I occasionally receive requests for interviews from media outlets. I try to be generous with my time, especially if the topic is one that I feel strongly about, and I feel informed enough to add value. But the latest request that I recieved has to go down as the oddest I’ve yet received, and one that, quite frankly, was a bit disturbing.

It began with the following email:

Dear Dr. Salomon:

Attached is a national press release that will be going to the media soon and we were hoping to get a couple of quotes from you for this endeavor…

That email was followed, almost immediately, by a call from the agency representing the firm. The gentleman from the agency reiterated the firm’s interest in quoting me. His selling point was, “This PR campaign is about to go national. It will make you famous.” What an odd thing to say to someone. I was dumbfounded. I could not believe what I had just heard. Was someone actually offering to make me famous in exchange for a quote?? Unbelievable.

After collecting my thoughts, I coolly responded, “Fame is not part of my objective function.” I then let him know that it was extremely (approaching infinitely) unlikely that I would be party to that kind of quid pro quo exchange. I also let him know that I thought the request was inappropriate.

But that’s not even the best part. Attached to the email that they sent was a draft of the press release. Paragraph 3 of the press release read as follows:

Dr. ____________________, __________________ of ____________ University, has studied the pending shift in operations and commented “As overseas labor becomes more costly and the process is bogged down with red tape, I think you’ll see many large operations attempting to do what XXX Company is pioneering right now.  Many companies can learn from their steadfast examination of these processes and innovative use of technology to cut costs, increase profits, protect their intellectual property and – when we need it most – bring jobs back to our own country.”

ARE YOU KIDDING ME?? A PRE-FABBED, FABRICATED QUOTE!!

So let me get this straight: They wanted to make me famous by filling my name in the blanks, citing my fictitious study, and fabricating my quote.

Guess they thought it would save me the trouble of actually having to do anything.

Crazy. Distasteful, dishonest, disgusting, and crazy.

Now I know I am not perfect. Very far from it. But this just seemed to cross a line, …even for the PR business. Where are the professional norms for honesty and integrity when you need them??

After my recent posts on university enrollments and affordability (see Enrollment Drops at Private Colleges and The Future of U.S. Higher Education), I received an email from Marc Scheer, author of No Sucker Left Behind: Avoiding the Great College Ripoff. On his site I found a link to a recent Wall Street Journal article (see Weighing Price and Value when Picking a College) that describes some of the very same effects that I anticipated in my earlier posts.

According to the Wall Street Journal:

Facing shrunken savings and borrowing options, parents and students are making some tough trade-offs in choosing and paying for college, suggesting some shifting attitudes toward higher education may endure beyond the recession.

Old dreams of adult children earning degrees from elite, door-opening colleges or “legacy” schools attended by relatives are falling away in some families, in favor of a new pragmatism. Other parents and students are doing a tougher cost-benefit analysis of the true value of a pricey undergraduate degree.

…Joseph Losco, an expert on the history of education, calls “one of the strange things” about the economics of higher education: “Universities and colleges don’t compete on price.” In fact, some college administrators fear lowering their sticker price will hurt their image…

Consumers have been complicit, largely because…“the baby-boomer notion that parents should give it all up for the kids.” In a May 2008 survey of 720 parents of college students by Gallup and Sallie Mae, a student-loan company, 46% said they had never, at any point, ruled out any colleges for their kids based on costs.

But now, “families are much more price-conscious and value-conscious,” Dr. Losco says. A soon-to-be-released Sallie Mae-Gallup study of 1,600 college students and their parents, conducted in March and April, says parents are increasingly anxious about tuition—and students are more skeptical about the value of a degree, compared with the survey from a year earlier.

Such thinking bucks the cultural view that an elite college degree is “the gold standard for both parents and students … validating their worth in society,” Dr. Losco says. Now, more “parents are saying, ‘I don’t have the money to get you where you want to go,’ ” he says.

Even when the economy picks up, some of this new price-consciousness is likely to endure. The engines that have enabled college costs to soar—easy credit, home-equity loans and growth in savings—have stalled. Total college costs are already up 67% in the past decade at private colleges and 84% at public four-year universities, based on College Board data, and graduates’ wages haven’t kept pace.

The percentage of students from middle-income households who are attending state schools is rising, and more lower-income students are enrolling at community colleges, the study shows. “We would expect to see an even greater shift” next year, a Sallie Mae spokeswoman says.

Interesting stuff! Check out the full article.

