Six months isn’t long term – Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

Robert Pozen, Senior Lecturer, MIT Sloan School of Management

From Wall Street Journal

President Trump tweeted on Friday that he had directed the Securities and Exchange Commission to study a suggestion from a business leader, later revealed as outgoing Pepsi CEO Indra Nooyi: “Stop quarterly reporting & go to a six month system.” The popular theory is that quarterly reporting discourages firms from making long-term investments.

But switching to semiannual reporting wouldn’t help. Find us CEOs with stockpiles of good, long-term projects that they are not pursuing—but that they would, if only they had three extra months to report earnings. Reporting every six months is nobody’s definition of “long term.” Besides, investors have waited patiently as Amazon, Netflix and many biotech firms have followed long-term strategies.

In 2007, financial reporting in the United Kingdom moved from semiannual to quarterly. Yet capital expenditures and research-and-development spending didn’t fall significantly over the next three to six years, according to a study from the CFA Institute Research Foundation. When the quarterly requirement was ended in 2014, investment by U.K. companies didn’t change.

Read More »

A live conversation with Chester Spatt and Deborah Lucas: Financial regulation–What Lies Ahead?

Former SEC Chief Economist and MIT Golub Center Senior Fellow Chester Spatt

Our latest installment of the MIT Sloan Experts Series includes a live conversation with former SEC Chief Economist and MIT Golub Center Senior Fellow Chester Spatt and Golub Center Director and Professor of Finance Deborah Lucas.

As the 10-year anniversary of the great financial crisis approaches, the program seeks to answer two questions: what have we learned? And have we made enough progress to prevent a repeat of something similar? Chester and Deborah will discuss financial regulation and housing market finance reform, and share their ideas for fostering stronger ties between the regulatory and the academic communities and what lies ahead

MIT Sloan Prof. and Golub Center Director Deborah Lucas

Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute also appears on the program to talk about the housing shortage and housing finance reform.

Watch the entire livestream here.

5 commandments of cloud preparation — John Mooney and Jeanne Ross

Jeanne Ross, Dir. & Principal Research Scientist at MIT Sloan's CISR

Jeanne Ross, Dir. & Princ. Res. Scientist at CISR

John Mooney, Researcher at the MIT Sloan's CISR

John Mooney, Researcher at CISR

From Computerworld

Talk of the cloud has stirred up a lot of excitement. A 2011 mandate from the government CIO to move toward a cloud-first strategy has managers hoping that public cloud solutions will provide a quick fix to sticky technology challenges and messy business processes.

To some extent the hype is real. The cloud is transforming how organizations use and manage technology. As cloud adoption becomes more prevalent, government organizations that resist its charms risk missing opportunities to enhance the services they deliver.

Read More »

What Facebook got right with its IPO — Howard Anderson

Image credit: MarketWatch

From WSJ MarketWatch

CAMBRIDGE, Mass. (MarketWatch) — A year after the Facebook IPO the media bellyaching about all the things the social media company did wrong is relentless.

“Facebook, One Year Later: What Really Happened in the Biggest IPO Flop Ever,” reads a headline in The Atlantic. “Missed out on the Facebook IPO and couldn’t be happier,” reads another on CNNMoney. And from Forbes: “Facebook Year One: Fighting Back from an IPO Flop.” Read More »

Saving the Dodd-Frank Act derivatives reforms—John Parsons

MIT Sloan Sr. Lecturer John Parsons

The Dodd-Frank Act included important reforms of the derivative market. Nearly three years after passage of the Act, Congress is now considering amendments. I’m testifying this week on the derivatives reform amendments before the U.S. House of Representatives in opposition of several of the amendments as a reversal of the needed reform.

Title VII of the Dodd-Frank Act mandates important changes in U.S. derivative markets, but many of these changes are not yet fully implemented. As Americans remain threatened by the same dangers that exploded on the country in 2008, Congress should consider ways to encourage and enable the full implementation of the Dodd-Frank derivative reforms. Read More »