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| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
"The Bloomberg," pp. 60-72: Say the name "Bloomberg," and many people will conjure up images of the popular, twice-elected mayor of New York City, Michael Bloomberg. But for many others — investors, brokers, bankers, attorneys — the Bloomberg is a device, a tool, a godsend. The product that bears Mike Bloomberg's name, and has afforded him the wealth and reputation that enabled him to reach the mayor's office, is a subscription service that sells financial data, analytic software to leverage the data's usefulness, trading tools, and news, all available via a color-coded keyboard and terminal provided by the company the Mayor founded, Bloomberg LP. Both Bloombergs — the man and the company — are powerful and accomplished, and appear to be poised for even greater achievements. The 65-year-old Republican mayor has hinted at a run for the White House. If that seems like a long shot, consider the unlikely rise of Bloomberg LP. When the company entered the scene 25 years ago, Dow Jones was the undisputed king of financial information, with the Wall Street Journal and the Dow Jones's ticker as its crown jewels. And now? The privately owned Bloomberg's 2006 revenues were $4.7 billion vs. the publicly held Dow Jones's $1.9 billion. And Bloomberg's estimated $1.5 billion operating profit handily beats Dow Jones' $105 million. The biggest threat to Bloomberg's dominance now is, well, its own dominance. If it can adeptly dodge the curse of complacency in its second 25 years, expect to hear the words "Bloomberg" and "success" in the same sentence for a long time to come. In this article, students read about the spectacular growth of financial-information company Bloomberg LP and its ambitious founder, New York City's Mayor Michael Bloomberg. Discussion Questions:
"The Great Corn Gold Rush," pp. 74-79: Thanks to ethanol, corn has become a golden crop in more ways than one. Worth about $2 a bushel just eight months ago, corn has doubled to $4 a bushel, and some industry analysts predict that figure could hit $5 before this year's crop is harvested. A corn farmer who made $27,000 raising 1,000 acres of corn in 2004 stands to make 10 times that profit — an astounding $270,000 — for the same amount of corn produced in 2007. So why are some farmers more anxious than ecstatic over their apparent good fortune? With farmers scrambling to cash in on corn, land prices and rents will likely skyrocket. Meanwhile, farmers will increase the acres of corn they plant, often at the expense of other crops like wheat, cotton, and soybeans. Because corn is a more input-intensive crop than these, the shift will push up prices for equipment, seed, and fertilizer. Eventually, land and input costs could rise so much that farmers will make no more off $4 corn than they did off $2, and their businesses will be riskier overall. One storm or drought or even a market crash could conceivably bankrupt scores of farmers. As corn prices rise, the rest of the economy takes a hit, too. The feed costs of cattlemen and hog farmers have shot up to nearly intolerable levels, ethanol producers have seen their profits slashed, and food companies are being squeezed and passing along higher costs to consumers. It could very well be that farmers, like tech companies before them, are sitting on a "dot-corn" bubble just waiting to burst. Students take a closer look at the sudden spike in corn prices and what it could mean for farmers and the total economy. Discussion Questions:
"Ken the Conqueror," pp. 80-86: At 38, Ken Griffin is already one of the world's most powerful investors. The $13 billion, Chicago-based hedge fund he built, Citadel Investment Group, is an exquisite trading machine. But Griffin wants to be much more than a billionaire wunderkind with a head for figures. As a former Citadel manager recently put it, "it seems like Ken wants to be a J.P. Morgan or John D. Rockefeller." That's hard to do if you're an "introvert's introvert," as an acquaintance describes him, and an adherent of the notoriously reclusive hedge-fund mentality. So Griffin and his society-savvy wife have been taking measured steps to change his image — or create one. He has joined the Chicago 2016 Olympics organizing committee and various high-profile boards, made one of the largest private donations ($19 million) ever made to the Art Institute of Chicago, and even appeared in a Chicago Mercantile Exchange ad in the Wall Street Journal. On the business side, Griffin has launched a flurry of business deals in his effort to create a diversified, large-scale financial institution on the order of Goldman Sachs or Morgan Stanley: buying up a mortgage operation here, some distressed assets from another hedge fund there. Last fall Citadel made hedge-fund history when it announced plans to sell up to $2 billion in bonds, and there's steady speculation that the company will go public. So is Rockefellerdom imminent? Only if Griffin can learn to master the human element of management — perhaps the trickiest task of all for a reticent numbers wiz. This article reveals how Ken Griffin is endeavoring to both build an investment empire and create a full-blown, captain-of-industry immortality for himself. Discussion Questions:
"Where Are They Now?" pp. 101-108: It can be a bumpy ride from fame to obscurity in business. What are some of the newsmakers of yesteryear up to these days? Foster Winans, the disgraced Wall Street Journal columnist and public face of insider trading, is ghostwriting books. Ken Fox, the one-time poster boy for dot-com mania, is running a Manhattan-based buyout firm, Stripes Group. Fred Joseph, CEO of Drexel Burnham Lambert during the Michael Milken days, has done investment consulting and founded an investment bank since his former firm's 1990 liquidation. Ford's ex-CEO Jac Nasser is content in his role as a managing partner at One Equity Partners, though he admits he misses the passion of developing new cars and trucks. Now retired, the once hard-charging CEO of ConAgra and RJR Nabisco, Mike Harper, recently dedicated the Josie Harper Campus at Nebraska Methodist College of Nursing in honor of his late wife. Linda Wachner, the second female CEO of a FORTUNE 500 company (Warnaco), has been tending to health issues since her 2001 ouster, but she'd like to run a company again. Ed Artzt, the Procter & Gamble CEO who supercharged company growth in the 1980s, is now a senior advisor at Kohlberg Kravis Roberts, and at 77, is still learning every day. Robert Crandall keeps almost as busy now as he did as CEO of American Airlines, serving on three public and two private boards and trying to launch an air charter service. Rebecca Mark, the one-time chief of Enron International, now serves on the board of WaterHealth International, a venture-backed startup providing clean water to communities in India. Students examine what some of the business world's biggest heroes and rogues of the recent past are doing now. Discussion Questions:
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