Thursday, 31 May 2012

On the Other Side of the Desk

Occasionally, someone will ask me to give them my number one piece of advice for becoming a better teacher. Teaching is such a complex art that I really think that is close to impossible. However, I do think there is one thing that every teacher (and I do mean every teacher) should do that will help them immediately to become a better teacher. Can you believe it? I’m almost guaranteeing you success with just one piece of advice.

Every teacher should get a reality check by enrolling as a student each year in a class in something about which they have no real knowledge. In other words, they should walk around to the other side of the desk and put themselves into the student role just as a reminder of how it feels to be the struggling one. I don’t mean for a history teacher to take another history class. There’s no benefit. I don’t mean for an English teacher to take a class in poetry. I mean for a history teacher or an English teacher to take a class in quantum mechanics.

Two weeks ago, I started a class in tai chi. For those of you who do not know, tai chi is a moving meditation.

I cannot tell you how happy I am that my teacher is patient.
I cannot tell you how happy I am that my teacher is willing to answer even the dumbest question.
I cannot tell you how happy I am that my teacher always repeats the movements slowly until we all catch on.
I cannot tell you how happy I am that my teacher is a kind person and a very good teacher.

I am not athletic. I have never had a good sense of body awareness. For me, this class is a real challenge.

The teacher will make a small movement that looks ever so easy when he does it. He does it without any strain or thought. Then, I’ll try to make that same slight movement and just cannot get it right. Suddenly, his simple has become my complex.

He doesn’t make fun of me. He doesn’t roll his eyes at me. He doesn’t imply that I’m a loser. He doesn’t call on a better student to show me up. He doesn’t become frustrated or impatient. He gently takes my hands in his and he moves them for me to show me what I am supposed to be doing. And, sure enough, when he leads me through it enough times, I can do it. And, I have this wonderful sense that I have managed to accomplish something. I’m excited and ready to learn more. I always leave the room feeling better than when I walked in. But, really it was the teacher who had the success more than me.

I believe that there should be a law that every teacher has to take one class each year that is out of that person’s comfort zone. I think the quality of teaching in our world would automatically get better if we all did that.

We all get so settled into the teacher role that we really lose track of what it is like to be the student. It is awfully hard to be a great teacher if you don’t understand what it feels like to be a student.

Okay, there it is -- there's your one piece of advice.   You can take it or leave it.   However, don't ignore the advice and then tell me that you want to become a better teacher.  

This is not new advice from me.   A few years back I wrote a teaching tips book and in one of those essays I talked about my habit of taking classes just to remind myself of what students experience in my classes. Here’s what I said at that time.

“Recently, I took a class on large-format cameras. Five of us were enrolled. This group took photographs for one entire day. I worked to replicate every step demonstrated by the teacher. The film was developed overnight so that we could discuss the results. On the following day, the teacher started class by saying, ‘Four of the film packs came out great but, for one, every picture was blank.’ It was my pictures that had been ruined; I felt so dumb.

“The following week, I taught my own classes with more patience and care. Many students face such heavy frustrations almost every day; their confidence is shaken constantly. Understanding the student perspective can help as you organize a class. How long has it been since you took a course, especially one where your knowledge and ability were strictly limited? Occasionally, feeling lost is a good position for a teacher.”

Wednesday, 30 May 2012

Department of "What Were They Thinking?"

I'm back.

Unknown University has a new initiative.  They want to encourage more "interdisciplinary" research.  So, they're trying to hire in groups centered around "big" topics.   So what do they call this approach?

"Cluster Hires"

It's too easy.   I'm not going there.  

Monday, 28 May 2012

Web 2.0 Comes of Age..Or Does It? NASDAQ:FB fizzles.

It was supposed to be the golden moment of the new Internet Age. No tech bubble--we were going to get it right this time. Investors were more sensible now, and knew how to value web-based companies which had finally figured out how to monetize. The stage was set, and we would come out of the gates all guns blazing.

