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Another awesome week for the Finance Society. It was great to see many of the younger students come out and learn some of the key networking tips from our president Sameen Singh and senior advisor Michael Khanarian. Topics covered ranged from tips for Wassermen Events, to proper follow up email procedure. Thanks to Zeena for presenting this week's market update. Once again, we had over 100 students attend the event, and we hope to have the same turnout at next week's Morgan Stanley: What is Investment Banking presentation. It will be a great opportunity for many of you to utilize the skills you've learned in the last two workshops. Make sure you 'like' us at facebook.com/nyusternfinancesociety to receive any updates and download our presentations! The Finance Society

In the United Kingdom, figures from the Financial Services Authority (FSA) show that Barclays is the “most-complained-about” bank by customers. There were 251,563 complaints filed against the bank, more than those against any other bank in the first half of this year across the entire UK. If you think this number is high, think again. Apparently, according to Barclays, the bank has already cut complaints by 14% compared to last year. We can only imagine what it was like last year for the bank. With these staggering numbers of complaints year after year, Barclays is finding itself in a difficult position trying to gain more customer satisfaction. But a look at the competitors reveals that Barclays really has to step up its game in order to move down from the crowned seat. Lloyds TSB, a local retail bank in the UK, has received 181,907 complaints in comparison, and Santander UK, a wholly owned subsidiary of the Spanish Santander Group and the largest bank in the UK in terms of deposits...

Cracker Barrel Old Country Store is the latest company to experience an attempted hostile takeover. The attacker is Sardar Biglari, chief executive of Biglari Holdings. The company initiated its interest in Cracker Barrel in June when it acquired a 9.7% stake in the company. Despite the relatively large stake, Biglari Holdings did not provide a clear reason behind the acquisition at the time. Although such an action may not usually be considered suspicious, it is unusual when it involves Mr. Biglari. Biglari Holding’s primary subsidiary, Steak n’ Shake was acquired in a similar fashion: Mr. Biglari acquired a stake in the company, won an election to the board and eventually became chief executive. Similarly, after acquiring the stake in Cracker Barrel, Mr. Biglari attempted to wrangle a position on the Cracker Barrel board. However, he was not successful in this attempt and the Cracker Barrel board did not accept his nomination. Nevertheless, Cracker Barrel is not alone in hostile ...

Local market, view as one of the most defensive market in the world, suffering the same fate as regional market this round. The correction which started early of August had actually hit our shores too. Who say we are in a better position when market downturn? No one raised their hands now. Ha..aaa. Historically, our local market is very " Dull " if foreigners do not participate here. KLCI shoot up because there is an in-flow of foreign funds into Bursa Malaysia. During that time, we are very joyful and assumed that they're in for long-term (until recently). Don't be " syok-sendiri laa " bro. Investors are here because they want to make profit. After achieving their goals, what would they do? Of course, taking profit (and bring down KLCI) and left our country. Then, when is the best time to leave? Now or never. In other words, KLCI went up and go down mainly because of foreign funds. Retail investors definitely do not have the power to muscle the markets. Agr...

Last weekend, Groupon Inc. cut its revenue for 2010 by more than half, from $713 million to down to $312.9 million. This is due to Groupon changing what it consider to be profit. Before, it used the amount of money each customer pays for the coupon that they are buying whereas now it is using the monetary amount that it keeps after its merchants receive their share. The company also lost its COO Margo Georgiadis, who has gone back to her former employer Google. Earlier today, Groupon announced that it would be launching a customer loyalty program. One of the complaints that many merchants had was that users who bought the coupon usually did not buy anything beyond what the coupon allowed and did not becoming returning customers. This customer loyalty program would make it so that users who buy a specific coupon multiple times would eventually receive an even bigger discount to purchase the coupon. With its IPO process still ongoing, Groupon hopes that this program will renew waning int...

