Top Mutual Funds: Luck or Skill? New Study Questions ‘Active’ Managers.” It is impossible to tell whether actively managed funds that beat the market do so out of luck or skill, according to Professor Fama’s new research. The claim means that investors can’t know for sure how good their active manager is, he said in the article published December 3. Read more
- THE NEW YORK TIMES. Professor Richard Thaler wrote the Economic View column December 20 headlined “Gauging the Odds (And the Costs) in Health Screening.” The column looked at how to judge the value of a mammogram in saving a life. Read more
- FINANCIAL TIMES. Professor Luigi Zingales published an op-ed titled “A tax on short-term debt would stabilize the system,” December 17. “A 1 per cent tax on our outstanding short-term debt (of financial institutions) would raise $21.5 billion annually just among the top nine institutions,” he wrote. “This is not going to fix our budget problems but would be enough to pay for the surge in Afghanistan. Most importantly, it could stabilize our financial system and prevent a new crisis.” Read more
- THE WALL STREET JOURNAL. A Q&A interview with Professor Raghuram Rajan was published December 28 on the economics blog. “Raghuram Rajan, an economist at the University of Chicago Booth School of Business, has built a reputation for prescience,” the article said. “Now people listen more attentively to what he has to say.” In the interview, he discusses the future of the U.S. model of capitalism. Read more
- CNBC. Professor John Huizinga discussed current economic conditions in the U.S. during an appearance on “Closing Bell Europe” December 4, live from London. Gross Domestic Product (GDP) grew in the third quarter of 2009 and is likely to grow in the fourth quarter, he said, adding that “Job growth can’t be that far behind.” The entire interview can be seen here: Watch the video
- CNBC. Professor Randall Kroszner said the U.S. economy is “starting to see the stimulative effect of monetary policy,” during an appearance on Squawk Box December 4. The decline in job losses means the jobs outlook is “much, much better than it was 9 or 10 months ago,” he said, adding that Fed Chairman Ben Bernanke helped prevent a repeat of the Great Depression.
- THE WALL STREET JOURNAL. Professor Gary Becker said he expects “solid growth in 2010. And in the longer run, the world economy will continue to grow rapidly.” Writing in the December 21st edition he said “The thing that concerns me is whether we are getting too much regulation and social engineering in the next few years … We have to make sure we don’t try to overtax and over-regulate businesses.” Read more
- THE NEW YORK TIMES. Dean Snyder participated in an online debate about whether business school students should be treated as customers. “The best students don’t view themselves as customers, and they shouldn’t be treated as such,” he said. “A combination of stretch and support is the answer to the question: how can business schools get more out of their students and better prepare them for diverse careers in turbulent times in all parts of the global economy?” Dean Snyder wrote January 3. “Deep professional development comes from setting high expectations, from challenging students, and from supporting them.” Read more
- AUSTRALIAN BROADCASTING CORPORATION (Sydney). Professor Douglas Diamond discussed his recommendations for the banking system during an interview broadcast December 18. “Banks that have more of their debt short term should have a higher capital requirement than a bank that has more long term debt,” he said. “And larger banks, who are more likely to be bailed out by the government, they should have a higher capital requirement.” Read more
- THE WALL STREET JOURNAL. Professor Steven Davis was quoted in an article headlined “White House, GOP Spar on Stimulus.” The Congressional Budget Office estimated the federal stimulus package sustained between 600,000 and 1.6 million jobs in the third quarter and raised gross domestic product by 1.2 to 3.2 percentage points higher than it would have been without the program. The range showed “a great deal of uncertainty about how beneficial the stimulus program has been and will be,” Professor Davis said in the December 1 article. Read more
- CHICAGO TRIBUNE. Research by Professor Nicholas Polson and Associate Professor Hedibert Lopes on the spread – and now decline -- of H1N1 flu was featured on the front page of the business section December 11. Professors Polson and Lopes “are using data from Google Flu Trends, currently the fastest way to track the flu, and applying a mathematical model that aims to do the one thing Google can’t yet do: predict what will happen next,” the article said. Read more
- THE NEW YORK TIMES. Research by Professor Eugene Fama was cited in an article headlined “What the Past Can’t Tell Investors.” Growth stocks outperformed value stocks last year, the article noted. Investment newsletters often argue that this means growth stocks are likely to do so in 2010 as well. Professor Fama calculated the returns of both categories back to 1926, but the database shows no correlation in performance from one year to the next for either class, the January 3 article said. That means that, while growth stocks this year may very well continue to lead the market, whether they do so won’t be determined by their 2009 performance, the article said. Read more
