This One November 13, 2008March 12, 2017 CARTOONS I particularly like this one and this one and this one. PARADISE The reviews just keep coming. If you want to visit Costa Rica, grab some friends, choose a house – this one or this one or this one – and know that for each week you stay, I will extend your access to this web site by three weeks. EDUCATION It’s just one email, but it says a lot about the hole we’re in: From: SF State President Robert A. Corrigan Date: Tue, Oct 28, 2008 at 7:45 PM Subject: The budget and the spring class schedule Dear Allison: Yesterday you received a message from the Registrar informing you that registration for the spring 2009 semester is going to start several weeks later than originally scheduled. I am writing to explain why we have taken this action and what recent changes in the state budget mean to all of us at SF State. As you have no doubt read, the long-delayed state budget – which started with a deficit – has worsened in recent weeks, with revenues falling well below projections. In response, the Department of Finance has required state agencies to make a $390 million General Fund budget cut – $31.3 million from the CSU alone. SF State’s share of that cut will be slightly under $1.9 million. We are going to be able to cover that reduction from funds we held in reserve earlier this year, in case something of this sort might happen. That is the good news. Now, however, it is looking very likely that the CSU and other state agencies will be told to cut their budgets again in mid-year. We do not know the size or exact timing of such a cut. We do know, however, that it would have major impacts on SF State. Among them would be reduction of the class schedule. With this in mind, we felt that continuing spring registration as originally planned would be unfair to students. You might register for classes only to find out later that they had been cancelled. Much better, we think, to wait a few weeks, plan carefully for potential cuts of various sizes and see what new information we can gather, then offer you a class schedule that we believe is realistic, one you can count on. . . . ARBITRAGE Chris Brown: ‘I thought you might enjoy this strange item which illustrates the [occasional] inefficiency of the stock market. When one company spins off part its business, they often issue ‘A’ shares in the IPO, and then decide to spin the rest of the company off as ‘B’ shares. In several cases, the B shares are equal with respect to dividend and ownership stake, but have superior voting rights. You’d expect that the B shares would ultimately trade for the same or just a little more than the A shares, but for at least four companies I’m aware of, the shares are trading backwards from the expected relationship (e.g. BBI/BBI.B, CMG/CMG.B, MWA/MWA.B, SPWRA/SPWRB). Ordinarily, hedge funds would help close the spread by buying the cheaper B shares and shorting the overpriced A shares. (Full disclosure: My fund has positions in some of these, long B and short or synthetically short A. I’m betting these spreads will narrow.)’ ☞ I should perhaps have posted this sooner. Since Chris sent me this, some of those spreads have narrowed. Then again, this is not a game for casual investors, not least because some of the A shares are unshortable, and the transaction costs of setting up a ‘synthetic short‘ can eat up much of the potential profit.