July 2007


Bloomberg
Why Stock Buybacks Have Increased
According to J. Fred Weston, professor emeritus of finance at UCLA Anderson School of Management, stock buybacks that occur when companies change hands have increased by about 100 percent over the previous four years.  "The main reason for the astounding growth is to provide a defense against takeovers by private equity firms," says Prof. Weston.  This segment aired on July 31.

The Fresno Bee
Valley’s Sales Tax Revenue Declines
Triggered by the area's worsening housing market, sales-tax revenues are dropping in many central San Joaquin Valley communities and may mean cities will have to cut back on services.  According to Daniel J.B. Mitchell, professor, UCLA Anderson School of Management, inland counties hit by housing woes are "more likely to see a decline in retail sales" than coastal counties.  This article appeared on July 31.

The Press-Enterprise
Customers Flock to Moreno Valley SuperTarget
SuperTarget is the latest grocery retailer to come to the Moreno Valley, and even though Target Corp. got into the grocery game late, they've managed to avoid some of the public relations disasters that have followed Wal-Mart.  "When they (Wal-Mart) started selling groceries, they ran head-to-head against the United Food and Commercial Workers union," says Daniel J.B. Mitchell, professor, UCLA Anderson School of Management.  A UFCW representative says that Target is seen by unions as more worker friendly.  This article appeared on July 30.

NewstalkZB 89.4 (news radio) - New Zealand
Business Report
The UCLA Anderson School of Management Global Access Program (GAP), an international field study program for students in the Fully-Employed MBA (FEMBA) Program, was highlighted in this radio news program broadcasting from Auckland.  Ten of the 34 technology companies participating in the program this year are from New Zealand.  This segment aired on July 30.

The Washington Post
Market Maelstrom
The Dow's 300 point plunge this week left many investors wondering if the country's tightening credit market might cripple the stock market and the economy.  "The risk of recession has certainly gone up this week," says David Shulman, senior economist with the UCLA Anderson Forecast.  This articled appeared on July 29 and was reprinted on July 30 in the Fort Worth Star-Telegram, The Sydney Morning Herald and The Cincinnati Post.

National Public Radio (KCRW 89.9 - Los Angeles)
Which Way LA?
UCLA Anderson School of Management professor Daniel J.B. Mitchell discussed the recent contract settlement between LA grocers and grocery workers on Warren Olney's national radio show "Which Way LA?" This segment aired on July 26.

The Wall Street Journal
Superstar Curse Can Affect Award-Winning CEO’s, Too
Research conducted by Geoffrey Alan Tate, assistant professor of finance at UCLA Anderson School of Management and Ulrike Malmendier, assistant professor of economics at UC Berkeley, found that after top executives receive awards their companies tend to underperform.  The professors studied more than 250 CEO's who received awards from 10 different sources since 1975 and found that their companies' stock performance underperformed afterward.  This article appeared on July 25.

Los Angeles Business Journal
Clerical Workers Set Tone for Talks With Longshoremen
Setting the stage for the upcoming dockworkers union's talks, port clerical workers and shipping line representatives appear to favor reaching an agreement as opposed to a strike.  "You've ultimately got the same union and the same management and anything they do in one negotiation sets a climate for other negotiations," says Daniel J.B. Mitchell, professor, UCLA Anderson School of Management.  This article appeared on July 23.

Associated Press
SoCal Grocery Workers Win Concessions
Employees at three major Southern California supermarket chains overwhelmingly approved a new contract this weekend, and according to UCLA Anderson School of Management professor Daniel J.B. Mitchell, the deal is an improvement over the last contract.  "They made gains they didn’t have under their old contract."  This article appeared on July 23 and was reprinted in the North County Times and on Forbes.com.

KNX News Radio - Los Angeles
Business Hour
UCLA Anderson School of Management professor Daniel J.B. Mitchell discussed the new contract between LA grocers and grocery workers on this local business news program.  This segment aired on July 23.

Bakersfield Californian
Stunned By Defaults
Neighborhoods in the Inland Empire don't seem to be weathering the down-turn in the housing market well, with one development reporting more than a dozen defaults lining a pair of cul-de-sacs.  Ryan Ratcliff, an economist with the UCLA Anderson Forecast, says a group of defaulted bank-owned homes can turn a neighborhood into a "hard market."  Says Ratcliff, " ... it's bad news for local property values."  This article appeared on July 22.