Back in March I suggested that an open discussion about the future of financial economics seemed warranted (see Future of Financial Economics). I wrote:

Are the fundamental assumptions about human behavior associated with the dominant paradigm in financial economics appropriate?

The first assumption that I took issue with was that of complete markets. In fact, as I suggested:

One of the things that drew me to the field of strategy in the first place (versus finance or economics) is that we start with a baseline assumption that markets are incomplete, and markets break down.

Markets break down largely because humans do not behave as “rational” actors typically assumed in our most celebrated models.

In addition to the view of markets as complete, I took issue with some of the other assumptions underlying the efficient market hypothesis.

…associated with the [efficient market hypothesis] EMH-dominated financial economics view is an assumption that there is a true, objective, underlying fundamental price for an asset. We might deviate from that price in the short run; but in the long run, the fundamental price will prevail.

I concluded by calling for greater inclusion, and an openness to contributions from behavioral economics and other social science disciplines.

All told, I think the field of financial economics would be well served to be more inclusive when it comes to behavioral approaches to human behavior (whether from economics or psychology) and behavioral views of the firm (whether informed by psychology, sociology, or economics). Thankfully, not only are both processes well underway, but in some quarters, they have been for some time.

With that as background, I was pleased to come across a fascinating set of articles from this week’s issue of the Economist entitled “Economics: What went Wrong?” This collection of articles asked fundamentally important questions about the future of the field of economics (see Economics: What went Wrong?, Other-worldy Philosophers, and Efficiency and Beyond).

On the field of economics:

Barry Eichengreen, a prominent American economic historian, says the crisis has “cast into doubt much of what we thought we knew about economics.”

…two central parts of the discipline—macroeconomics and financial economics—are now, rightly, being severely re-examined. There are three main critiques: that macro and financial economists helped cause the crisis, that they failed to spot it, and that they have no idea how to fix it.

On financial economics:

In 1978 Michael Jensen, an American economist, boldly declared that “there is no other proposition in economics which has more solid empirical evidence supporting it than the efficient-markets hypothesis” (EMH). That was quite a claim. The theory’s origins went back to the beginning of the century, but it had come to prominence only a decade or so before. Eugene Fama, of the University of Chicago, defined its essence: that the price of a financial asset reflects all available information that is relevant to its value.

From that idea powerful conclusions were drawn, not least on Wall Street. If the EMH held, then markets would price financial assets broadly correctly. Deviations from equilibrium values could not last for long. If the price of a share, say, was too low, well-informed investors would buy it and make a killing. If it looked too dear, they could sell or short it and make money that way. It also followed that bubbles could not form—or, at any rate, could not last: some wise investor would spot them and pop them.

That is why many people view the financial crisis that began in 2007 as a devastating blow to the credibility not only of banks but also of the entire academic discipline of financial economics.

On macroeconomics:

In many macroeconomic models…insolvencies cannot occur. Financial intermediaries, like banks, often don’t exist. And whether firms finance themselves with equity or debt is a matter of indifference. The Bank of England’s DSGE model, for example, does not even try to incorporate financial middlemen, such as banks. “The model is not, therefore, directly useful for issues where financial intermediation is of first-order importance,” its designers admit. The present crisis is, unfortunately, one of those issues.

…Economists can become seduced by their models, fooling themselves that what the model leaves out does not matter. It is, for example, often convenient to assume that markets are “complete”—that a price exists today, for every good, at every date, in every contingency. In this world, you can always borrow as much as you want at the going rate, and you can always sell as much as you want at the going rate.

The benchmark macroeconomic model…suffers from some obvious flaws, such as the assumption of complete markets or frictionless finance…nuanced theories are often less versatile. They shed light on whatever they were designed to explain, but little beyond.

On behavioral economics:

…[a] branch of financial economics is far more sceptical about markets’ inherent rationality. Behavioural economics, which applies the insights of psychology to finance, has boomed in the past decade. In particular, behavioural economists have argued that human beings tend to be too confident of their own abilities and tend to extrapolate recent trends into the future, a combination that may contribute to bubbles. There is also evidence that losses can make investors extremely, irrationally risk-averse—exaggerating price falls when a bubble bursts.

“In some ways, we behavioural economists have won by default, because we have been less arrogant,” says Richard Thaler of the University of Chicago, one of the pioneers of behavioural finance. Those who denied that prices could get out of line, or ever have bubbles, “look foolish”.