Bloomberg Site Visit Finance Society will be hosting a site visit to the Bloomberg building on Friday, October 7th. The visit will include an office tour, a short presentation from Bloomberg HR about internship and career opportunities as well as an hour-long session of training for basic use of the BBG terminal. Limited spots are available so only RSVP if you are absolutely positive that you can go ! The deadline to RSVP is this Friday, September 30th at 11:59pm . We will be meeting at Stern at 10:30am sharp so please be on time. Date: Friday, October 7th, 2011 Time: 10:30 am - 1:00 pm Location: Meet at Stern

The latest scheme out of the European political class is the idea of creating an SPV (Special Purpose Vehicle) that will "leverage up" the $ 400 billion fund that had been previously put in place to "stabilize" the sovereign debt crisis. How will this work? The idea is that you create this SPV (think Fund) and put $ 400 billion into it in the form of equity capital. The SPV then borrows $ 1.2 Trillion from willing bond buyers. That gives you $ 1.6 Trillion to buy up Greek, Spanish, and Italian debt and stave off disaster. So, the theory goes. So who provides the $ 1.2 trillion in debt capital? That is, who are the willing bond buyers who think investing in a vehicle that buys trash will be a winner? If you thought Wall Street cooked up outrageous schemes, try this one on for size. This idea will not work. It is not the magic elixir. No one in his right mind would provide the debt financing for this vehicle. The US, no doubt, will volunteer to put money into...

The so-called income gap between rich and poor is growing we are told. The rich are "sharing disproportionately" in the economic gains we are told. What does this mean? Should we do something about it? If so, what should we do? Imagine, that adopting "Policy A" would double the income of the poorest sixty percent of the population, but, at the same time, quadruple the income of the richest forty percent of the population? Suppose that there was simply no other feasible way to double the income of the poorest sixty percent? Would you favor implementing "Policy A?" After all, "Policy A" increases inequality. The dreaded "income gap" widens under "Policy A." One way to eliminate income inequality -- eliminate the income gap -- is to force the entire citizenry to live at the edge of starvation. This is, more or less, the experiment that the Soviet Union embarked upon in 1917. How did that turn out? The Soviet Union succ...

Come to Finance Society to learn the necessary networking skills that will give you an edge in securing your interview slot and job offers just in time for company visits in October! Date: Thursday, September 29th, 2011 Time: 12:30 pm - 1:45 pm Location: Tisch 200

Take a tour of the Wall Street area with Finance Society on Friday, September 30th . We'll be visiting spots such as Trinity Church , the grave of Alexander Hamilton , the NYSE , the Wall Street Bull , the Federal Reserve and various other financial centers of downtown NY. Limited spots are available for this tour so RSVP on CampusGroups fast! We will be meeting at Stern at 1:15pm while the tour is scheduled to begin at 1:30pm and run for a little under 2 hours. Attendance will be confirmed a few days before the tour. Date: Friday, September 30, 2011 Time: 1:15 pm - 3:30 pm Location: Meet at Stern

If the 100+ student's at this week's event isn't a testament to it's success, the 5 minute consumption of $100 worth of dumplings certainly is. The event began with our first market update of the year, led by Vikram and Nona. Following that, Vivek took the stage to begin our discussion of Time Value of Money, and some of the fundamental principles of finance. Though all the freshman weren't able to keep up with the entire presentation, they certainly indicated that they enjoyed the learning experience. At the end of the presentation, sophomores and juniors were able to meet some of the superstar senior mentors that are involved in this semesters mentor program. The application for the mentor program is being emailed out tonight, so be sure to check it out even if you missed our last meeting! Also, make sure you attend our event next week to learn some great tips and tricks for networking. Finance Society Board

We cannot deny that we are in for another round of hard times since 2008 global financial crisis. Some experts are saying that we are facing the Great Depression wave coming in the next few months, if no concrete efforts put in by global leaders. Meanwhile, some experts think that opportunities arises again and put off the double-dip recession speculation. The downgrading of US's AAA rating re-ignite the fears over the sustainability of its sovereign debt. However, please be mindful that US rating remains extremely sound and reflecting a very low risk of default in the long term, still. USD remain the preferred and most widely traded currency in the foreseeable future, and there is no reason to worry about. Sovereign Risk scaring investors away? Meanwhile, in Eurozone, the situation remains very complex and greater political will is needed to maintain Euro as regional currency. Between Eurozone breaking up and resolving the situation, which one is easier? Of course, the economic ...

The regulatory and litigation environment virtually guarantees that job growth in the US will be anemic for years to come. No macro activities (or short term tax gimmicks) will change the employment picture. The truth is: employers are scared to expand payrolls. They don't want to get sued; they don't want to take on future health care and retirement liabilities that are limitless; they don't want to deal with all of the extra costs that government has imposed on employers. The motives for all of this employee protection were no doubt noble. The latest wrinkle is that Obama's "Job's Plan" permits the unemployed to sue a business that has the temerity to hire someone who already has a job elsewhere instead of hiring an unemployed person. Laws like that make employers leave the playing field. Who wants to hire anyone when the very act of taking on a new hire can trigger litigation that can put you out of business? Why can't the Obama folks get thi...