Pffft. Seriously? There are a few times that Wall St. drinks its own Kool-Aid on a macro level (re: housing crisis, tech bubble, S&L crisis, etc.), but by and large, it is good at weeding out singularly irrational events. Not this time.

Even the lead up to IPO was suspect. After months of speculation that Facebook would have to settle below the psychological $100B mark, underwriters unexpectedly boosted the issuance by 85M shares to 420M, and raised the expected range to $34-$38, tipping the valuation into nine-figure land; it raised a few eyebrows that the decision was made in the middle of a roadshow, but the changes were pegged to increased interest by PMMs. Then, GM withdrew $10M of ads, citing insufficient marketing value, echoing Morgan Stanley's own consumer IT analyst who projected declining revenue. The decision stoked fears about long-term profitability as Q1 2012 profits actually declined from Q4 2011 levels. 

On the big day itself, the debut was delayed by half an hour, trades were unexpectedly cancelled and then filled at lower prices hours later, and news that many institutional investors were flipping their allocations spooked the market. It is estimated that Morgan Stanley spent close to a billion dollars propping the price above the IPO level of $38. FB then went into freefall the next day, and mom-and-pop investors lost millions (retail investors had over 20% of the issuance, an unusually high number). It remains below $38.

All told, however, the decline is indicative that underwriters maximized value for insiders--a first-day pop is cited as evidence the IPO could have been priced higher. Mark Z. is now worth over $18B--he married college sweetheart Priscilla Chan this weekend, presumably delaying for favorable tax purposes. And while concerns remain over making money from the move to mobile and cracking the China market, analysts remain optimistic, with the median 1-yr estimate at $44 (the 21 underwriters aren't allowed to issue reports until the end of the lock-in period in 45 days). Maybe we'll get it right this time around.

Tuesday, 22 May 2012

We Have Met The Enemy and He Is Us

My department chair (Darrell Walden) sent out the following link to an article from The Washington Post. You may have to register to read it but it is well worth your time. (If the link doesn’t work, just go to and search for “Is college too easy” as of May 21, 2012.)

Darrell summarizes the story quite well in just a few words. “Over the past half-century, the amount of time college students actually study — read, write and otherwise prepare for class — has dwindled from 24 hours a week to about 15, survey data show. And that invites a question: Has college become too easy?”

As I travel around the country talking about teaching, I very frequently hear faculty members complain that “college students are not like they used to be.” My feeling (after 41 years in this job) has always been that college students really do not change much over time. However, as this article pretty well documents, what we ask our students to do to get a good grade has become less and less demanding. For many students, college is barely a part-time job. The students have not changed but a college education has.

Two words say it all: grade inflation.

If you don't demand much, don't be surprised when students give you exactly that much.  

I have even heard the speculation that the heavy student drinking that is prevalent on so many college campuses today is partially a result of the boredom that comes from being under challenged.

Okay, I have lived long enough to already know the response to my rant here.
---Polls will tell you that most people believe public education is falling apart nationally but that their own local school does a pretty good job.
---Polls will also tell you (at least I’ve been told this) that most people will argue that Congress is completely incompetent but their own member of Congress does a pretty decent job.

So, my guess is that a lot of college faculty members are going to read The Washington Post and respond “Yes, most students don’t work very hard these days but my class is the exception. If every class was as difficult as mine, college education would be much better.”

Hmm, that always reminds me of Lake Wobegon where all the children are above average.

Is the problem that our students are lazy or is the problem that we do not push our students enough?

Either way, are we willing to allow our students to "earn" a college degree with so much less work?

I’ll leave that up to you to decide.

Monday, 14 May 2012

Now, That Is a Very Good Question

A good friend of mine who teaches at a university in Texas wrote to me a few days ago and posed the following question. My guess is that all college teachers have felt this same way at times over the years. It is very difficult to get students to leap tall buildings with a single bound if you can’t get them to prepare for class.

“For the past two semesters I have become so totally frustrated with the students in my classes. They do NOT come to class prepared AT ALL. They don't read the book. Some of them don't even get the book until the 3rd or 4th week of the semester.

