CFA Society Chicago NewsBrief
Nov. 19, 2013

Chicago transforms from second city to startup city
The Huffington Post
While the Mayor Rahm Emanuel touts Chicago's diversity, he's also quick to point out that the startup industry has provided the gas for the most recent boom. In 2002, only 11 digital startups were launched in Chicago. In 2012, 367 startups launched — that is one new startup every 24 hours. The Chicago tech industry employs 40,000 people and Emanuel has set a new goal to add another 40,000 new tech jobs in the next decade.More

Aggressive entrepreneurship and active philanthropy — a recipe for success
CFA Chicago
J.B. Pritzker is an entrepreneur, investor and philanthropist. He is managing partner and co-founder of The Pritzker Group and the founder of New World Ventures. Through these firms, he owns and operates companies that have market leadership potential and management teams focused on excellence that value his family's commitment to integrity, honesty and loyalty. More

Roles of commodities in institutional and retail portfolios
CFA Chicago
Commodities investing has typically served as a protector of institutional and retail investor portfolios — Investors employed several different methods to gain diversified exposure. Things have changed though, and a new breed of passive commodity investors have stepped onto the scene. Jodie Gunzberg, S&P Dow Jones Indices, explores the pros and cons to the multiple differing approaches in commodities investing. More

Eliminating misconceptions about the Fed
CFA Chicago
Richard W. Fisher assumed the office of president and CEO of the Federal Reserve Bank of Dallas on April 4, 2005. In this role, Fisher serves as a member of the Federal Open Market Committee, the Federal Reserve's principal monetary policy making group. Join CFA Chicago on Dec. 9 for the Richard W. Fisher Distinguished Speaker Series. Fisher will discuss an array of topics, including: the global and U.S. economic outlook; how the Federal Reserve policymaking committee (the Federal Open Market Committee) deliberates and comes to its conclusions (likely clearing up some misconceived stereotypes); and his perspective of current U.S. monetary policy.More

Putting the projection models used by Merrill Lynch and JP Morgan to use
CFA Chicago
Hamilton Lin, CFA, President and Founder of Wall St. Training, has a broad background in investment banking and mergers and acquisitions. His responsibilities have included analyzing, structuring and negotiating mergers & acquisitions. Lin custom-builds and develops all of the financial and merger models that he uses which have become corporate and departmental standards. Lin has closed over two dozen transactions and has diverse industry experience ranging from oil and gas to insurance to asset management and related sectors. More

Has the climate for climate bonds changed?
CFA Institute's Enterprising Investor
A recent report co-authored by HSBC and the Climate Bonds Initiative, titled Bonds and Climate Change: The State of the Market in 2013, is a strong indication that the climate for climate bonds has improved. In the report, HSBC estimates that to transition to a low-carbon economy, $10 trillion needs to be invested globally between 2010 and 2020. At the same time, many global investors now consider the carbon footprint of prospective investments as a part of their analyses when just a few years ago this was a concern for only a fringe segment of investors. How else is the climate for climate bonds different? Many changes are afoot.More

The Chicago Fed explains Bitcoins
Bitcoins have been in the news a good deal lately, and they get there in ways that suggest they are poised to impact the world of alphaand its pursuers. So it’s good to have a primer: a brief accessible essay that answers the simplest questions, like “what’s a bitcoin?” As a first approximation, says a recent paper by a senior economist in the economic research department at the Federal Reserve Bank of Chicago, a bitcoin is “a string of zeros and ones” stored in a computer file known after its molecular-world analog as a “wallet.”More

BrightTag gets $27 million Yahoo investment
Crain's Chicago Business
Advertising software maker BrightTag Inc. has landed a $27 million investment from one of its biggest customers, Yahoo Japan. The deal will allow BrightTag to more than double its staff, bringing another 100 jobs downtown, Mayor Rahm Emanuel said in announcing the investment on Nov. 15. This latest funding also more than doubles the total investment in the 4-year-old company to $50 million.More

