Prosper has made much about the recent addition of Mr. Nigel Morris to its board - and the $1 million he brought along to the party.

As has already been noted by observers with deeper insight into the mechanics of all things Prosper, this cash infusion is little more than a minor bridge-loan, priced at a relatively steep 15% interest.  It is rather unclear how this fairly insignificant loan will impact Prosper’s future or delay what appears to be the inevitable demise of the company, as it continues on track to run out of operating funds in the near term.

On November 16, 2009, Prosper filed a 10-Q document with the Securities and Exchange Commission, which provides interesting insight into Prosper’s financial health.  Based on what is known about Prosper cash burn, the recent cash-infusion only buys Prosper an additional couple of months, with Prosper now expected to go broke in February 2010.

Despite the lackluster pace of new loan originations, there is some sense that there is still some potential value yet to be unlocked in this company.  What also remains unclear, however, is the extent to which Prosper is in a position to attract additional investments on favorable terms to operate beyond February 2010, considering the general current economic climate, the uncertainty regarding the viability of Prosper as a going concern, the current regulatory framework and Prosper’s situation with unresolved litigation.

Everyone knows that SEC football is unparalleled as the best conference around. With all the tradition, history and rivalry, nothing makes better for a fall Saturday than being outside the stadium at 6 a.m., roasting a pig, throwing back whiskey and cokes, having dates in sundresses and shotgunning beers. That said, the Wall Street Journal had it right when they published this article last week.

If you love everything that’s American, I promise you will enjoy it. You’re welcome.

Alabama once again demonstrated their dominance yesterday during the Iron Bowl, beating The Agricultural & Mechanical College of Alabama (aka Auburn) in a 26-21 victory.  This brings to a close the Tide’s second straight undefeated regular season, with a stunning 12-0 record this year.  Bear would be proud boys…Read more here.

Now, off to fire up the pit BBQ in preparation for some roast Gators…

When they hired him, I had my suspicions.

Sure, Ron Zook hadn’t been Steve Spurrier. But the hiring of Urban Meyer to replace Zook by the University of Florida in 2005 struck me as another episode of college football’s version of “Catch a Rising Star.”

Now, as an alumnus, I’m hearing (and seeing) some disturbing sounds (and sights) that might put me in line for a reprisal of the Yoda role.

To wit:

http://www.cbssports.com/columns/story/12585042/meyer-going-to-nfl-believe-it-numbskulls

It’s Thanksgiving week, which is also Rivalry Week. We’ll be light on commentary this week, because most of these games speak for themselves. Many of these rivalries are sullied this year with dominant teams facing off against their historic opponents in rebuilding years. However, for those teams with nothing else to play for, these match-ups will be their “championship” because it would bring a team – like Auburn or Texas A&M – no greater pleasure than to spoil the BCS title hopes of their nemeses. So, don’t be surprised to emotional play lead to some surprising upsets this weekend.

Remember to check the TV coverage maps, and note that all rankings are the current BCS standings. Enjoy your leftovers and save room to indulge in your week 13 viewing guide.

Thursday
8:00 PM ET
#3 Texas 49 v. Texas A&M 39
This was…unusually close. Despite the loss, the Aggies might have played their best game of the year – at least offensively. QB Jerrod Johnson looked fantastic, and will continue to be a threat to Texas in the next couple of years. Texas defensive coordinator Will Muschamp will be irate after the way the defense played Thursday night, but my guess is that emotion and momentum kept the Aggies in the game much longer than expected because the ‘Horns offense clicked most of the game. If you’re running behind on Eyes Of TX content, the in-depth game preview can be found here. There is no asterisk as division champs this year, as Texas has plowed their way to the Big 12 Championship game against Nebraska on December 5th.

Friday
11:00 AM ET
Rutgers at Louisville, ESPN2
Exciting! Not. But, football season’s almost over….let’s feast while we still can.

12:00 PM ET
Illinois at #5 Cincinnati, ABC
One final test for the Bearcats. Rumor has it former starting QB Pike will make the start this week. Eyes Of TX says, “why mess with a good thing?” Hope that doesn’t backfire for Cincinnati, but an upset sure would make the BCS happy.

2:30 PM ET
#2 Alabama at Auburn, CBS
Can ‘Bama overcome their biggest rival to give themselves a shot at #1 Florida, the SEC championship and the national championship? We’ll see how Auburn gets up for this game after a killer start, but a late season let-down. If head coach Gene Chizik pulls off the upset, sadly, he will be enshrined as the best coach ever at Auburn.