“Do you have a secret for getting students to read their textbook, especially in Intermediate? Do you threaten them with hanging at dawn? Do you give them a quiz every class?

“I really want my fall Intermediate students to develop some better habits, so I'm looking for a way to facilitate that.”

Okay, I think the first way to approach this quandary is to consider where most of the students are coming from in your class. They rarely pop into a college class without some well-formed habits.

Many college students have spent the previous 13-16 years in school. Over that time, they have had many teachers. They have had a lot of training at being students. My guess is that all of those previous teachers have asked the students to read chapters in their textbook before class. Unfortunately, it is likely that this work has not proven to be useful to the student. If it had been useful in the past, they would still be doing it.

If the rat rings a bell and gets cheese, the rat will continue to ring the bell.
If the rat rings a bell and does not get cheese, the rat has little reason to keep ringing the bell.

Before they got to you, your students learned that ringing the bell (reading the textbook) did not get them any cheese. Trust me, they are much smarter than the rats; they stopped reading their textbooks long before they got to you.

And, when you tell them, “you need to read the textbook,” they say (in the back of their minds) “yeah, right, I’ve heard that for years; what good is that going to do me?”

When I was a sophomore in college, my Economics professor said “Read chapter one” and I read chapter one. As far as I could tell, his lectures basically told me what I needed to know in chapter one. For the life of me, I couldn’t see what good having read the chapter in advance did me. Then, he said “Read chapter two” and I read chapter two. And, again, in class I couldn’t see that he did anything other than tell me what I needed to know in that chapter. About the time he said “Read chapter three,” I tossed the textbook in the back of my closet and spent my time doing something where the reward mechanism was more obvious.

The problem is especially acute in a course like intermediate accounting where the material is so complex that most normal college students will get lost after only a few pages. More than one student has asked me over the years “what good does it do me to read something that I don’t understand?”

Fair question.

I probably sound like your students. Should I have been the subject of a hanging at dawn for my work in Economics? Well, maybe, but I doubt it. I did well enough in that class by just listening to what he had to say and never understood why I had paid my money to buy that book.

I didn’t get any cheese by ringing that particular bell.  So, I stopped ringing it.

So, here is what I do in my own classes.

--I only give assignments one class ahead. I want the students to know that this specific assignment has an immediate purpose. That purpose is not for some vague point in time down the road. That assignment is for the upcoming class.   We have about 41 classes -- we have about 41 assignment sheets.

--When I give reading assignments, I try to cut it down to what we are going to cover in the following class. “Read page 310 and 311 and the first 3 paragraphs of 313 and the last paragraph on page 315.” I want the students to understand that the readings have been selected to connect directly to the next class. I want them to read so they are ready for that class.

--I give them specific questions in advance based on those sections of the reading: “Read pages 310 and 311 and then be willing to discuss the following three questions.”

--I try to make sure the readings give the student a fighting chance to answer the question that I have presented.    There's no reason to read pages 310 and 311 if they don't help work the assigned problems.

--I then call on them in class to answer those assigned questions. I want there to be a very clear connection between the textbook assignment and their comfort level in class. If they get the question correct, I let them know right away “Good job, you did a good job coming to understand that principle.” If they don’t answer the question correctly but they’ve clearly tried, I work with them to get to a correct answer.   In the end, I just want them to learn as quickly and deeply as possible.

--Finally, I try very hard to make sure that the tests are more likely to reward those students who prepared well for class. I had a student recently describe my class in a way that I loved: “Success in class each day leads to success on the tests.” Okay, for most students, there’s the real cheese. If you can get students to believe in that connection between preparation, class, and tests, they can amaze you with what they can accomplish.

And, of course, then the question is: what do you do if you call on a student who has not prepared as you have asked?

---Well, the first time, probably nothing.   Everyone has a day off now and then.
---The second time, I am more likely to show my displeasure: “I expect better from you. You can do this but you have to try.”
---The third time, I call the student into my office and ask them straight out why they are in my class if they are not willing to do the work. I want them to realize that learning requires work.   I try to make a clear point that preparation is required and I’m not wasting my time trying to teach students who care so little that they are unwilling to prepare.

