CFA Society Chicago NewsBrief
Jan. 28, 2014

America's biggest bank wants in (on this truly free currency)
Money Morning
As Bitcoin matures and its acceptance grows, it's likely to become a valid form of money. And that's certainly helped to draw a lot of attention. On Nov. 18, 2013, the Department of Justice said Bitcoin can be a "legal means of exchange." Bernanke himself even stated in a letter to the Senate panel that Bitcoin "may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system." François R. Velde, senior economist of the Federal Reserve in Chicago, labeled it as "an elegant solution to the problem of creating a digital currency."More

Private equity topics with Bon
CFA Chicago
T. Bondurant "Bon" French, CFA, is responsible for the management of Adams Street Partners and actively participates as an investment professional. French has been with Adams Street Partners and its predecessor organizations since 1980 and has been instrumental in the development of its private equity investment strategies, fund management and client service. Join CFA Chicago on Feb. 25 for the T. Bondurant "Bon" French Distinguished Speaker Series.More

MSNBC's 'most accurate forecaster' has something to say
CFA Chicago
Join CFA Chicago on Tues., April 29 from 12 - 1 p.m. for the Distinguished Speaker Series featuring David Rosenberg, Chief Economist and Strategist for Gluskin Sheff and Associates. Fees for members are $45 dollars, the student-members fee is $10, and non-members are welcome to join for $55. This series also qualifies for credit under the guidelines for the CFA Institute Professional Development Program.More

Uber's surge pricing a study in important investment topic: Consumer surplus
CFA Institute's Enterprising Investor
Uber, the San Francisco–based start-up whose mobile app allows people to hail taxis on their smartphones, has had its fair share of bad press lately. (See: “Is Uber’s Surge-Pricing an Example of High-Tech Gouging?” and “Taxi Drivers Turn Violent against Uber in Paris.”) At the heart of the issue is something known as “surge pricing.” Without commenting on the merits of Uber’s specific business plan or about the ethics of its economics, its story provides a case study in an important investment topic: the consumer surplus.More

Bernanke leaves legacy of stimulus and stagnation
Los Angeles Times
As Ben S. Bernanke walks away from the Federal Reserve's marble headquarters on the Mall after presiding over his last policy meeting Jan. 29, he will leave behind a bittersweet legacy. On one hand, his unprecedented efforts to drive down interest rates and stimulate the economy are widely credited by his peers with saving the nation from a second Depression, strengthening the economic recovery and leaving the nation's financial condition poised to take off this year.More

Investor beware: What the new jobs act means to you
Kiplinger's Personal Finance via Chicago Tribune
The Jumpstart Our Business Startups Act (better known as the JOBS Act of 2012) makes possible a mouthwatering variety of new investment options. But, says Chicago securities lawyer Andrew Stoltmann, the new law also creates "a disaster waiting to happen." The most controversial piece of the law concerns "crowd funding." The crowd-funding rules, which are expected to win approval and go into effect in the spring of 2014, would allow small investors to buy securities in privately held firms that are exempt from many of the stringent disclosure requirements that apply to publicly traded securities.More

The stock market correction is here, strategist says
Financial Post
The correction many have been waiting for appears to have arrived, according to Tony Dwyer, U.S. portfolio strategist at Canaccord Genuity. He believes in order for this meaningful equity market pullback to last more than a day, there must be a fear of fundamental change. And Mr. Dwyer thinks enough ammunition is being provided by weak Chinese manufacturing data, more tapering from the Federal Reserve at its upcoming meeting, and U.S. Treasury Secretary Jack Lew renewing debt ceiling fears.More

Bank of America's trading practices have been probed, filing shows
CNBC
The U.S. Department of Justice and the Commodity Futures Trading Commission have both held investigations into whether Bank of America engaged in improper trading by doing its own futures trades ahead of executing large orders for clients, according to a regulatory filing.More

National venture capital firms invest in Chicago tech
Medill Report's Chicago
Investments in Chicago’s digital start-up sector nearly doubled in 2013 as angel investors and venture capitalists invested in technology companies around the city. Funding increased to $1.06 billion from $391 million in 2012, according to a report by Built In Chicago, a local online start-up community.More

Wall Street's brightest minds reveal their best investment ideas for the next decade
Seattle Pi
Most agree that we have witnessed the end of a massive, three-decade bull market in bonds. Some are also skeptical of the potential for returns in the stock market in the years ahead, given common valuation multiples that are currently above historical averages.More

Illinois pension law saves $15 billion less than first thought
Chicago Tribune
New calculations show the state will save about $15 billion less than initially projected from the controversial major government worker pension overhaul that lawmakers and Democratic Gov. Pat Quinn approved last month. Critics who say the pension law didn’t go far enough cried that supporters are “backtracking” on the savings and point to the change as a sign more money-saving changes to public employee retirement systems will be needed.More

PrivateBank's new customer: Other banks
Crain's Chicago Business
Six years after the financial crisis dried up credit for community banks, PrivateBank & Trust is stepping into the breach. The growing Chicago-based commercial bank has hired four veteran local bankers to launch a specialized group to lend to the area's numerous small banks, as well as non-bank firms like hedge funds and asset managers. PrivateBank aims to claim the crown once worn by LaSalle Bank, which dominated local lending to banks before its 2007 sale to Bank of America Corp. of Charlotte, N.C. Former LaSalle Bank CEO and current PrivateBank Chairman Norman Bobins was renowned for his deep knowledge of even the smallest area banks and will play a role in the new initiative, PrivateBank CEO Larry Richman says. More

Old Second Bank insiders would profit on former federal bailout shares
Crain's Chicago Business
Six directors of the parent of Aurora-based Old Second National Bank would collect a substantial profit if the company goes forward with a plan to issue $70 million in new stock to finance the repurchase of what formerly were federal bailout shares, now held by the directors and other private investors. Old Second Bancorp Inc. on Jan. 17 filed a plan with the Securities and Exchange Commission that would more than double its number of common shares in order to reduce some of the financial obligations of the holding company.More