3:30 PM ET
Nebraska at Colorado, ABC
Nebraska has clinched the Big 12’s North division and will face #3 Texas on December 5th for the Big 12 conference title. This will be the last opportunity to see what Bo Pelini’s squad has to offer, in particular his offense, and while most thought it will be Colorado’s last chance to help head coach Dan Hawkins keep is job, the university confirmed that he would be coaching in Boulder again next season. The NCAA might as well give CU the “death penalty” because they’ve definitely rolled over this year.

7:00 PM ET
#9 Pittsburgh at West Virginia, ESPN2
Does anyone else think Pittsburgh head coach Dave Wannstedt has a funny mustache?

10:00 PM ET
Nevada at #6 Boise State, ESPN2
Close out the night with this late game. Boise State could be shut out of the BCS this year despite being #6 and undefeated. It’s too bad their weak schedule didn’t allow us to see just how good they can be, and perhaps Oregon helped them look better than they actually are… With #5 Cincinnati and #4 TCU as mid-major schools ahead of them in the BCS, it will be a disappointment for the home of the blue turf.

Saturday
12:00 PM ET
Both of these games are intriguing for the in-state bragging rights implications. Neither matchup is particularly compelling but in the context of Rivalry Week, they’re definitely worth watching.

#18 Clemson at South Carolina, ESPN
The ‘ol Ball Coach tries to make a stand in Columbia against a ranked opponent. Win or lose, they could keep Clemson RB C.J. Spiller from winning some post-season awards if they can hold him to a sub-par performance.

North Carolina at North Carolina State, ESPN2
If a tree falls in the forest, and no one is around, does it make a sound? In the shadows of the Appalachian mountains, its basketball season folks.

12:21 PM ET
#25 Mississippi at Mississippi State, check local listings
If you can find this, see the same reasons as above. If anything, Texas fans can relish in the fact that when the pressure was on to deliver a big year for Ole Miss, former Longhorn back-up quarterback Jevan Snead fell flat in 2009.

12:30 PM ET
#12 Oklahoma State at oklahoma, Comcast Sports Net
Another one that will be hard to find, unfortunately, because it’s always nice to watch ou struggle. With this year’s ‘Pokes team rolling to a potential BCS at-large bid, it’s hard to imagine them dropping this one, even though they’re away from home.

3:30 PM ET
Florida State at #1 Florida, CBS
Florida’s won the last 21 games of this series, if memory serves. For Seminoles head coach Bobby Bowden, the good thing is he’s old enough to forget each game. Florida wins big, and sets up the ultimate SEC Championship match-up of #1 v. #2 Alabama for the right to play in the national championship.

#14 Virginia Tech at Virginia, ESPN
Virginia is an absolute debacle this year. Expect the Hokies to roll the ‘Roos at home.

#17 Miami at South Florida, ABC
This might actually be interesting, as South Florida started out the year strong, as did Miami. We’ll see what the ACC has to offer up the bowl committees besides a surprising Georgia Tech. Can Miami step up?

(Also in this slot on ABC is Arizona at Arizona State, and Missouri at Kansas.)

5:00 PM ET
#21 Utah at #19 BYU, CBS College Sports
A great in-state matchup between two of the best non-BCS conference teams.

7:00 PM ET
Arkansas at #15 LSU, ESPN
LSU has found out they weren’t quite as good as they thought, in part due to horrible coaching by Les Miles last week. Arkansas has been inconsistent, but could pull off the upset. Unfortunately, Death Valley isn’t an easy place to play, especially the week after an LSU loss.

8:00 PM ET
Georgia at #7 Georgia Tech, ABC
Who would have thought the best team in Georgia would be out of Atlanta? Georgia Tech’s triple-option has proven surprisingly successful this year. Go Yellowjackets!

Notre Dame at Stanford, ABC
What could be head coach Charlie Weis’ last game at Notre Dame will be shown in most of the country. Meanwhile, Stanford will try to stamp their ticket with another win against a big-time program.

Thanks again to LilPete for his 2009 season viewing guides.

✩

Every Heisman contender has a Heisman moment – that game where, when it’s over, you say to yourself “wow, he really deserves the Heisman trophy.” After watching Colt McCoy rip Texas A&M to shreds tonight, I sort of had that feeling. Sort of.

After all, it’s easy to make a case for McCoy. He is 12-0, and likely headed for the national championship. He now has 27 touchdown passes and nine interceptions to go along with nearly 3,500 yards. However, the nine interceptions is more than he had in 13 games last season. And in order to match his touchdown and yardage total from a year ago, he needs seven TD passes and about 400 yards in the next two games. Even if he does that, he will have needed 14 games to do what he did in 13 in 2008. To go along with those monster 2008 numbers, he had 591 rushing yards. This year he has just 368, and only because he rushed for 175 tonight. He also has nine fewer rushing touchdowns.

Here’s the question: should we compare a Heisman candidate’s numbers to those of a season ago? My answer is no. But the voters will. And McCoy’s superior 2008 season wasn’t good enough to win the Heisman. Why should this year be different?