Does it work? Do my students prepare for class? Not always but most of the time it does. If I fuss at a student in class or in my office, they often stare at me with a puzzled look on their face: “Oh, you are not like previous teachers. You really do expect me to prepare. Well, okay, if you make it worth my while, I will.”

The rat has to have a reason to ring that bell. So, consider the question:   How can you bring some cheese into their preparation?

Wednesday, 9 May 2012

The Prize Will Not Be Sent To You

I was going through some files this evening and discovered a quote that I received some years back from a person in India .  There's a lot to like about this quote but I especially appreciate the line:  "The man who grasps principles can successfully select his own methods."   I sometimes think in teaching (and maybe many other things in life) that we are too obsessed with finding the perfect method. 

"Without ambition one starts nothing. Without work one finishes nothing. The prize will not be sent to you. You have to win it. The man who knows how will always have a job. The man who also knows why will always be his boss. As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble".      Ralph Waldo Emerson

Monday, 7 May 2012

Super-Powered Premier

I may officially be the only person left on the planet that has yet to see The Avengers after Disney reported the film took in $207 million in its opening weekend. But naturally, this number is once again going to be shattered when the Dark Knight Rises releases in a few months. See a trend here? Like clockwork, the blockbuster films of the year seems to "SHATTER" the hauls of past films. For a while, the opening weekend was a pretty stable affair, with Spiderman-2 being the benchmark of success. So what happened since then? For one, cinemas became these cash cows that doubled their ticket prices. I can't even watch a movie in New York without clearing 15 bucks, and even back home in Florida, 10-12 bucks for a ticket makes it twice as easy for a movie to take in these hauls compared to Spiderman-2 when movie tickets were $6-7. Second reason why these new movies are raking in the dough: 3-D and IMAX. Back in the day, when commercials said "in theaters and IMAX near you," IMAX was like this mythical concept that barely anyone went to see. Now it's become the ubiquitous measure of AWESOME and tickets sell out even before the movie gets out (a la Dark Knight Rises). The landscape for a movie to break records is ten times easier now than it was a few years back. Even if the Avengers is a great movie, and I'm sure it is, I'm not sure if these numbers should impress compared to the achievements of old. But maybe I'm just bitter that it beat Harry Potter's record. Wizards are cooler.

-Aureen Sarker (Photo Credit: Disney)

Sunday, 6 May 2012

Monetizing Tumblr

                Tumblr, the place where memes turn viral, the place where we can find millions of Asians sleeping in university libraries (many of which are from NYU), and whatshouldwecallme—enough said. With 54 million registered users, people find it is a nice complement to Facebook as it is a channel for expression and Facebook is more of a channel for communication.
With such a huge following, Tumblr has announced it would start monetizing the site. Instead of placing traditional advertisements in random places in each website, they will allow companies to promote pages and specific posts as it is a more subtle and integrated way of connected with users. The issue is, users have been commercial-free since 2007 so they need to figure out a way to advertise without annoying the consumers.
While Tumblr is sort of walking on eggshells, I think this is a great decision and the only logical decisions after amassing such a huge audience. David Karp, Tumblr’s founder and CEO states that some firms are offering $25,000 just to promote a post. It is clear how beneficial this venture can be but they need to make sure the sponsored posts are as out of the way as possible while still maintaining a decent click-thru percentage. 

Saturday, 5 May 2012

April’s Jobs Report: A Thorn In Obama’s side or A Thorn on the Rose of His Reelection?

