CFA Society Chicago NewsBrief
Feb. 4, 2014

How the Fed learned to talk
The New York Times
In his nearly 19 years as chairman of the Federal Reserve, Alan Greenspan was notorious for speaking in an elliptical, oracular, even mystifying style. Mindful that a single errant syllable might cause markets to soar — or tumble — Mr. Greenspan mastered a language, “Fed-speak,” so turgid that it made economics textbooks seem like children’s literature by comparison. Those days are long gone.More

The leadership behind Adams Street
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

Rosenberg — 'Institutional Investor All-Star'
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

Issue's confronting fiduciaries today: Solving a '3-variable problem'
CFA Institute's Enterprising Investor
Acting as a fiduciary is, by definition, a role centered on trust (the word itself is derived from the Latin fiducia meaning “trust” and fidere meaning “to trust”). And nowhere is trust tested more acutely than when it comes to managing money — other people’s money. These days, the role of a fiduciary is also fraught with challenges and potential pitfalls, ranging from investing in challenging market conditions to ensuring all beneficiaries are treated fairly.More

NYT: US federal prosecutors target banks servicing payday lenders
Reuters via Chicago Tribune
The U.S. justice department is exploring civil and criminal actions against more than 50 big and small banks that conduct business with payday lenders, who are being increasingly scrutinized by regulators, the New York Times reported, citing government officials. Under a new program, "Operation Choke Point," the department is checking banks over whether they enabled payday lenders to illegally siphon billions of dollars from U.S. consumers' checking accounts, the newspaper said, citing state and federal officials briefed on the investigation.More

The Federal Reserve did what it said it would do in January
Seeking Alpha
Officials at the Federal Reserve said in December that the Fed would begin to "taper" its purchases of securities in January. The Fed did as the officials said it would. From Jan. 1 to Jan. 29 the Federal Reserve showed a net increase in its holdings of securities by $74.1 billion. In December Fed officials said that it would purchase only $75.0 billion in securities in January, down from its target amount of purchases in all of 2013 of $85.0 billion per month.More

What a Chinese executive can teach Chicago
Chicago Tribune
Suited up in crimson soccer togs, eager to join his company's weekly match at an indoor arena in Hoffman Estates, Chinese business executive Pin Ni took a few minutes to reflect on his latest plunge into unknown waters. Two decades ago, he led China's largest auto-parts-maker into the Chicago region, establishing a sprawling U.S. beachhead for the company and making a name for himself as a trailblazer in the process. Now he is again poised to be a front-runner in the realm of Chinese foreign investment, taking the American subsidiary he heads on a risky new journey, a sort of "Globalization, Phase Two."More

Chicago's Pritzker group talks NYC
Crain's New York Business
Over the past few years, more and more West Coast venture firms have established footholds in New York City, attracted by its growing importance as a technology hotspot. Now, the biggest venture firm in Chicago, Pritzker Group Venture Capital, is setting down roots here as it expands its geographic reach and broadens its investment strategy. Since its founding 18 years ago by J.B and Anthony Pritzker, two scions of the Hyatt Hotel chain family, the Pritzker Group has invested $400 million in about 100 companies.More

David Rosenberg on Fed's Ben Bernanke: He gets a C-
Financial Post
Gluskin Sheff’s David Rosenberg spent a good chunk of his note assessing the legacy of Ben Bernanke as the FOMC announces its final monetary policy decision under his leadership. “I’m sure the historians will provide their own assessment with the passage of time,” Rosenberg wrote in a note to clients. “I mean, look at how we view Alan Greenspan today compared to all the accolades given exactly eight years ago when he was dubbed the ‘maestro.’”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

Surge in shareholder activism straining investors' resources
Pensions & Investments
The proxy season has triggered a gold rush of activist institutional investors challenging companies. But this swell in corporate governance activity could strain investors' resources, especially related to executive pay issues and shareholder engagements. Shareholders have been bolstered by recent investment returns in companies in which activists have been involved, said Patrick McGurn, special counsel, Institutional Shareholder Services Inc., Rockville, Md. More

How the Fed learned to talk
The New York Times
In his nearly 19 years as chairman of the Federal Reserve, Alan Greenspan was notorious for speaking in an elliptical, oracular, even mystifying style. Mindful that a single errant syllable might cause markets to soar — or tumble — Mr. Greenspan mastered a language, “Fed-speak.”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.”)More

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."More

Local startup Rocketmiles raises $6.5 million from Chicago Ventures, CEO
Chicago Sun-Times
Chicago travel loyalty rewards startup Rocketmiles has raised $6.5 million in new venture funding that will expand its offerings to international markets. The company, which launched its mileage-rewards program in April 2013, has raised a total of $8.5 million from investors ranging from locally-based Chicago Ventures, TechStars Chicago Managing Director Troy Henikoff and CEO Sam Yagan, to Menlo Park, Calif.-based August Capital and Cambridge, Mass.-based Atlas Venture.More

CBOE Futures Exchange to launch short-term VIX futures with weekly expirations
Chicago Board Options Exchange developed the index in response to demand for Weeklys options generally, and volatility contracts that measure a shorter time period in particular. Like CBOE's flagship CBOE Volatility Index (VIX Index), the Short-Term VIX Index reflects investors' consensus view of expected stock market volatility using CBOE's proprietary VIX methodology. Both indexes use S&P 500 Index (SPX) options in their calculations. More