The Sacramento Bee
Housing Clouds Economy
Does a recent unemployment report showing a slowdown in payroll growth mean California's weak housing sector is weighing down on the state's job market?  According to Ryan Ratcliff, an economist with the UCLA Anderson Forecast, even though some other segments of the economy are now being affected by housing, "there’s nothing catastrophic - nothing that screams 'recession' yet."  This article appeared on July 21.

Reuters
TV Show Tests If an MBA Can Show You the Money 
Branching out from its strict diet of financial news, CNBC will air the prime-time game show "Fast Money MBA Challenge" next month, hosted by one of the network's anchors, Dylan Ratigan of "Fast Money."  Students from UCLA Anderson will comprise one of the competing teams.  This article appeared on July 19 and was reprinted in the Hollywood Reporter and the Baltimore Sun

Associated Press
CNBC Trying Its First Game Show
In CNBC's first-ever game show, 32 business school students in teams from eight colleges will be pitted against each other, as they compete for $200,000 in prize money (to be used for college costs) on "Fast Money MBA Challenge."  Students from UCLA Anderson will be one of the participating teams.  This article appeared on July 19 and was reprinted in the Los Angeles Times on July 23.

Las Cruces Sun-News (New Mexico)
Head Start Parents to Receive Health Education
After conducting a nationwide survey in 2000, UCLA Anderson School of Management's Johnson & Johnson Health Care Institute discovered that parents lacked basic health-care knowledge regarding childhood illness.  Since 2002, the Institute has trained more than 10,000 families in 55 Head Start programs nationwide.  The Las Cruces Public Schools Head Start program is among 15 such programs in New Mexico currently selected to participate.  This article appeared on July 18.

The San Diego Union-Tribune
Housing Prices in County Hold Their Ground
Despite a drop in sales and growing foreclosures, San Diego County's home prices remain stable.  According to Edward Leamer, director of the UCLA Anderson Forecast, "the continuing news may be disturbing, but there’s not going to be a dramatic drop in the value of a home."  This article appeared on July 17.

AACSB International eNEWSLINE
The Millennials and Us
This generation of students, the millennials, "thinks big and expects to have an impact."  That is according to Judy Olian, dean of UCLA Anderson School of Management, who explores this concept in a piece she authored for the AACSB online news publication.  Dean Olian is the new chair of AACSB International.  This article appeared on July 17.

Los Angeles Times
No Magic Formula
In today's ever-changing real estate market, how does one establish the right selling price for a home?  According to Edward Leamer, director of the UCLA Anderson Forecast, "Ask most real estate agents what determines a home's value, and they will tell you three things - location, location, location."  This article appeared on July 15.

Antelope Valley Press
Construction Workers Puzzle Analysts
Recent employment data analyzed by UCLA Anderson Forecast economist Jerry Nickelsburg shows construction jobs in Los Angeles county holding steady, despite a downturn in home sales and building permits. "This strange employment data is worthy of more detailed investigation," says Nickelsburg.  "The undocumented (workers) appear nowhere in our data."  This article appeared on July 14.

KNX News Radio - Los Angeles
Business Hour
UCLA Anderson Forecast director Edward Leamer discussed the current state of the economy on this local business news program.  This segment aired on July 12.

The Baltimore Sun
More Problems at MuniMae
Executives at the Baltimore real estate and alternative-energy financier known as MuniMae struggle to get the numbers right, as an ongoing review of its accounting practices continues to uncover weaknesses in accounting procedures.  Eric Sussman, a lecturer at UCLA Anderson School of Management, says, " ... you've got companies that have significant shortcomings in accounting, and one has to ask, 'Are the inmates in charge of the asylum?'"  This article appeared on July 12.

National Public Radio (KCRW 89.9 - Los Angeles)
Business News
UCLA Anderson School of Management professor Daniel J.B. Mitchell discussed California's budget stalemate on this local NPR station's morning news program.  This segment aired on July 12.