So what about Mark Ingram? The Alabama sophomore is 11-0, likely 12-0 after the Iron Bowl, and is averaging 6.8 yards per carry and 127 yards per game. He seems to be getting most of the talk right now, but why? Is it because the Tide are #2 in the nation? Because he plays for a school with a rich tradition? Because he was on the cover of Sports Illustrated?  He only has 12 touchdowns.  We might as well throw UTEP’s Donald Buckrem in the mix as well.  He has more yards, yards per game and touchdowns than Ingram.  And he certainly doesn’t have the offensive line Ingram has.

So do you give it to Ingram, with worse numbers than a handful of running backs from non-BCS schools, because those running backs don’t have to run against SEC opponents?

Here’s another running back you may not know about – Toby Gerhart.  He plays for Stanford.  Stanford is in the Pac 10, and believe it or not, it’s the best conference in the country.  Don’t believe me?  Read this.

Gerhart plays for a school who’s playing nine teams from the best conference in football, plus bowl eligible Notre Dame.  All in all, Stanford has a schedule ranking (13)  that’s 28 places higher than Alabama (41) and 43 places higher than Texas (56).  Gerhart has rushed for 1,531 yards, second only to Buckrem, and has 23 rushing touchdowns, second to no one.  But his team is 7-4.  So I ask, should we give the Heisman to a guy with better numbers but a worse record?  Tim Tebow won the award the year he went 9-4, but finished third the year he won a national championship at 13-1.

It’s taken me a while to get to this option, but I now present you with the only one that makes sense: Case Keenum.  Say what you want about his strength of schedule or the Houston play calling.  I’m about to shut you up.

Keenum is 9-2, and almost surely to be 11-2 following a Conference USA championship in a few weeks.  He is more than 1,000 yards ahead of the next highest passer in the country.  That’s unreal.  Forget the schedule.  He’s a machine.  1,000 yards?  Are you kidding?  He doesn’t have a Jordan Shipley on his team.  There’s no Mark Ingram or Toby Gerhart to balance the offense.  This is a one man show.  Defenses know exactly what’s coming and still can’t stop it.  That’s impressive.  His 36 touchdowns leads the nation going away.  He’s the only player in the country throwing for more than 400 yards per game.  And for those of you saying that his pass attempts are inflated, try wrapping this number around your head: six interceptions.  Six.  in 553 pass attempts.  McCoy has three more in 161 fewer attempts.  And McCoy has a line that doesn’t let anyone touch him.

Keenum, unlike McCoy, will best his 2008 numbers, blow away all 2009 QBs in every statistical category, and, sadly, probably won’t even be invited to New York.  But he should be.  And he should win it.  This is a very interesting race, and the other contenders have too many question marks surrounding their legitimacy.  For once, give it to the little guy, on the little team.

My Heisman ballot:

1)  Case Keenum
2)  Colt McCoy
3)  Toby Gerhart

20 years after the move, Pat Dye and Ray Perkins still don’t see eye-to-eye | Scarblog – al.com.

An interesting article that I gleaned from the Al.com website.

The Iron Bowl stirs a myriad of emotions, almost all of them strong ones.

I didn’t grow up in Alabama and did not attend school at either institution.  I do have a so at Auburn, so I do have a preference.

It is quite ironic that I once owned an Alabama Football jersey.  Thank you Lord for saving me!

War Eagle!

Everybody loves this game and anybody who says different is lying.

My longtime boyfriend, who will be happy to see I’m going to call him Big Cocky, has been harassing me all week with nightmare scenarios about this game. Clemson’s looking ahead to the ACC Championship, he predicted. Their minds are on Tampa, not Columbia. They’re thinking about a rematch with Georgia Tech. And the most chilling statement of all: a mediocre SEC team, which he readily admits his Gamecocks are, can beat a top-shelf ACC team.

I have to admit I’ve lost a little sleep over that last one.

OK, I’m looking forward to Tampa, mostly because I want to go but I’m so broke right now I couldn’t buy a bag of peanuts and a souvenir Coke at a football game, let alone a championship ticket. But there’s a level of fun to rivalry week that doesn’t accompany any other game. The championship game isn’t going to be about fun so much as it’s going to be about respect. But rivalry week – well, that’s like Halloween for football fans. You get to let your inner smartass come out to trash-talk the opposition.

Is it like this at other schools? I wonder – do Auburn and Alabama fans have this sort of good-natured-among-friends-but-potentially-bloody-among-strangers relationship? I feel fairly certain Georgia and Georgia Tech have a higher level of animosity than Clemson and Carolina do, mostly because the Dawgs are such frickin’ swaggering loudmouthed bullies. Who are going to get their clocks cleaned this year, by the way, and whatever I may think of Tech and the upcoming championship game, I will smile every time they stuff the ball back down Georgia’s throat. The only way I could hate Georgia more is if we played them every year.