Yesterday, the US bureau of labor gave a disappointing jobs report.  In April, only an additional 115,000 workers were added to nonfarm payrolls, making it the weakest gain in the last six months.  Additionally, the unemployment rate declined to 8.1% due to a significant number of people no longer seeking work.  In response to the poor report, the major indexes were in the red across the board with the S&P 500 dropping 1.6% for the day.  Also in response to the negative report, the yield on the 10-year Treasure note declined from 1.93% to 1.88%, and the price of oil dropped to its lowest level in almost six months.    
            Obama’s 2012 campaign had been shaping up very well before yesterday with a cornerstone of his campaign being the recovery in the US economy since his election to office in ’08.  However, Friday has brought doubt on whether the United States really is in a recovery at all.  In response to the report, Roger Altman of Evercore Partners said, We need 200,000 to 250,000 jobs to really make this, or to illustrate that this is a healthy and strongish recovery.  We’re nowhere near that.”  Expected Republican nominee Mitt Romney has already turned the report into campaign material.  In reaction to the report, he said, “This is way, way, way off from what should happen in a normal recovery.  We see to be slowing down, not speeding up.”  Also in response to the report, the Obama campaign has tried to emphasize the private sector’s feat in adding jobs for each of the past 26 months.    
            The quick reactions by both parties make it clear that the economy will be the foremost issue in the 2012 election.  The more negativity there is surrounding the economy in the next few months, the greater the chances of President Obama losing the election.  Psychologically, this should prove a very strong position for President Obama.  His reelection appears aligned with the incentives of all Americans to have a stronger economy.    

-Kyle Cameron

Alternative IPOs: Rethinking Capital Raising

           With all of the news surrounding recent IPOs like Groupon, Yelp, and Facebook, it is easy for us to forget the larger picture:  There are significantly less IPOs now, then there were 10 years ago, and the market for initial public offerings has effectively been slow.  The IPO market has changed in the past decade for a number of reasons.  Most importantly, there are simply less IPO underwriters now than there were before.  Major players in the IPO space such as Hambrecht & Quist; Alex, Brown; Robertson Stephens and Montgomery Securities have either merged or been consolidated into larger banks than focus on larger deals.  This focus on larger deals means those underwriters are no longer interested in the smaller initial public offerings and do not bother doing investment research on small-cap companies.  We can see this shift to larger deals clearly.  In the 1990s, the average deal size for a NASDAQ IPO was $35 million, while in 2006, this figured ballooned to $115 million.  Additionally, the average market cap for these companies went from $55 million in the 1990s to $330 million in 2006.  Today, the IPO market has no interest in companies that are strong and growing but could be valued at less than $250 million.
            The inability go public to raise equity can prove quite a challenge to these small but growing companies.  Luckily, however, there is an alternative – aptly named, an alternative IPO.  In an alternative IPO, a company often completes a reverse merger and uses PIPE financing.  In a reverse merger, a public entity “acquires” the stock of a private company in exchange for about 90% to 95% of the shares of the public entity.  The newly merged company then takes on the name of the private company and installs the private company’s management. 
            Once the company has effectively gone public through a reverse merger it often uses PIPE financing to actually raise the capital it seeks.  A private investment in a public entity (PIPEs) is typically structured to allow an investor to purchase stock at a discount to the market price making it often highly lucrative for investors.  Furthermore, the speed of PIPE financing makes it highly desirable for the companies.
            In an always-changing market, we need to understand some of the underlying market dynamics.  Alternative IPOs provide an intriguing opportunity for both companies and investors alike. 

-Kyle Cameron

Playing the Prediction Markets

We have markets to trade thousands of stocks, bonds and derivatives, but Intrade is taking ‘market making’ to a whole new level. Intrade allows people to play the prediction markets, in which you buy or sell into hundreds of real world events. Instead of searching for a company’s intrinsic value, an investor in the prediction markets is simply finding the probability of an uncertain future events from occurring. Some examples of markets include Barack Obama being reelected or the Avengers grossing over $175M in its opening weekend. Markets are always defined on a yes or no basis, such that you buy shares of an event you believe is going to happen and sell otherwise. If the event does happen, then the market is settled at $10 and if it does not then it is settled at $0. The idea for this range being that a market price of $4 indicates a 40% probability of the event actually occurring.