The Economist concludes:

Add these criticisms together and there is a clear case for reinvention…Economists need to reach out from their specialised silos…

I could not agree more.

However you may feel about the future of financial economics, I encourage you to read the articles in full:

• Economics: What went Wrong?
• Other-worldy Philosophers
• Efficiency and Beyond

Given my interest in the history and development of universities and colleges, I found today’s article about private college enrollments interesting, though not entirely unexpected (see Enrollment to Drop at a Third of Private Colleges). According to Bloomberg:

Almost a third of U.S. private colleges expect freshman enrollment to decline in the 2009-2010 school year as families struggle to pay bills and hold down debt, according to a survey.

Fourteen percent of schools surveyed from May 18 to June 19 predicted new undergraduate student enrollment would fall more than 5 percent…Forty-four percent of the schools said tuition deposits for the semester that starts in September declined from a year ago.

…students are struggling to afford college because of the recession…

“This is the most nail-biting season in memory for the admissions staff of some of these places,” Tony Pals, a spokesman for the association [National Association for Independent Colleges and Universities], said in an interview.

These data are consistent with the sentiment that I expressed in December of 2008 (see The Future of U.S. Higher Education). At the time, I suggested that there might be a fundamental structural shift in demand for private university education.

…the cost of higher education, coupled with what I view as a fundamental shift in consumer behavior as a result of the recession, will…usher in a shift in consumption…Gone are the days of taking on exorbitant amounts of debt to send children to private institutions with tuition (not including living expenses) of $40,000 per year, or more. Instead, families will increasingly opt  for public universities with tuition in the $10,000-$15,000 range.

For example, families in Texas might start asking tough questions like, “Is the difference in the price between Harvard and the University of Texas really worth the $120,000 difference?” I am not willing to argue that real differences between being educated at a private university and a public university do not exist; however, I am not sure whether those “benefits” (to the extent that they do, in fact, exist) justify the additional premium in all cases. And those considerations are likely to impact the decisions of consumers.

If frugality represents a fundamental structural shift in consumer mentality and behavior (as I believe it does), individual universities (private universities especially) would be well served to carefully consider what that might mean for their institution in the coming years, and prepare accordingly.

A friend and colleague of mine who accepted a job at a European university jokingly explained in an email yesterday that his move to London could easily be explained by the fact that he had always wanted to become a currency speculator. I asked whether he really want to bet against the Dollar, or for that matter, for the Pound. He preceded to ask me what I thought about the strength of the Dollar, and the strength of the Dollar vis-a-vis the Pound.

I wrote the following, off-the-cuff response (edited slightly to censor expletives and to improve readability):

In my opinion there are a couple of forces impacting the value of the dollar right now.

1. Dollar as a “flight to quality” vehicle (pushing it up)

2. Dollar as a debased currency with the Fed/Treasury programs of fiscal stimulus plus quantitative easing (pushing it down)

The question then becomes which of these effects represents the stronger influence.

Although the dollar has weakened recently, I believe the “flight to quality” effect will dominate in the near term with the dollar strengthening over the next 6 months or so. Eventually however (looking 1 to 2 years out), the debasement effect will kick in leading to a fall in the value of the dollar.

That opinion, however, only addresses the Dollar versus a basket of world currencies, not necessarily the Pound.

With respect to the USD/GBP, it becomes a relative game with respect to the two effects above. Specifically, is the dollar a stronger “flight to quality” play than the pound and/or is the Bank of England debasing the Pound faster than the Fed/Treasury is debasing the dollar?

I think the answer to both is an emphatic yes. At this point, the Dollar remains a stronger “flight to quality” vehicle than the Pound given its higher status in the pecking order of reserve currencies. In addition, although the US recession has been severe by almost any metric, the situation is actually worse in the UK, leading the UK to engage in larger relative programs of both fiscal stimulus and quantitative easing.

For these reasons, although I feel that the value of the dollar will decrease with respect to world currencies in the long term, I expect the Dollar to strengthen vis-a-vis the pound.