- THE WALL STREET JOURNAL. Professor Anil Kashyap was a lead organizer of a call by academic economists for lawmakers to drop plans to subject the Federal Reserve to more scrutiny by the Government Accountability Office, an investigative arm of Congress, according to an article published December 8. The article was headlined “Academics Spar With Populists Over Fed Audits.” Read more
- THE WALL STREET JOURNAL. Professor Luigi Zingales was quoted in an article headlined “Geithner Says Private Capital Will Boost Lending,” published December 18. “There’s a tension between economic success and political success,” Professor Zingales said. “The way TARP was sold was not that we’re trying to save the financial system, but that we’re trying to save Main Street that needs loans from the financial system. And while TARP has been very successful in saving those companies, it has not been successful in inducing them to lend.” Read more
- FORBES INDIA. Clinical Professor James Schrager said GE “has been late to the party in India,” and Jeffrey Immelt, the company’s CEO, “doesn’t have the formula to make GE, as we know and see it today, highly successful in a country like India.” He made his comments in a lengthy Q&A interview published December 16. Read more
- THE WALL STREET JOURNAL. Professor Raghuram Rajan was quoted in an article claiming that the 2000s could be termed a lost decade for the U.S. economy. “The U.S. was perceived (around the world) as the place to emulate,” he said. “To a large extent that’s gone.” The article was published December 21. Read more
- THE WALL STREET JOURNAL. Professor Raghuram Rajan was one of the experts quoted in an article headlined “Economic Crisis Ebbs, Systemic Risks Don’t.” To help create a global balance, international efforts have focused on getting China to allow its currency to strengthen against the dollar. “To think that this is the magic answer is overstating the case tremendously,” Professor Rajan said in December 7 article. Read more
- BLOOMBERG TELEVISION. Professor Luigi Zingales discussed his proposal for new, market-based capital system to gauge the health of banks during an interview December 15. “Regulators always seem to be late to the problem,” he said. “There is huge political resistance to jumping the gun and asserting that a bank is not adequately capitalized.” Professor Zingales proposed a market-based trigger. “Credit Default Swaps are the best indicator of a firm’s financial situation,” he said. Read more
- INVESTMENT NEWS. Professor Lubos Pastor made the list of “20 people who will have a big influence on the financial services industry in 2010,” published in the December 14th edition. His current research attempts to answer the question: If actively managed mutual funds don’t consistently outperform index funds, why do investors continue to invest in them? An article about Professor Pastor’s research can be found here: Read more
The Investment News “20 of 2010” article can be found here: Read more
- CHICAGO TRIBUNE. Professor Steven Kaplan’s views on executive compensation were featured in an article published December 6. “CEOs aren’t overpaid. The pay process isn’t broken. And their compensation shouldn’t be regulated. That’s Booth School of Business professor Steven Kaplan’s stump speech,” the article said. “And this year he has taken it to everyone from the powerful Securities and Exchange Commission to Yale law students and Economist magazine readers.” Read more
- THE WALL STREET JOURNAL. Professor Anil Kashyap was quoted in a blog posting headlined “After TARP Exits: Still No Clarity on Bank Capital Levels,” published December 15. The capital requirements that are a part of TARP exit plans are a different animal than minimum-levels of capital regulators require, Professor Kashyap said. That’s because the government doesn’t just want banks to survive. It wants them to lend. “Being well capitalized to avoid failing is different than being adequately capitalized to support an economic recovery,” he said. Read more
- THE ECONOMIST. Research by Professor Marianne Bertrand was featured in an article headlined “Female Power: Across the rich world more women are working than ever before. Coping with this change will be one of the great challenges of the coming decades.” Professor Bertrand surveyed Chicago Booth alumni and found that, ten years after graduating, about half of the female MBAs who had chosen to have children remained in the labor force, the December 30 article said. Read more
- CHICAGO TRIBUNE. Professor Randall Kroszner defended the steps taken by Ben Bernanke, Fed chairman, during the height of the financial crisis. To the extent the economy is “starting to stabilize and come back, it’s largely due to actions the Federal Reserve took,” he said during remarks at the recent Chicago Booth Business Forecast Lunch, according to an article published December 21. Professor Kroszner was a Fed governor from March 2006 to January 2009. Read more
The Nikkei of Japan published an article December 8 based on an interview with Professor Kroszner about the role of the Federal Reserve Board in the financial crisis.