Other than Obama's new(?) tax plan to tax "millionaires and billionaires," there wasn't much news to point to for an explanation of the nearly 8 percent drop in world equity markets from Tuesday at 2 PM until Thursday afternoon's market close. Greece is old news and so is the weakness in the American economy. Nothing new on this front was announced prior to the selloff. The equity markets seem to be stuck in a very wide trading range since early August. If so, the market probably rallies from here. My own guess continues to be that this is buying time for long term investors. This is not a time to be exiting equity markets, but a time to be planting a large foot into these markets. It is scary. Government policies in western countries have been so absurd for so long that one despairs that things can ever be turned around. But, they can be and, I think, will be. Most Eurozone countries are going to default on their debt and a number of high-profile European...

Shares of Netflix, the company that changed the way millions of people watch films and TV shows, have plummeted 50 percent in the past two months. The company sparked consumer wrath with a price increase as high as 60 percent for some DVD subscribers and the decision to separate its DVD and streaming businesses. Last week, Netflix cuts its subscriber forecast by 1 million. The management has received much criticism for the failure to understand the market and explain decisions to investors and consumers adequately. Competitors are seeking to take advantage of the opportunity and win over disgruntled consumers. Blockbuster is expected to announce its jump into the streaming market this week. Amazon has also been beefing up its streaming offering and seeks to acquire Hulu. Read more here: http://www.reuters.com/article/2011/09/23/us-netflix-blockbuster-idUSTRE78L5VT20110923

Obama will announce his new tax plan today -- more than $ 1.5 trillion in new taxes. Even a Democratically-controlled Congress wouldn't pass something like this in the middle of a recession. You have to wonder if Obama really cares at all. He is wasting everyone's time with proposals like this. He should go back to Martha's Vineyard.

Goodbye Greece. We are getting into the fourth quarter on the Greece situation. The Germans are increasingly unlikely to continue the bailout game for domestic political reasons. Ditto for Greece. The Greeks are more likely to roll back their existing "austerity" measures than enact new ones. The game is just about over. Default is coming soon. Then we look to Spain and Italy and watch that story unfold in much the same manner.

Here comes the President -- one more time: "Tax the Millionaires and Billionaires." Same ole, same ole. Hidden in his tax-the-rich proposal is the virtual elimination of the current municipal bond market, because the Obama proposal essentially eliminates tax exempt interest on municipal bonds. That should help our cities and states! If the Obama package could pass, it would nail the coffin shut on any future American economic progress. We would become the new Japan with no real prospect for economic growth in the next half century. (That may happen anyway. Obama has done a lot of damage already). Fortunately, no one is listening to Obama anymore and new taxes are not in the cards with a Republican House of Representatives. All Obama signifies with the package to be released on Monday is his irrelevance. He doesn't understand the private sector, he doesn't understand the dynamics of the entitlement programs, and he doesn't seem to care anyway. He's stil...

Join the Finance Society this week for an "Introduction to Finance" workshop. Learn the fundamental terms and concepts that will prepare you for upcoming professional and professor presentations. We will cover valuation, accounting, and key finance topics. Also, for sophomores and juniors interested in the mentorship program we will be introducing our superstar senior mentors at the end of the event. This is a great chance to introduce yourselves and find out who you would like to be your mentor, as mentors and mentees are paired based on a mix of both people's preferences. Food will be served. We hope to see you there! Date: Thursday, September 22nd, 2011 Time: 12:30 pm - 1:45 pm Location: Tisch 200

On Sept 7, J.P.Morgan came out a report titled "Global Markets Outlook and Strategy". Here, we would like to share the equity strategy written, which we think is the most sought after reference for investors to strategize during this uncertain times. Below is the excerpt from the said report: "We believe perceptions of a US recession will continue to weigh on equity markets and we thus keep a low amount of risk in our equity portfolio and reduce beta to negative." "The most likely positive catalyst for equity markets in the near term lies with US economic data. This is not happening yet. Our US Economic Activity Surprises Index remains in negative territory, where it has been for 5 straight months (Chart 1). We need to see this index moving to positive territory, and US economic data surprising on the upside, for equity markets to sustain a recovery." 2 reasons why Under-performance The August market slump saw emerging market (EM) equities and small caps u...