But I digress.

I have a history with this game, because every Clemson or Carolina fan does. I was in the stands in 2000, freezing my ass off as the sun went down, to see Rod Gardner make The Second Catch and position us to win the game; I was there four years later for The Brawl, when my best friend and I stood nervously in the stands while the fight spanned the visitors’ sidelines, half expecting the ugliness to migrate up from the field.

I was there in 1984 for the Black Magic season, our first defeat in the famous Orange Pants. I was a kid, thoroughly dismayed, and as my dad and I left Death Valley, some blowhard in his 40s, who I bet I could pick out of a lineup even 25 years later, came running through the crowd, going up to every other Clemson fan like a sugar-addled kid and crowing, “We beat ‘em in the Orange! We beat ‘em in the Orange!” My dad, normally mild-mannered, clearly didn’t think much of this but refused to take the bait. He patted me on the shoulder, leaned down, and said, “You know what? Someone’s going to kick his ass.” Not ten steps later, we heard the ass-kicking begin, although Dad refused to let me stay and watch.

I think it’s mellowed a bit since then, although I’m probably biased, coming from a mixed relationship. I know a Carolina fan who cringes whenever the 63-17 game is mentioned, and after the 2006 “wide left” game (not to mention the Florida State game earlier this year), I sometimes cover my eyes when a field goal is kicked.

I want C.J. Spiller to have a great game that helps him toward the Heisman.

I want Jacoby Ford to have a great game that gets him picked in the first round of the draft.

I want Deandre McDaniel to have four interceptions, and I have faith that Stephen Garcia will help him do it.

And I want every damn Clemson fan in the stands to close out the game yelling “ACC! ACC! ACC!”

Is that so much to ask?

(On a more serious note: R.I.P., UGA VII. I may hate the team but I never hate a mascot. I bet you were a good dog.)

YouTube – Auburn Football – Runningback U: On Fire.

A little preview for Bama fans about what to expect tomorrow.

The view that the Bama defense will remember from the Iron Bowl 2009 will be the rear of McCalebb and Tate.

The team with the most rushing yardage has won the last 12 games.  Auburn will outrush Alabama on Friday….

War Eagle!  Beat Bama!

Reuters – U.S. regulators are increasingly looking beyond stocks in their insider trading investigations to examine derivatives and credit default swaps, a top Securities and Exchange Commission official said.

The expansion comes as the SEC, state and federal criminal authorities pursue the biggest insider trading case involving hedge funds — a case that has already ensnared the billionaire founder of Galleon Group, traders, lawyers and other Wall Street personnel.

“Insider trading can take place in several different venues,” Scott Friestad, SEC associate director of enforcement, said in an interview. “In many of these investigations, we are looking at trading across markets whether it involves options, the underlying common stock, or nontraditional securities like credit default swaps.”

Friestad had no comment on Galleon and its founder Raj Rajaratnam, both targets of an SEC civil lawsuit.

The government remains under heavy political and investor pressure to more aggressively bring perpetrators of financial fraud and illegal profits to justice.

Earlier in November, the Obama administration set up a task force that includes the SEC, the Treasury Department and the Justice Department to thwart financial fraud after a rise in mortgage scams and Wall Street trading scandals.

The SEC, headed by chairman Mary Schapiro, faces its own pressure to be more vigilant, after ignoring tips that could have led it to stop Bernard Madoff’s $65 billion fraud sooner.

HARDER TO DETECT

In April, the SEC said it had about 150 active hedge fund investigations and more than 50 probes involving credit default swaps, collateralized debt obligations, and other derivatives.

“Individuals with material nonpublic information have the potential to profit through nontraditional means,” Friestad said. “In some cases, people believe that they can avoid detection by trading where they think investigators aren’t looking.”

In May, the SEC brought its first case involving credit default swaps, which insure corporate debt against default. It charged a former hedge fund manager and a Deutsche Bank AG (DBKGn.DE) bond salesman with trading swaps of Dutch media conglomerate VNU NV.

Yet unlike stocks, options and bonds that trade on exchanges, credit default swaps and most derivatives trade over the counter, making it harder for regulators to rout out wrongdoing.

“It is much more difficult for the SEC to detect insider trading using derivatives because there is no central market and hence no ability to conduct real-time surveillance,” said Mark Schonfeld, a former director of the SEC’s New York office.

“Insider trading in equities and options is almost always detected by market surveillance,” said Schonfeld, who now co-chairs the securities enforcement group at law firm Gibson Dunn & Crutcher LLP.

