Edward J. Strafaci ~ Academic Blog

Class , take a look at this on Student Loans . It was in this week's WSJ . That is why it is crucial to read the financial press constantly you don not want to miss anything! Millions More to Qualify for Student-Loan Modification Program WASHINGTON—Five million more Americans can join a program to lower student-debt bills, part of a broad campaign by the Obama administration that has provided relief for some households but done little to reduce underlying college costs. Under rules effective Tuesday, any American who borrowed directly from the federal government for college or graduate school can enroll in a program called Pay As You Earn. The program—previously open to only newer borrowers—sets the monthly payment at 10% of a borrower’s discretionary income, defined as adjusted gross income minus 150% of the federal poverty level. Monthly payments typically drop by hundreds of dollars under the program but extend beyond the standard 10 years—to a maximum 20 years for t...

  What separates highly successful people from the “average crowd?” This is a topic that is widely discussed. If you want to be successful, you have to watch carefully what other successful people do and imitate them. While every successful person has his or her own unique approach, there are a couple thoughts and actions they have in common. Here are 7 habits many successful people have! 1. They make a difference If you have an idea, that idea has to change peoples life’s. As long as you’re not helping other people, it’s useless. Don’t start with an activity or business primarily to make money, it won’t work. When you create fans by offering your expertise, they are willing to pay for it. The problem with today’s entrepreneurial mindset is that’s all about “quick” money and not necessarily about making a difference. “Strive not to be a success, but rather to be of value.” —  Albert Einstein 2. They focus on productivity instead of on being busy D...

What is self-confidence? Is it an over-inflated sense of self, the ability to smooth-talk, and the arrogance that you’re always right? Is it self-esteem from the opinions of others? Or is it the ability to handle any situation–including failure–because of a positive mindset, keen self-awareness, and willingness to ask for help? Genuinely confident people develop confidence naturally through practiced effort and self-discipline, with the knowledge that adversity is inevitable, and with a single-minded focus to help others. I used to be very socially awkward. Then I started to work on my public speaking skills, through speaking organizations, training, books, practice, and speech contests. Eventually, others asked me for help. Through this process of hard work and mentoring others to be successful, I became much more confident. You can’t create confidence out of thin air. It’s the process of authentic self-improvement and helping others that leads to confiden...

Next week, when Federal Reserve officials meet to decide whether to raise interest rates for the first time in nine years, one question will be front and center: How much faith should be placed in a line on a graph first drawn by a New Zealand economist nearly six decades ago, based on data on wages and employment in Britain dating to the 1860s? That would be the Phillips curve, one of the most important concepts in macroeconomics. It shows how inflation changes when unemployment changes and vice versa. The intuition is simple: When joblessness is low, employers have to pay ever higher wages to attract workers, which feeds through into higher prices more broadly. And inflation is particularly prone to rise when the unemployment rate falls below the “natural rate” at which pretty much everybody who wants a job either has one or can find one quickly. As the Fed’s chairwoman, Janet L. Yellen, put it in a  2007 speech,  the Phillips curve “is a core component of every realis...

Q.If stocks hold greater return on investment and if longer horizons prove their volatility to be equal to or less than bills and bonds would they always be the most attractive investment? Or is this just a selling  point for stocks over bills and bonds? A. Actually the volatility of equities is always greater, given their deviation from a normal distribution (more variance = more risk). In other words any time we have more predictability we have more certainty, and thus, less risk.  The question now becomes do we want the most efficient portfolio (lowest risk per unit of return) or are we more risk seeking. Higher risk=less efficiency=more return .Think running play in football (most efficient per risk unit) as opposed to passing play (the longer the pass, the greater the potential and risk).