- THE NEW YORK TIMES. Research by Associate Professors Atif Mian and Amir Sufi was featured in an article headlined “Credit Crunch: Home Equity Lending Evaporates.” Professors Mian and Sufi found that during the period 2002 to 2006, home equity lending and lines of credit were equal to 2.8 percent of the nation’s economic activity, the December 25 article said. Read more
- BARRON’S. Professor Luigi Zingales was one of the experts cited in an article about the warning signals sent before the credit crisis erupted by a group of economists who comprise the liquidity movement, as the group is known. Not everyone thinks the liquidity economists have all the answers to the recent crisis, the December 28 article said. “University of Chicago economist Luigi Zingales thinks the central issue was the solvency of institutions, not systemwide liquidity. Calling it a liquidity crisis simply makes it easier to justify government intervention, he says.”
- CHICAGO TRIBUNE. Professor John Cochrane was quoted in an opinion column headlined “Obama’s fantasy jobs plan.” Just because the economy grew after the stimulus passed doesn’t mean the stimulus deserves the credit, columnist Steve Chapman wrote December 10. “There is just as much evidence that Valentine’s Day saved the economy,” Professor Cochran said.
- THE NEW YORK TIMES. Research by Professor Robert Fogel on the differences between the physical goods economy of the 19th and 20th centuries, and the modern economy is included in “an important new book called ‘From Poverty to Prosperity,’” according to a column published December 22. The column, written by David Brooks, was headlined “The Protocol Society.” Read more
- BUSINESS STANDARD (India). Professor Steven Kaplan and KPMG published a new report showing that companies looking to improve shareholder value through acquisitions should finance their deals with only cash rather than stocks, according to a December 17th article. The key findings of the study show that “cash-only deals had higher returns than stock-and-cash deals and stock-only deals,” the article said. Read more
A similar story appeared in The Wall Street Journal December 15. Read more
- CBS MONEY WATCH.COM. Professor Randall Kroszner and FDIC Chairwoman Sheila Bair were among the guests on a 45-minute audio program “Where We Stand: The Year in Money,” posted December 23. Listen to program
- BLOOMBERG BUSINESS WEEK. Professor Raghuram Rajan was quoted in a Viewpoint column headlined “Financial Regulation: A Little Common Sense, Please,” published December 22. “The more drastic the regulation and the more it hurts profits, the greater the tendency to weaken the regulations in times of growth,” Professor Rajan said. Read more
- BLOOMBERG NEWS. Professor Steven Kaplan was one of the experts quoted in an article about real estate billionaire Stephen Ross’s entry into the banking business. Ross and two partners “have never run a bank before, but they’re operators who really know real estate,” Professor Kaplan said. “That must have been appealing to regulators.” The article was published December 15. Read more
- FINANCIAL TIMES. Research by Associate Professor Aparna Labroo on the effectiveness of advertising was featured December 18. During a recession, when consumers are anxious, calming advertising is the most effective, she found. By comparison, people who are angry or sad prefer advertising which makes them feel happy rather than calm.< Read more
- THE SYDNEY MORNING HERALD (Australia). Research by Professor Nicholas Epley was featured in an article headlined “God, as it turns out, looks a lot like you.” People subconsciously project their own views on controversial issues onto God, so much so that when their views change slightly, they think God’s views have also shifted, the research shows. The article was published December 2.