The evolution of prediction markets brings the world of investing and trading to an entire different audience. While once only those knowledgeable in finance had the skills to accurately price a stock or option, now any avid American Idol watcher can bet on the next winner or any keen physicist can bet on the Higgs Boson particle being found before December 31, 2012. Further, if there are no markets of which you are familiar with, you can easily create one. However, the large problem with such an unregulated market is the even larger information asymmetry. While you may track all the news and research developments coming out of CERN and make your bet on the Higgs Boson, there’s nothing stopping an actual CERN scientist involved in the project on putting money on the same outcome- bringing insider trading to an entirely different level. Beyond that, since there are only 82,000 users in the Intrade platform, liquidity becomes a big issue and an individual may actually be able to move markets if they invest a moderate amount of money into an outcome. Whether there are controls in place for these kinds of behaviors is either unknown or very vaguely stated on the website, but regardless good things to think about before putting your savings on the probability of NASA announcing the discovery of extraterrestrial life by the end of the year. 

-Vivien Sung

Friday, 4 May 2012

Spaniards in Search

While landing an internship here at Stern may be difficult for some, things aren’t as bad as they seem. The majority of us do find somethingpost-graduation, somewhere in the U.S. However, the same cannot be said for people aged 25 and under in Spain. Statistics show that over 50% of this demographic are unemployed. The reason for this is the end of Spain’s construction boom, where many teenagers found and eventually lost their jobs.
The major problem is that many people in this demographic had left school early to take advantage of the abundance of construction jobs so they are now left without an income and without a degree. Moreover, some are graduating with degrees but are still left unemployed. Companies also have little incentive to hire young workers as the older employees have more experience in the field. As a result, experts estimate that around 500,000 young laborers will leave the country every year until 2020 just to make a living.
The most popular destination for new jobs for Spaniards is Mexico. There are some that argue that the young workers can learn a lot from being abroad and bring new skills back to Spain in the future, but I see a new problem arising. Despite the decrease in illegal immigration from Mexico to the U.S. in recent years, the increase in Spaniards could saturate the job market in Mexico and could potentially rekindle our immigration problem. But as our economy picks up and more and more positions become available, illegal immigration might not cause such an uproar and hopefully will be a thing of the past. 

Thursday, 3 May 2012

Yelp Profits But Shares Drop

Yelp is down 8.% after being one of the best IPO performers this year. Even though the company beat revenue forecasts, it is clear that its operations are profitable. Analysts still aren’t’ convinced by Yelp, even though Yelp has had fourth straight quarter of revenue increases. Will Yelp be able to beat competition coming from Google? While its revenue is increasing, it is not profitable and the competition from other companies such as Google is increasing. Google recently bought Zagat, a fancier review competitor. And Yelp also gains most of its traffic from Google itself, so if Google heavily promotes Zagat, Yelp’s consumers group could be at risk. Yelp clearly needs to be able to innovate and set itself apart from the Google powerhouse in order to maintain its advantage of its competition. As the leader currently, they should be able to maintain their consumer base for a while because they are so heavily consumer focused, with their consumers providing reviews.

While many technology companies have outstanding IPOs, it seems that many are not able to maintain their success or convince investors that they will be sustainable and profitable in the long run.

-Evan Wang 

UK in Recession

Both UK manufacturing and UK service firms growth have slowed down in April. Export orders fell in the U.S., euro zone, and Asia for the UK manufacturing group, but employment for both the services industry and the manufacturing sector grew in April. The slowing of manufacturing growth will probably continue to slow even further with the infrastructure for their 2012 Olympic Games being completed and as the Olympics draw closer. However, not only the UK faltered though, as the Eurozone saw manufacturers decline throughout; Spain and Italy’s manufacturing are under the pressure of huge debts and decreasing orders. However, in Asia there has been increased production to meet growing demand, and the growth of U.S. manufacturing has increased as well, so it seems that the debt crisis in Europe is severely dampening its growth. India, South Korea, China, and Taiwan’s growth this month showed stronger manufacturing activity.

The Bank of England says that this year Britain’s economy should start growing this year, but Britain is back in recession because of two consecutive quarters of negative growth. GDP has shrank by .2% in this quarter, and Britain hopes for Eurozone stability in order to regain confidence among businesses and households.