Interesting stuff. In an article published last week at Slate (ht Barry Ritholtz), Daniel Gross takes issue with a McKinsey & Co. report about the The New Power Brokers (see McKinsey’s Cracked Crystal Ball). Gross criticizes McKinsey for offering inaccurate predictions with respect to the rise of private equity funds and hedge funds. Gross writes:

In October 2007—the precise market top—McKinsey Global Institute, a think tank nestled in the confines of the blue-chip consulting firm McKinsey & Co., issued a report documenting the stunning rise of four comparatively new pools of capital—hedge funds, private-equity firms, Asian sovereign capital (Asian central banks and sovereign wealth funds), and petroleum exporters (companies, governments, and central banks of oil producers). These new power brokers had been major beneficiaries of recent trends in the global economy. And if existing trends were to continue—and why wouldn’t they?—they’d be even bigger in a few years.

As the executive summary noted (here’s the whole report), in mid-2007 that group collectively held $8.4 trillion in assets, more than triple the amount they held in 2000. But that was just the beginning. “Under current growth trends, MGI research finds that their assets will reach $20.7 trillion by 2012.”

Like virtually every professional economic-forecasting outfit, McKinsey’s crew failed to see how the easy money created by the rise of Asian sovereign wealth and petroleum exporters would be put to spectacularly bad use by private-equity firms and hedge funds…Of course, you don’t have to be a management consultant to know that simply projecting recent trends into the near future—forecasting by extrapolation—is dangerous, especially today, when volatility and discontinuities are rampant. A scant two years ago, MGI’s brainpower was unable to foresee the forces that would cause hedge funds to take a tumble and private-equity deals to blow up.

The interesting thing to me about Gross’ piece is not the criticism of McKinsey. It is not even that McKinsey might have been off in its prognostication. The most interesting part was that the article elicited a response from McKinsey. Why McKinsey would feel threatened by the piece is beyond me. It’s not like the piece does irreparable harm to McKinsey’s reputation.

Nevertheless, Rebeca Robboy, the media representative from the McKinsey Global Institute, responded in the comments section on the slate site. She writes:

Dan Gross is entitled to disagree with our conclusions, but not to misrepresent our research…

First, Gross wrote that our original 2007 report “utterly failed to sniff out the systemic risks” posed by the rise of these four increasingly large and influential investor groups. In fact, and to the contrary, our report explicitly noted that the “the rise of the power brokers also poses new risks to the global financial system.” We noted specifically that the surplus capital invested by oil exporters and Asian sovereign investors was lowering interest rates and “may be inflating some asset prices and enabling excessive lending” and we highlighted real estate as an area that warranted concern.

Second, Gross fundamentally misrepresents our work by stating that we assume that recent trends will continue into the future.

Third, he errs in calling our work “forecasting by extrapolation.” We are not forecasters. We have reported the facts based on proprietary databases, and our analyses of future trends under three proprietary macroeconomic scenarios.

SIDEBAR: Call me crazy, but with respect to the third point, doesn’t “analyses of future trends under three proprietary macroeconomic scenarios” qualify as a forecast? Am I missing some semantic subtlety?

Anyhow, I still find it interesting that McKinsey felt compelled to respond to Gross in a public forum. Although I am sure their response was in the interest of setting the record straight, it comes across as defensive overly sensitive, borderline desperate. C’mon, this is McKinsey we’re talking about, the Goldman of consulting. They need not have responded.

For the record, I have been writing about private equity funds for quite awhile. By the end of 2006/early 2007, it was patently obvious to most that hedge funds and private equity funds were in decline. In fact, in April of 2007, in a post entitled Private Equity – Stupid Money Chasing Stupid Deals, I wrote:

I do believe that the increasing number of private equity deals of late is an exemplar of excess…I refer to this as the phenomenon of stupid money chasing stupid deals…will all these ventures be successful? Likely not. With most private equity firms flush with cash as a result of the global liquidity glut (caused by historically low interest rates and a change in attitudes toward risk) and with only a finite number of targets to buy, increased competition among LBO funds (and industry acquirers) for the same handful of firms has led many buyers to overpay. Moreover, with creditors offering enough debt to hang oneself with, many targets will become overextended.

I followed that in March of 2008 with a post about the end of the private equity era (see Private Equity: The End of an Era). I wrote:

If anyone thought that private equity acquisitions were driven purely by skillful strategists and financiers (alpha in their parlance), here’s your evidence to the contrary. Many such deals were a simple product of the times (fueled by the availability of cheap money and credit). This is not to say that some private equity players are not skilled, just that there are likely much much fewer of the skilled type than many of us had thought just as little as one year ago.