Yellen stands by Fed's low interest rate policies
Chicago Sun-Times
Janet Yellen said Nov. 14 that the U.S. economy has regained ground lost to Great Recession but still needs the Federal Reserve’s support because unemployment remains too high at 7.3 percent. Yellen made those comments in testimony to the Senate Banking Committee, which is considering her nomination to be the next chairman of the Federal Reserve. Her remarks suggest that she plans to stand by the Fed’s extraordinary low interest rate policies begun under current Chairman Ben Bernanke until the economy shows further improvement.More

Pritzker brothers played the feud, now their motto is more like this: Let's make a deal
The Washington Post
Anthony and Jay Robert Pritzker, brothers and heirs to the Hyatt Hotels and Marmon manufacturing fortune, settle in for salads and sandwiches at their 40th-floor office in Chicago’s West Loop. A decade ago, the duo joined family members who allied against their sister, Penny — who’s now President Obama’s commerce secretary — and two cousins. The legal battle broke up the family empire and distributed at least $1.35 billion to each of 11 cousins. Now the brothers say they are putting the discord behind them. They are primed to talk about investing their inheritance in companies that include a distributor of janitorial products and a maker of circumcision devices — much like the grab bag their father and uncles assembled.More

Editorial: Chicago City Council needs a finance team
Chicago Tribune
"There is no limit on the city's general obligation debt, and the sole check and balance is the City Council, a body that rarely pushes back on major mayoral decisions. Since 2007, aldermen have authorized $7.6 billion in general obligation bond issuances without a single dissenting vote." That paragraph appeared in the first installment of Broken Bonds, the Tribune's ongoing series about the staggering debt piled on the shoulders of future Chicagoans. But the part about the City Council rarely pushing back is a recurrent theme in a long list of financial debacles.More

Fed really, really wants to end too big to fail
Quite a few people are discussing the recent speech given by Federal Reserve Chairman Ben Bernanke, titled The Crisis as a Classic Financial Panic. But while everyone is looking at the big dog, the rest of the pack has been out making very interesting noises. Indeed, if you pay attention to Federal Reserve speeches, you might notice a pattern.More

Chicago transforms from second city to startup city
The Huffington Post
While the Mayor Rahm Emanuel touts Chicago's diversity, he's also quick to point out that the startup industry has provided the gas for the most recent boom. In 2002, only 11 digital startups were launched in Chicago. In 2012, 367 startups launched — that is one new startup every 24 hours.More

Rosenberg: 'In a market that knows no fear, I'm reminded of Bob Farrell's investing rules
Business Insider
"In a market that knows no fear," Gluskin Sheff's David Rosenberg writes that he's thinking of a few rules of investing from former legendary Merrill Lynch strategist Bob Farrell. Rosenberg breaks down five of Farrell's critical rules that could seriously impact your next approach to an investment. More

Dallas Fed President Richard Fisher: QE won't last forever
The Federal Reserve's monetary stimulus program cannot continue forever, Richard Fisher, President of the Federal Reserve Bank of Dallas recently told CNBC. "We've changed and impacted the markets because of our intervention and I understand there's sensitivity, but markets should also bear in mind that this program cannot go on forever," he said. "The balance sheet is $4 trillion and there are limits to what the Federal Reserve can do," Fisher, who spoke in Melbourne at an Economic Development for Australia function, added. More

CME hack reawakens electronic threat to financial services firms
The recent cyberattack on CME Group Inc., routed through Hong Kong, is reminding the financial services world of one of its most constant threats to business. The owner of the world’s largest futures markets joined companies from Citigroup Inc. and JPMorgan Chase & Co. to the New York Stock Exchange in revealing that it’s been targeted by hackers. Financial services firms need to boost spending the most to fend off at least 95 percent of attacks, according to a 2012 Bloomberg Government study. More

Rosenberg: Everyone expecting a correction in the stock market faces on big problem
Business Insider
2013 has been a banner year for stocks. We've reached new highs, and most Wall Street analysts think the good times will continue to roll in 2014 and 2015. "This is really the mother of all liquidity rallies," Gluskin Sheff's David Rosenberg wrote to his subscribers recently. Rosenberg points to a number of market warnings signs that often portend a stock market correction. More