-Evan Wang

Chinese GDP-Stocks Market Paradox

Everyone knows that China has one of the largest gross domestic product growth rates, but is everyone aware that the Chinese stocks actually do not match up with these rosy growth rates?

The Chinese securities regulator announced new stock listing rules over the weekend as it tried to end a decade of lousy stock returns.  There seems to be paradox common to most emerging markets, that the high GDP growth often carries an underperforming equity market with it.  For example, China’s 2011 GDP was four times its figure in 2010; however, the Shanghai Composite Index only rose about 46% over the past decade.  Why is this happening?

First, China’s stock market is not mature enough.  In fact, it was only established two decades ago, so we cannot expect it to behave like other long-established markets in developed countries.  Second, as with many developing countries, there is the problem of legal and political problem, i.e. corruption.  A 2002 study of China’s stock market by Dow Jones Indexes highlighted the problem of insider trading in China.  Investors who could gain in the Chinese stock markets used to be the powerful ones who could obtain state-critical information before the public.  Now, with the securities regulator’s vow to destroy all insider trading, reform IPO system and introduce more institutional investors, we hope to see the Chinese stock market mature soon and become another exciting hub of investments.

~Sophie Tam

Diminishing Hope for Sarkozy's Reelection

Sarkozy, the first incumbent not to win in the first round since 1958 must gain the support of over half of the radical right in order to win, while Hollande must make up for a generally poor showing for the left where communist Jean-Luc Melenchon only gained 11.1 percent of the vote. Surveys predict that Hollande will beat out Sarkozy by a 56 percent to 44 percent margin in the next round.  To secure the remaining votes which once belonged to Ms. Le Pen, the elections will have to veer to the right, reflected in Sarkozy’s repeated appeals to anti-immigration and France’s historically Christian values.  However, if projections are true and Holland wins by a ten point margin, it would signal the first Socialist president for France since 1995.  Hollande’s victory has already increased uncertainty in markets as he pledged to boost government spending and cut French debt along with a 75 percent tax on the wealthy.  Additionally, while German Chancellor Angela Merkel and Sarkozy have recently introduced a treaty on budget austerity, Hollande would amend it to include economic growth on top of the cost-cutting.  Although Hollande claims that Germany is taking his advice and reducing its austerity, investors are still worried that a shift in power may cause a rift in the Eurozone. What is certain, however, is this projected victory displays that Sarkozy’s ideals will become a thing of the past as critics say that extreme right policies will sacrifice the European unity that World War II was fought to establish.  
-Jesse Chai

Bright Food's Acquisition Spree

A $1.94 billion deal has allowed China’s state-owned Bright Food to have majority stake over British cereal maker Weetabix Food. Bright Food will buy a 60 percent stake in Weetabix from the private equity firm Lion Capital LLP while Lion Capital and Weetabix management keep the remaining 40 percent. Bright Food has previously attempted to expand overseas, but has failed many bids for major corporations such as Yoplait, United Biscuits, CSR’s sugar division, and GNC. This venture is its largest overseas deal yet and its second overseas acquisition this year, after its 75% stake in Australian-focused Manassen Foods Australia purchased from Champ Private Equity in August. Bright Food had a focus on acquisitions even within China, and they plan to continue their growth through acquisitions abroad.

Bright Food is China’s leading food group, and is aiming to acquire sugar, wine, and dairy assets abroad. Its goal to become the major global foodmaker is supported by the Shanghai government, which encourages Bright Food's foreign acquisitions. Because Bright Food doesn’t currently make cereal, it aims to bring the Weetabix brand throughout China and overseas to make it the dominant brand in Asia. Bright Foods plans to increases foreign sales from 5% of revenue to 30% of its revenue in five years. If Bright Food is able to continue acquiring foreign companies and using its distribution network to introduce new goods throughout China and internationally, Bright Food will definitely benefit from these acquisitions. China’s booming middle class is spending more and more money on groceries, with over $970 billion spent on groceries in 2011, and many Chinese will definitely need a delicious breakfast!

-Evan Wang