Frankly, I have expected this endgame for quite awhile now – one in which many of the private equity portfolio companies would go bankrupt, and potentially take a few of their parents with them…

But more than that, for me, these events officially mark the end of an era. We will likely look back at this period and eventually refer to it as the second LBO wave. In my opinion, there are now two identifiable, and distinct, LBO waves:

1. The 1980’s – the wave that most of us associate with the LBO heyday; driven by the break-up of conglomerates, culminating with the RJR Nabisco deal, and etched in our memories by the movie “Wall Street”
2. The 2000’s – the cheap money wave; fueled by excess leverage, cov-lite deals, financial engineering, and a dose of Sarbanes-Oxley compliance avoidance

CAVEAT: None of my writings about private equity qualifies as a forecast, …simply reporting the facts based on proprietary databases, and my analysis of future trends.

My schedule has kept me on the road for the better part of the past few weeks. I first traveled to Los Angeles, then San Diego, and then on to Cape Cod (with a brief one-night stopover in New York). The bookends of the trip (LA and Cape Cod) were largely recreational. The San Diego leg was strictly business, where I attended the Annual Meeting of the Academy of International Business (AIB).

The AIB meetings were fun, as usual. I got to participate in Academy business, discuss research with colleagues, catch up with friends, and attend some parties (which, not unexpectedly, were subdued compared with years past). In LA and Cape Cod, I spent my time largely with family and friends.

Last summer, while in Cape Cod, I made the following observations (see Musings Après Vacation):

1. “For Sale” signs on homes were abundant
2. There was, uncharacteristically, little traffic on the drive between New York City and Cape Cod
3. Our usual haunts (e.g., Cooke’s, Four Seas) seemed unusually quiet

This year I’ve noticed that “For Sale” signs have stopped growing like weeds. Although there continue to be more homes for sale than I am accustomed to seeing in a usual summer, there are certainly fewer than last year. This stylized fact seems to reflect an improvement in home inventory conditions; however, I am hesitant to characterize it as such for certain, as it could simply be a reflection of a substantial “shadow inventory” of homes (see Calculated Risk for information on shadow inventory and huge shadow inventory).

One thing that I have noticed much more of this summer in and around Cape Cod is a huge increase in “For Sale” and “For Rent” signs for commercial real estate. Many buildings have been abandoned. Many are available for sale/lease. There is an incredible amount of vacancy at the local strip malls, and even at the Cape Cod Mall. This is consistent with commercial real estate as the next shoe to drop in this cycle (see Commercial Real Estate Time Bomb).

Note: I travel to LA quite frequently too, and the trends struck me as similar to those that I described for Cape Cod. I noticed fewer homes for sale on this trip than on previous (the same caveat regarding “shadow inventory” applies). Likewise, there has been a noticeable increase in signs advertising the sale/lease of commercial real estate.

Insofar as getting in and out of NYC on summer weekends (and in and out of Cape Cod), the highways seem slightly more trafficked than last summer. But again, the crowds are far from normal. Ditto for foot traffic at our local haunts. Although business seems a bit better than last year, it is way off from what I would characterize as normal, healthy summer activity.

In concluding last year’s post, I wrote:

Now I realize that the anecdotes that I’ve shared simply represent one person’s observations (an n of 1 as we like to say in the business), but if my experiences thus far this summer are any indication, I think we’re in for a long and difficult slog. I have never seen anything quite like it…

Not much has changed from last year. Economic activity continues at depressed levels. The best I can say is that we may have found a floor. The question remains: Where do we go from here??

As I have suggested in previous posts, the immediate growth engine for the U.S. economy is unclear. I see some potential in alternative energy, nano-technology, and biotech (specifically, genome mapping and its associated applications). However, I am skeptical that those industries will grow fast enough to quickly bring about robust growth. Although the U.S. economy will likely return to growth in 2010, there is a decent probability that the recovery will be a weak one.

Oh yeah, …and I’ll be back from vacation next week.

In January I predicted (see Notable Bankruptcies of 2009: Q1) that “major” bankruptcies in 2009 would challenge the 383 mark set in 2001 (the high-water mark after the dotcom bubble). I even suggested that it was possible that we could exceed 400 “major” bankruptcies in 2009.

According to Bankruptcydata.com, there have been 156 “major” filings thus far in 2009. Assuming that bankruptcies are equally distributed throughout the year, this puts us on pace for 312 bankruptcies. That is tracking well shy of my prediction. In fact, bankruptcies were down significantly from Q1 to Q2, as there were 90 bankruptcies in the first quarter but only 66 in the second.