Bills pending in Congress would impose new rules designed to shed light on the $450 trillion over-the-counter private swaps market, including requiring derivatives dealers to report trades and forcing more derivatives onto exchanges.

Even if new rules are imposed, some parts of the market will remain opaque.

The challenge of detecting insider trading in some markets was highlighted at the height of the financial crisis in September 2008.

When the SEC was trying to figure out whether investors were manipulating the stock of financial institutions, it ordered two dozen hedge funds, broker-dealers and investors to hand over information about their trading and credit default swap positions in several companies.

SEC Nails MN-Based Currency Trading Fraud

Courtesy of Joshua M Brown, The Reformed Broker

The SEC nailed a Minnesota-based currency fraud today, a bust that I believe will be the opening salvo in a much bigger battle to protect Americans from this burgeoning area of fraud.

SEC Obtains Asset Freeze in Minnesota-Based Foreign Currency Trading Scheme

FOR IMMEDIATE RELEASE
2009-253

Washington, D.C., Nov. 24, 2009 — The Securities and Exchange Commission has obtained an emergency court order freezing the assets of a self-proclaimed Minneapolis-based money manager, a nationally syndicated radio personality and four companies they controlled in a foreign currency trading scheme that raised at least $190 million from more than 1,000 investors.

The SEC alleges that Trevor G. Cook and Patrick J. “Pat” Kiley sold unregistered investments through shell companies by misrepresenting that they would deposit each investor’s funds into a separate account in the investor’s name to trade in foreign currencies and generate annual returns of 10 percent to 12 percent. They also misrepresented that their foreign currency trading program involved little or no risk and that investors’ principal would be safe and could be withdrawn at any time. Kiley pitched the investments on his financially themed “Follow the Money” show that he hosted on radio stations nationwide.

As I mentioned in my piece “3 Potential Bubbles for Retail Investors“, currency and forex trading has historically been only lightly regulated in terms of sales practices.  As a result, many fraudsters from other industries have jumped on the bandwagon. 

There is a ton of leverage employed in even the most common strategies and with daily headlines trumpeting the weak dollar, individuals are being led like sheep to the slaughter into this arena.

I applaud the SEC for shutting down this ponzi scheme and I hope everyone reads the full press release before sending money to someone who represents currency speculation as “riskless”.

Source:

SEC Obtains Asset Freeze Against MN Currency Scheme (SEC.Gov)

Read Also:

3 Potential Bubbles for Retail Investors (TRB)

Hard to believe that we are down to the final week of play in the SEC, America’s premiere College Football Conference again this year.

I had another very good week and this will be the next to last post of this nature.  I’ll shift to basketball in late December to prepare for the upcoming SEC conference season.

I am soooo looking forward to the Florida-Alabama game on December 5.  It is too bad that Bama will have their first loss prior to that date!

Note:  If you have not seen “The Blind Side” I highly encourage you to take the time and go see it.  Take some Kleenex along also-it is that kind of movie that makes you feel good as well as think.

Week 1:  9-3

Week 2:  4-2

Week 3:  7-2

Week 4:  7-1

Week 5:  6-1

Week 6:  4-3

Week 7:  4-2

Week 8:  4-2

Week 9:  5-2  (Gena’s picks)

Week 10:  8-0

Week 11:  3-4

Week 12:  5-1

Total:  66-23  (79.8% accuracy-maybe I have found a new living!)

by J. Robert Brown, for The Race to the Bottom, November 25, 2009.

One of the other buried provisions in the Financial Stability Act is a requirement that the SEC adjust the definition of accredited investor for inflation.  Specifically, Section 412 provides that the annual income and total net worth numbers contained in Rule 501 of Regulation D (17 CFR 230.501) must be increased  by “price inflation” since those numbers were created.  Moreover, the provision requires adjustments at least every five years.

The change is long overdue.  The accredited investor definition was first adopted in 1982 when the Commission adopted Regulation D.  See Securities Act Release No. 6389 (March 8, 1982).  The $200,000 annual income and $1 million in assets existed in the original rule.  Had they been adjusted for inflation, the amounts would have increased significantly.  As a prior SEC release noted:

• Our Office of Economic Analysis estimates that the financial thresholds used in Rule 501(a), adjusted for inflation as of July 1, 2006, would be as follows: . . . the $ 1 million individual net worth test would have increased to approximately $ 1.9 million; and the $ 200,000 individual income test and $ 300,000 joint income test would have increased to approximately $ 388,000 and $ 582,000, respectively…(continue reading)

The Maroon Nation wants to hear from YOU. Use the comments section to post your stories, your memories.

Maybe this can jog your memory!

The SEC nailed a Minnesota-based currency fraud today, a bust that I believe will be the opening salvo in a much bigger battle to protect Americans from this burgeoning area of fraud.