Associated Press
Horton 3Q Sales Orders Plunge 40 Percent
The nation's homebuilders are being saddled with a glut of unsold homes, as the real estate market continues to deteriorate, and new home sales decline.  "Builders have made price concessions, but even at that they still haven't cleared out their inventories," says Edward Leamer, director of the UCLA Anderson Forecast.  This article appeared on July 10 and was reprinted across the country and in Canada in publications such as the Chicago Tribune, the Atlanta Journal, the Washington Examiner, the Sacramento Bee and the San Francisco Examiner.

The Salt Lake Tribune
Other States Watching Utah School District's Study of Possible Split
Will Utah's large school district be the first in the country to successfully split or will they follow other school districts and give more budgetary power to principals?  UCLA Anderson School of Management professor William Ouchi, who has studied the "principal empowerment" option says, "You leave it up to the principals, they all figure it out for themselves."  This article appeared on July 9.

Pacific Coast Business Times
UCSB Forecast Taken to Statewide Level
Having published the Santa Barbara County forecast for the last 27 years, the University of California, Santa Barbara is expanding their economic forecasting duties to include both a California and U.S. forecast.  "There are plenty of forecasting puzzles to solve, and we look forward to the contributions that will come from our neighbors to the north," says UCLA Anderson Forecast director, Edward Leamer.  This article appeared on July 9.

Los Angeles Business Journal
Luxury Condo Market May Be Hitting a Peak
Recent sales of Los Angeles high-end condo developments while still under construction may signal an end to the city's luxury condo construction market.   "Construction prices have risen and the margins for these deals have shrunk from when developers went into them," says Paul Habibi, a lecturer at UCLA Anderson School of Management.  This article appeared on July 9.  

Bloomberg.com
Housing Slump Builds Across Other Sectors
According to a study by the UCLA Anderson Forecast, a drop-off in U.S. home sales may hurt retail spending and auto sales.  "We suspect that the weakness in the housing market is finally spilling over into consumption spending," says David Shulman, senior economist with the Forecast.  This article appeared on July 8 and was reprinted in the Chicago Tribune.

The Columbus Dispatch
Huntington-Sky Merger
Huntington National Bank and Sky Financial Group are joining forces, causing critics to file a complaint with federal regulators that claims the consolidation of the two banks will hurt the communities they serve.  According to a study by Mark Garmaise, professor of finance at UCLA Anderson School of Management and Tobias Moskowitz, business professor at the University of Chicago, residents of neighborhoods with two banks that merge often pay higher interest rates on loans for several years after the merger.  This article appeared on July 3.

The Press-Enterprise
PR War at Groceries
The four-month labor dispute between California grocers and union workers hasn't made much of an impact on consumers, as both sides have been careful to avoid any public relations blunders.  "If you asked 10 people on the street, most of them would say the negotiations are not registering on their radar screens," says UCLA Anderson School of Management professor Daniel J.B. Mitchell.  "If it actually gets to the point when you have a strike going on ... then that would be something different."  This article appeared on July 3.

Los Angeles Business Journal
Sunset Gower Studios Sell for $200 Million
The recent purchase of Sunset Gower Studios by a real estate investment company may be a sign that the property is being considered for more than just a rent-generating production facility.  "With the returns they have to generate for investors, it can't just be a turn-key asset," says Eric Sussman, a lecturer at UCLA Anderson School of Management.  "There has to be a story they are pitching to their investors."  This article appeared on July 2.

Daily News
California Weathering Slowdown
In her opinion piece, Winnie Davis, the president of the Southland Regional Association of Realtors, details the findings of June's UCLA Anderson Forecast, stating that UCLA Anderson economists remain steadfast in their belief that the national economy does not face a recession and that California continues to weather the real estate slowdown.  This opinion piece appeared on July 1.

National Real Estate Investor
Goldilocks Economy for Real Estate Gives Way to More Volatile Climate
Any hopes for a quick rebound to the housing slump have been recently dashed by the soaring number of defaults, nervous residential lenders, and the bankruptcy filing by subprime lender New Century Financial Corp.  "The reality is that the housing correction that is occurring now has always led to a recession," says Edward Leamer, director of the UCLA Anderson Forecast.  This article appeared on July 1.

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