Tim Geithner is an embarassment. He spent Friday in Poland lecturing European leaders on the necessity to increase the bailout fund for the bankrupt states of Greece, Spain, and Italy. According to Geithner, failure to expand the bailout fund and, implicitly, to let Greece (and Spain and Italy) to balloon their national debts to even greater heights, would be "catastrophic." Great idea! Add to the debts of Greece, Spain, and Italy! That's a novel way to solve the European debt crisis -- make it bigger. Well, Geithner might respond, that's what we did in the US and look how wonderfully things are going there! This is what happens when politicians think they can solve problems. They make the problems much bigger. This way when things collapse down the road, they won't be around to face the music. Europe will eventually implode. Geithner just doesn't want it to happen on his watch. Unfortunately for the US, we are on "his watch" and the results ...

Kweki Adoboli, a trader at UBS AG, was arrested on September 15th after the firm discovered unauthorized trades that caused a $2 billion loss, and accounting fraud dating back to October 2008. Adoboli worked for UBS's investment bank at the Delta One desk, advising clients on trades that speculated the performance of a basket of securities. He was charged on three accounts. First, he falsified records of exchange traded fund transactions to gain personally. Second, he was charged with false accounting. Finally, he was also charged as acting against the interest of UBS and abusing the power given to someone in his position. Read more here: http://bloom.bg/qEhcJR

A couple of weeks ago, AT&T announced its proposed purchase of T-Mobile. However, the Justice Department filed a lawsuit soon after the announcement, and now has the backing of seven other states. Since the cell phone industry is already dominated by four large companies, the $39 billion merger between two of the four large carriers could cause quite a stir by discouraging new competition and upsetting the current competition. The merger would put AT&T at the number 1 spot, pushing Verizon out of its coveted position, along with frustrating Sprint, the number 3 spot. It might also increase service prices, as T-Mobile is one of the lower-priced carriers. However, AT&T is trying to be cooperative and ensures that it will reach a favorable agreement. It claims that the merger will bring 5000 jobs back to America from overseas and it plans to extend high-speed internet access to 97% of all Americans.

Tim Geithner will be in Poland tomorrow to sell his failed US 2008 program to Europe. Heck, maybe it will work this time. It certainly didn't work in the US, unless you think our situation is a good outcome. All these folks can ever say is that it would been worse. Really? What makes you think that? Letting nature take its course without government interference has worked in every other situation. Only when the government intervenes to "fix things" such as the 1930s in the US and 1990s in Japan,and now the US in the Obama era, have economies failed to recover. Europe is so far gone, it won't matter anyway. All Geither will be able to do is make certain that when the defaults start, Germany and France can be added to the list, because they are the ones that will have to underwrite this stupidity. Oh, by the way, the Federal Reserve is stepping up too. That means the US, which is reeling from massive indebtedness, is now adding to its own woes by helping to back...

The White House released the following statement on Wednesday (Amy Brundage, White House spokesman): "As the president has consistently said, he does not believe that Social Security is a driver of our near and medium term deficits." How can the President of the United States be this misinformed on perhaps the most important issue facing the country?

Tim Geithner wasted a little more taxpayer money -- why not? -- going to Europe this week to have an important meeting with Germany's Angela Merkel to "convince" her how important it is that the Greek situation be contained. You really have to wonder about Tim Geithner. Does he really believe Greece is not going to default? How disconnected is this guy from reality? He still thinks his stimulus plan worked? The lack of understanding of Economics in this White House is without parallel in American history. This White House not only doesn't know what to do, it doesn't even look like they care about whether the economy recovers or not. The so-called "Jobs Plan" is little more than transfer payments to Obama allies paid for, he says, by taxing "millionaires and billionaires," which apparently includes everyone who makes over $ 200,000 per year. The sad fact is the folks below the median income are hit hardest by this White House. Those with ...

Ignoring the volatile and not-so-positive market currently, Public Mutual Bhd launched 3 funds in a row on 6th Sept 2011 to fill investors appetite. They were PB Asia Emerging Growth Fund , PB Bond Fund , and PB Sukuk Fund . Here, we will be only highlighting the equity fund. PB Asia Emerging Growth Fund seeks to achieve capital growth over the medium to long-term period by primarily investing in the securities of emerging small to medium-sized companies in domestic and regional markets. The fund generally maintains equity exposures within a range of 70% to 98% against its NAV. The balance of the fund's NAV may be invested in domestic and foreign fixed income securities and money market instruments. Investment Strategy Generally, companies with reasonable earnings growth prospect are selected. In identifying such companies, the fund relies on fundamental research where financial health, industry prospects, management quality and past track record of the companies are considered. A...