SEC Obtains Asset Freeze in Minnesota-Based Foreign Currency Trading Scheme

FOR IMMEDIATE RELEASE
2009-253

Washington, D.C., Nov. 24, 2009 — The Securities and Exchange Commission has obtained an emergency court order freezing the assets of a self-proclaimed Minneapolis-based money manager, a nationally syndicated radio personality and four companies they controlled in a foreign currency trading scheme that raised at least $190 million from more than 1,000 investors.

The SEC alleges that Trevor G. Cook and Patrick J. “Pat” Kiley sold unregistered investments through shell companies by misrepresenting that they would deposit each investor’s funds into a separate account in the investor’s name to trade in foreign currencies and generate annual returns of 10 percent to 12 percent. They also misrepresented that their foreign currency trading program involved little or no risk and that investors’ principal would be safe and could be withdrawn at any time. Kiley pitched the investments on his financially themed “Follow the Money” show that he hosted on radio stations nationwide.

As I mentioned in my piece “3 Potential Bubbles for Retail Investors“, currency and forex trading has historically been only lightly regulated in terms of sales practices.  As a result, many fraudsters from other industries have jumped on the bandwagon. 

There is a ton of leverage employed in even the most common strategies and with daily headlines trumpeting the weak dollar, individuals are being led like sheep to the slaughter into this arena.

I applaud the SEC for shutting down this ponzi scheme and I hope everyone reads the full press release before sending money to someone who represents currency speculation as “riskless”.

Source:

SEC Obtains Asset Freeze Against MN Currency Scheme (SEC.Gov)

Read Also:

3 Potential Bubbles for Retail Investors (TRB)

It’s not uncommon to find businesses all over this country talking about the impact the current economic environment is having on their operations.

Just yesterday, I was speaking with my good friend, John Fodera. John is a partner in Eisner, LLP’s audit and risk management services group. He spends his days discovering how to reduce risk and streamline operations, while making sure that his clients remain compliant with regulations a diverse as labor law to SEC requirements. Not surprisingly, he hears about the impact of the recession all of the time.

As our discussion progressed, it became apparent that John brings some fresh thinking to these conversations. One of the thoughts that we shared is that cutting staff is not always the best way to deal with a slowdown in business.

John explained that the “knee-jerk” reaction is always to reduce costs and sometimes this is truly appropriate. But, like any other challenge, there are always opportunities.

When companies are concerned about business, they are more apt to rethink the way that they approach the marketplace. Leadership will also find that staff will be more open to trying new approaches. This is typical when the risk of remaining with the status quo exceeds the risk of trying new things.

Reaching out to existing customers and discovering and sometimes re-discovering what is valued in one’s offerings – and what isn’t – can change what is being sold and how it is being presented to other potential clients.

When something is not valued, often, the cost associated with adding and delivering that capability can be stripped out. Suddenly, the product may actually be more valuable because a level of complexity is removed and the cost associated with developing, selling, delivering it and training others has been reduced. Out of such discussions, many competitive advantages and opportunities are born.

And in an age where technology is changing as rapidly as it is, an economic downturn can provide the impetus to create new ways to produce meaningful value.

As John would probably tell you, the real risk is when you are not rethinking your business.  But don’t take his word for it.

Just ask the people running the newspaper industry and the postal service.

Rivalry Week

Throw The Stats Out The Window

This is the college football week where more money is lost by those who don’t know what they are doing and more money is made by those who do know.  Certain rivalry games are just that—real rivalries.  Others are nothing but an annual beating on a little sister.

There is another bigger factor to this week’s games.  It’s the bowl factor.  Several teams are still looking for one final win to become bowl eligible.  A 5-6 team hosting an 8-3 team must be looked at quite differently than a 2-9 team hosting a 4-7 team.  The desire to get to 6-6 far outweighs the desire to avoid a 10-loss season.

Let’s look at the bowl eligible teams by conference as well as the teams needing to win this week to gain bowl eligibility.

Clemson and Georgia Tech have already clinched their divisions and will meet for the ACC Championship.  Tech edges the Tigers in Atlanta in September, but Clemson gave the game away.

Duke needs to beat Wake Forest this week to earn their first bowl in 15 years.  David Cutcliffe is one of the most underrated coaches in the country, and he should receive some national recognition in the Coach of the Year balloting.

The ACC has nine automatic bowl bids, and only seven bowl eligible teams as of now.  The GMAC Bowl will need to find an at-large team to fill the vacant position, and if Duke loses this week, the Eagle Bank Bowl will look to the MAC to fill that vacant slot.

Regardless of what happens in the Backyard Brawl in Morgantown this weekend, the winner of next week’s Cincinnati-Pittsburgh game will be Big East Champions and automatic BCS Bowl representative.  Cincinnati could still conceivably earn an at-large BCS Bowl bid at 11-1, but that chance is slimmer than slim.