That stylized fact begs the question: Is that a “green shoot” dip in bankruptcy filings, or is this simply a seasonal fluctuation?

Although I cannot be certain, the latter makes more sense for several reasons. First, bankruptcies are a lagging economic indicator. As with employment, bankruptcies typically peak well after the economic trough. For example, although the dotcom bubble burst in March of 2000, bankruptcies did not peak until 2001, and were elevated into 2002. So even if you believe that the economy has bottomed out (which is not entirely clear yet), we should still expect to see bankruptcies rise. Second, according to bankruptcy statistics from the U.S. Courts website, the pace of bankruptcy filings generally increases in the second half of the year.

For these reasons, I expect the filing pace to quicken as the year goes on, and I believe that we will ultimately challenge the 383 mark from 2001.

Below you can find an updated list of what I see as the “noteworthy” bankruptcies of 2009, as reported by Bankrupctydata.com. New additions since January appear in RED (please note that this is not an exhaustive list):

• 1st Centennial Bancorp (Banking)
  
• AbitibiBowater Inc. (Paper)
• Adamar Inc. dba Tropicana Casino & Resort (Gambling)
• American Community Newspapers Inc. & LLC (Newspapers)
• ARG Enterprises, Inc. (Restaurants)
• Aventine Renewable Energy Holdings, Inc. (Energy)
  
• BankUnited Financial Corporation (Banking)
  
• Bearingpoint, Inc. (Consulting)
• BI-LO, LLC (Supermarkets)
• Bruno’s Supermarkets, LLC (Supermarkets)
• Butler International, Inc. (IT Services)
• Cape Fear Bank Corporation (Banking)
• Capital Corp of the West (Banking)
  
• Charter Communications, Inc. (Telecom)
• Chemtura Corporation (Chemicals)
• Chrysler LLC (Automobiles)
• Crescent Resources, LLC (Real Estate)
• Eddie Bauer Holdings, Inc. (Retail)
• Ennis Homes, Inc. (Real Estate)
• Extended Stay Inc. (Hotels)
• Filene’s Basement, Inc. (Retail)
  
• Fleetwood Enterprises, Inc. (Recreational Vehicles)
• Fortunoff Holdings, LLC (Retail)
• Fountainbleu Las Vegas, LLC, (Hotels)
• Fulton Homes Corporation (Real Estate)
• General Growth Properties, Inc. (Real Estate)
• General Motors Corporation (Automobiles)
• G.I. Joe’s, Inc. (Retail)
• Goody’s LLC (Retail)
• Gottschalks Inc. (Retail)
• Herbst Gaming, Inc. (Gambling)
• ION Media Networks, Inc. (Television)
  
• Idearc (Publishing)
• Journal Register Companies (Newspapers)
• Lyondell Chemical Company (Chemicals)
• MagnaChip Semiconductor LLC (Semiconductors)
  
• Magna Entertainment (Gambling)
• Masonite Corporation (Real Estate Manufacturing)
• Metromedia International Group, Inc. (Media)
• Midway Games, Inc. (Entertainment Software)
• Monaco Coach Corporation (Recreational Vehicles)
• Muzak Holdings LLC (Entertainment)
• Nortel Networks, Inc. (Telecom)
• Pacific Energy (Oil & Gas)
• Philadelphia Newspapers, LLC (Newspapers)
• Recycled Paper Greetings, Inc. (Greeting Cards)
• R.H. Donnelley Corporation (Marketing)
  
• Ritz Camera Centers, Inc. (Retail)
• Shane Company (Jewelry)
• Silicon Graphics, Inc. (IT/Computing)
• Silver State Bancorp (Banking)
• Six Flags, Inc. (Entertainment)
  
• Smurfit-Stone Container Corporation (Paper Manufacturing)
• Source Interlink Companies, Inc. (Marketing)
  
• Spectrum Brands (Consumer Products)
• Star Tribune Companies (Newspapers)
• Sun-Times Media Group, Inc. (Newspapers)
• Tarragon Corporation (Real Estate)
• Team Financial, Inc. (Banking)
  
• Thornburg Mortgage, Inc. (Banking)
  
• Trump Entertainment (Gambling)
• U.S. Shipping Partners L.P. (Marine Transportation)
  
• Visteon Corporation (Auto Supplies)
• Wall Homes, Inc. (Real Estate)
• WL Homes, LLC (Real Estate)
• Young Broadcasting, Inc. (Television)