- CFO EUROPE. Professor Christian Leuz was quoted in an article about calls to loosen the ties between accounting standards and banks’ capital requirements. Supporters argue that doing so would preserve the financial reporting needs by investors while giving bank regulators the flexibility to deviate from GAAP for their definitions of regulatory capital. “The regulators (would) get to use the inputs provided by the accountants in whatever way they want, but they do not get to set the accounting measurements, as this could hurt transparency,” Professor Leuz said in the December 8 article.
- CHICAGO TRIBUNE. Clinical Professor Ellen Rudnick was quoted in an article about a new coffee shop that sells African coffees and teas, and sends a portion of its proceeds back to Africa. “You are seeing a lot greater interest in buying things that contribute to some social cause and there is awareness in wanting to buy things that have been acquired through fair trade,” she said. “We call it the double bottom line. ‘If I spend my money at this coffee shop, I know that some poor farmer from Africa will benefit,’” Professor Rudnick said in the December 11th article.
- ASSOCIATED PRESS. Professor Richard Thaler was quoted in an article about a proposal in the health care overhaul legislation that would nudge people into buying long-term care insurance. “No one thinks they need long-term care until two years after they need it,” said Professor Thaler, author of the book “Nudge: Improving Decisions About Health, Wealth and Happiness.” The theme of the book is that “we should try to help people make decisions without telling them what they have to do,” he said in the article distributed December 28.
- BOSTON GLOBE. Clinical Professor James Schrager was quoted in an article about the death of H. Edward Wrapp, a former Chicago Booth faculty member and director of the executive MBA program. “Ed has a view about strategy that became famous,” Professor Schrager said. “He changed the whole notion that strategy is removed from the day-to-day action of a business. He thought strategists should be there.” The article was published January 2. Read more
- CHICAGO TRIBUNE. Professor Harry Davis was quoted in an article about the death of former Chicago Booth Dean John Jeuck. “He had a deep curiosity,” Professor Davis said. “He had a real commitment to the work he was doing.” Jeuck was dean from 1952 to 1955 and retired from the faculty in 1988. After he retired, he formed the Distinguished Fellows Program with help from friends and former students, the December 23 article said. Read more
Section 3: Chicago Booth students and alumni in the news.
- THE TIMES OF LONDON. William Conway, MBA ’74 was profiled in the “Big shot of the week” column December 19. He is managing director and co-founder of the Carlyle Group. “Bill Conway has a huge wad of cash burning a hole in his pocket,” the article said. “The man who calls the shots at Carlyle Group, one of the world’s leading private equity investors, says he would like to spend $5 billion next year buying stakes in businesses across the globe,” the article began. Asia is the best place to invest, he thinks, with China and India offering the most opportunities. Conway is a graduate of the Evening M.B.A. program.
- BUSINESS WEEK. Urshala Brown-Bowles, MBA ’11 wrote an MBA Journal column posted December 17. “My long-term goal is to create a financial advice firm committed to teaching minorities about the market, introducing them to different types of investment products, and assisting clients in avoiding dangerous investments that could potentially rob them of their savings, homes, and futures,” she wrote. Read more
- BILLBOARD.BIZ. Tomotaka Hoshiai, MBA ’90 was named CFO of Universal Music Japan, according to an article published December 14. Previously he was CFO at chocolatier Godiva Japan and also held finance positions at Nissan Motors Limited U.K. and Nissan Finance of America.
- CHICAGO SUN-TIMES. Eric Olson, a current student in the Evening MBA program, was featured along with Sean Harper ’09 and Joshua Krall ’09 in an article about TransFS, the company they founded. TransFS features a reverse-auction for small businesses to find the most economical credit card processing rates. Read more
- TELECOMMUNICATIONS WEEKLY. Matthew Saleski, MBA ’96 was named vice president of marketing for Sun-Times Media in Chicago, according to an article published December 30. Previously he worked at Yahoo! and the Tribune Company.