Connecticut can gain bowl eligibility with a win at home against Syracuse this weekend, and they would get another chance next week against South Florida if they faltered against the Orangemen.  If the Huskies get that win, then the Big East will have six bowl eligible teams for six guaranteed spots.  Notre Dame could still possibly steal the Sun Bowl/Gator Bowl spot that goes to a Big East team if the Irish beat Stanford, but it would be a disgrace for them to steal a post at 7-5.  We believe Stanford will take care of business and keep Notre Dame out of the bowl picture altogether this year.

The Big 10 season is basically over.  Illinois has a couple of non-conference games remaining, and the only important factor in that is they play Cincinnati this weekend.  Wisconsin goes to Hawaii in two weeks, and the Outback Bowl bid could be riding on them winning the game.

It is almost a foregone conclusion that a second Big 10 team, either Iowa or Penn State, will receive an at-large BCS Bowl bid.  So, there will be seven teams available for eight bowls.  The Pizza Bowl (formerly Motor City Bowl) will have to look elsewhere and may be forced to invite two MAC teams.

Nebraska and Texas will face off in the Big 12 Championship Game, and the Cornhuskers may have a shot at pulling off a huge upset.  We give the ‘Huskers about a 15% chance of frustrating the Longhorn offense and win ugly.  If so, then another team from the Lone Star State will benefit.

After beginning the season at 5-0, Kansas finds itself in a must-win situation against Missouri at Arrowhead Stadium in Kansas City.  They must earn The Brass Drum to earn a bowl bid.

The most important game though will be the Oklahoma and Oklahoma State game in Norman.  If the Cowboys beat the Sooners, they will more than likely earn an at-large BCS Bowl Bid at the expense of Boise State.  The Sooners must win to guarantee themselves a winning season.  The PiRate Ratings have had a devil of a time with OU this year.  Even at 6-5, their power rating keeps them in the top 10.  It’s hit or miss with them, as they showed how strong they are when they took Texas to the final gun.

If Kansas wins over Missouri, there will be 10 bowl eligible teams for eight guaranteed bowl spots (nine if Oklahoma State beats Oklahoma).  Look for Iowa State to be the odd team out of the mix.

Welcome to the conference where everything changes weekly.  With SMU losing to Marshall, the door opened once again for Houston to ascend to the CUSA Championship Game.  A win over Rice is all that’s needed, but all of a sudden the Owls have found their way.  It could be an interesting game—at least for a half.

The East Division championship will be decided this weekend when Southern Miss visits East Carolina.

UAB can gain bowl eligibility with a win over  Central Florida, but it may be a moot point.  There are only five guaranteed bowl spots with a sixth if Army fails to earn the Eagle Bank Bowl bid.  Six CUSA teams are already bowl eligible, and the Blazers cannot compete with Marshall or SMU in fanbase.

All three independents are still in the bowl mix, but as of now, only Navy is guaranteed a spot.  Notre Dame must beat Stanford to get to 7-5 and earn priority over every other possible at-large team.  At 6-6, they more than likely will find themselves out of the picture as there will be enough seven-win teams to fill the at-large spots.

Army must beat Navy to earn the Eagle Bank Bowl bid.  Navy has won seven in a row in this series, so it should be one of the best in this series in many years.

Central Michigan has already clinched the West Division, and the Chippewas will play the winner of this week’s Ohio U-Temple game in the MAC Championship Game. 

Two teams will be playing for that important seventh win this week.  Bowling Green hosts Toledo, and Kent State hosts Buffalo.

The MAC gets three guaranteed bowl bids and will get a fourth if Duke fails to beat Wake Forest and earn an Eagle Bank Bowl bid.   That’s where the Bowling Green and Kent State games come into play.  Both could earn bowl bids with wins, and one could even play in the Pizza Bowl against another MAC team.

TCU will manhandle New Mexico this week and then hope that either Texas A&M or Nebraska can upset Texas, Florida State can upset Florida, or Auburn can upset Alabama.  The Horned Frogs need two of the big three teams ahead of them to lose.  The loser of the SEC Championship Game means that either Texas must lose this week or next or the winner of the SEC Championship Game must lose this week.  If one of these events happen, then TCU will be playing for the national championship in January.  It’s hard to believe that this program was once as weak as Syracuse, Vanderbilt, and Washington State are today.

The one team still trying to gain bowl eligibility is Wyoming.  The Cowboys must beat Colorado State in Ft. Collins this week, and these two teams truly put the “war” in “Border War.”  It’s not a given that Wyoming can top the 3-8 Rams.