The Finance Society would like to welcome you back to a new semester here at NYU. We are very excited to present to you the brand new structure of the club, as well as many of the new initiatives the club has planned for the semester. Make sure you join us at our kickoff event this Thursday, September 15th, during common hour, to learn more about the club, exciting upcoming professional events, and all the benefits of being a member of NYU's Finance Society. Afterwards, you can meet the current Executive Board, and mingle with other members. Oh, there's also free food! Date: Thursday, September 15th, 2011 Time: 12:30 pm - 1:45 pm Location: Tisch 200

So, where are we now in fixing the Greek debt crisis. Greek government debt maturing in March of 2012 is trading in the open market at 55 cents on the dollar, according to today's Wall Street Journal. The yield on two year Greek debt is now 75 percent, on 10 year paper 20 percent. So, the default has really already occurred. The fiscal deficit for Greece through the first eight months of the year is 22 percent higher than last year. Meanwhile, real GDP is likely to drop 10 percent this year as compared to a fall of 5 percent last year. So, where does it end? -- where it should have ended two years ago when Greek sovereign debt was a lot lower and European banks were in far, far better shape. This impending disaster is a direct result of government policy. Merkel and Sarkozy in cahoots with the ECB (European Central Bank) have served up the myth that somehow they could avert a Greek default through politics. We now see the results of their efforts -- economic disaster for G...

Since the very first second the announcement was made, every quarters are fuming on the extra burden they should bare if it goes through. Here, it involves everyone in Malaysia, even foreign workers who are mostly prepaid subscribers. On this topic, Finance Malaysia has some words to say. Picture taken from bigmacky.wordpress.com In this modern world, mobile phones has become a necessity to us. Some may say: "I can sleep without pillow, or lost my wallet, but I cannot separate from my mobile phone". As such, does it mean that telcos can held you " ransom " on using their services? Since this is called "service tax", did telcos do their part in providing the good services (if not the best)? 3 Reasons why Telcos should not pass through the 6% service tax ? Coverage is suck in certain areas, still. There are rounds of complaints on line-dropping issues. Yup. They fixed it after that. But, the same old problems come back to haunt consumers after awhile. Cust...

There have been many famous epochs in European history and we are now about to witness the dawn of the latest -- the Age of Default. Greece is verging on financial collapse (this week) and there is no longer any viable way to prevent that collapse. Whatever they may call it, default is on the way and soon, certainly before the year is out perhaps much sooner. But, that will just be the beginning, as we move swiftly from country to country throughout the Eurozone. There is some chance, but it is slim, that Germany can itself avoid default. The reason for pessimism on Germany is that Germany will end up absorbing the obligations of its major banks, much as Ireland did two years ago. When the bailer bails out too many bailees, then the bailer needs a bailer. Who will bail out Germany? It will be interesting how this plays out in the US. California, Illinois, and New York have no hope of avoiding bankruptcy. They will, no doubt, appeal to the federal government for relief, which, if...

Bad policy has a way of surviving, even though the results of bad policy may be plain for all to see. The US and the Western countries have managed, by government policies (political policies) to destroy the vibrancy of their economies. Perverse incentives and irrational agency costs so pervade these economies that real economic growth of the kind seen in the nineteenth and twentieth century is not likely to ever return. Many in the Western world applaud the collapse of their own economies. They see economic growth as damaging to the well being of the population. Those who take this view are usually pretty well insulated from the downside of stagnant economic growth. But most of the citizenry are not insulated from that downside. Unemployment and under-employment mostly afflict folks that have no real way to protect themselves. In the US, minorities suffer the most from the collapse of the economy; white college graduates suffer the least. John Maynard Keynes was, in my opinion, ...

I was sorely disappointed that the President did not follow my advice in Thursday night's speech and offer up the repeal of his entire first two and a half years in office. I guess there wasn't much chance of that after all. What he did was promise to push for more of the same measures that have stifled economic recovery in the US and he seemed truly unaware of the real reasons that the economy is adrift. So, at least, you can say one thing for the man -- he is consistent and (intellectually) deaf. So, what's the future look like. If the pundits are right that folks are souring on the tea party, then the future cannot be very good. The main agenda for the tea party is rolling back the size and scope of government and tackling our national debt problems. If that is truly out of favor, then we will eventually be making the kind of headlines that Greece is making, without any savior (Germany) as a prospective bailor. In the short run, though, what happens with the economy?...