For the first time ever, the winner of the “Civil War” game between Oregon and Oregon State will earn the Rose Bowl bid.  The Ducks and Beavers are one of the best rivalry games in college football, and I’d love to have a 50-yard line seat next week in Eugene.

The Pac-10 receives six automatic bowl bids, but there are seven bowl eligible teams.  It looks like UCLA will miss out this year unless they can upset USC.  Arizona must beat either Arizona State or USC to get to seven wins.  If both the Bruins and Wildcats win seven games, then expect to see the Pac-10 receiving an extra bid to a western bowl.

This is a monster conference!  With Alabama and Florida headed to Atlanta to play what will be the “Game Of The Decade” (assuming both win this week), it is a given that the loser will still play in a BCS Bowl.  It isn’t completely out of the realm that if the SEC Championship game goes to overtime or is decided in regulation by a point, and if Texas loses to either Texas A&M or Nebraska, that Alabama and Florida could meet in a rematch for all the marbles.

With 10 bowl eligible teams, the SEC will place all 10 in bowls.  There will be a lot of last minute shuffling because there isn’t much difference between team number three and team number 10.

This league is almost assured of earning a second bowl bid this year.  Troy will play in the New Orleans Bowl, but Middle Tennessee will get an at-large bid somewhere.  Both Louisiana-Lafayette and Louisiana-Monroe can get to seven wins, but it will take big upsets for both to do so.  ULL plays Troy, while ULM plays MTSU.

Here’s where things should get interesting.  Boise State is a win over Nevada away from being 12-0 and the proverbial odd team out.  If Oklahoma State beats Oklahoma, the Cowboys will steal the last BCS Bowl bid at the Broncos’ expense.  Then, watch for the United States Government to put their messy fingers into the college football pigpen. 

Before we get into this mess, Boise State has to beat Nevada.  The Wolf Pack is not a pushover, and it could easily take 50 or more points to win this game.

Of course, if the Sooners win over OSU, then it looks favorable for BSU getting into the field.  Then, they would be competing against a one or two-loss Big East team and maybe a two-loss Georgia Tech team.

If Boise State moves up, then the WAC is safe with four bowls for four bowl eligible teams.

Hawaii could still sneak into the mix, but they would have to beat Navy and Wisconsin.  We don’t see that happening.

Bowl Speculations

by Margaret E. Tahyar, for The Harvard Law School Forum at Harvard Law School, November 24, 2009.

Margaret Tahyar is a partner in the Financial Institutions Group at Davis Polk & Wardwell LLP. This post is based on a Davis Polk & Wardwell LLP client memorandum by Ning Chiu, Francis S. Currie, William M. Kelly, and Barbara Nims. Davis Polk & Wardwell LLP have also prepared a summary of the draft Restoring American Financial Stability Act, which is available here.

The project of federalizing major elements of our corporate governance and executive compensation processes continues apace. The 1,136-page Restoring American Financial Stability Act of 2009, introduced last week by Senate Banking Committee Chairman Christopher Dodd, has principally attracted attention for its proposed radical overhaul of the regulation of financial institutions. But the Dodd bill also contains corporate governance and executive compensation provisions that would be applicable to all US public companies. The governance elements function as a somewhat more modest Version 2.0 of the universal governance mandates that had earlier been proposed in Senator Charles Schumer’s Shareholder Bill of Rights. The compensation elements are to a great extent lifted from legislation already passed by the House of Representatives this summer under the Corporate and Financial Institution Compensation Fairness Act of 2009…(continue reading)

by Beth Young, for The Harvard Law School Forum at Harvard Law School, November 24, 2009.

Beth Young is a lecturer at Harvard Law School and a senior research fellow at The Corporate Library. This post is based on a paper prepared for the Council of Institutional Investors and the Shareowner Education Network; the paper is available here. The views and opinions expressed in the paper are those of Ms. Young and do not necessarily represent views or opinions of Council members, board of directors, or staff.

In June 2009, the Securities and Exchange Commission proposed to require public companies, under certain circumstances, to include in the company proxy statement and proxy card the names of director nominees submitted by substantial long-term shareholders (generally referred to as “access to the proxy” or “proxy access”). At the same time, the SEC proposed to amend Rule 14a-8(i)(8), the shareholder proposal rule’s “Election Exclusion”, to reverse a 2007 amendment and allow shareholders to submit proposals seeking the adoption of a proxy access regime. The comment period for the rulemaking expired on August 17, 2009, and the SEC received hundreds of comment letters.

Among commenters opposed to the adoption of Rule 14a-11, a common theme was that the SEC should refrain from imposing a uniform federal access procedure. Instead, these commenters urged, the SEC should facilitate private ordering to permit shareholders at each individual company to decide whether proxy access is desirable and to establish its precise contours. To that end, these commenters generally supported the SEC’s proposal to amend the Election Exclusion…(continue reading)