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In mid-January 2008, Merrill Lynch announced a $6.6 billion mandatory convertible-preferred share issuance, much of which was placed privately with the Kuwait Investment Authority (KIA), the Korean Investment Corporation (KIC), and the Mizuho Corporate Bank. The case is set during the subprime-mortgage crisis, which plagued banks and depleted their capital. It focuses on the decision of John Thain to issue capital and place it with sovereign wealth funds (SWFs) in an effort to stabilize the company and put it on the road to growth and profitability again. The case describes the various types and origins of SWFs, their orientation, and their recent intensive investment activity in the global financial-services sector. The case also discusses the transparency of SWFs and their role in the global financial system as liquidity-providing long-term players. Finally, Merrill Lynch's decision to issue the specific financial instrument to replenish its capital (mandatory convertible-preferred) and its terms are analyzed.

Intercultural competence has been found to be increasingly important. The purpose of this paper is to understand how intercultural competence impacts service providers’ ability to recognition faces of both black and white consumers.

Two experiments were administered to understand how intercultural competence impacts recognition of black and white consumer faces.

The authors find that the more intercultural competence that respondents report with blacks, the better they are at distinguishing between black regular customers and black new shoppers in an experiment. The authors find no impact of intercultural competence on the ability of respondents to differentiate between white consumers. These findings hold for respondents in the USA and South Africa.

One limitation of this research is that the studies were conducted in a controlled lab setting. Thus, one could imagine additional noise from a true consumer setting might increase the effects of these results. Another limitation is the focus on only black and white consumer faces. In this paper, the authors focused on these two races, specifically to keep the factorial design as simplified as possible.

The implications of this research are important given that the ability of employees’ recognizing customer faces can affect customers’ day-to-day interactions in the marketplace.

Is the average M&A adventure just an executive ego trip? Is it management folly, or can it be done so that it reliably produces growth? A model presented here may help executives who are engaged in making acquisitions and making them work navigate the shoals of mergers and acquisitions more successfully.

Previous research has focused on identifying factors that influence buyers who uses price as a cue to quality. However, little work has been done to explain the theory of association and the psychological processes behind the buyer’s price‐quality association. This study examines the process from a psychological perspective and examines some antecedent variables in the formation of a price‐quality inferential belief. Data is collected for two product categories among a sample of young respondents. Results show that (1) the link between perceptual and inferential belief about the price‐quality association is stronger when the perceptual belief is based on direct purchase experience rather than on advertising; (2) buyers that lack direct purchase experience of a product category tends to rely on advertising to form their inferential belief. Implications are discussed, limitations are noted and directions for future research are indicated.

This article estimates the loan spread equation taking into account the endogenous matching between banks and firms in the loan market. To overcome the endogeneity problem, I supplement the loan spread equation with a two-sided matching model and estimate them jointly. Bayesian inference is feasible using a Gibbs sampling algorithm that performs Markov chain Monte Carlo (MCMC) simulations. I find that medium-sized banks and firms tend to be the most attractive partners, and that liquidity is also a consideration in choosing partners. Furthermore, banks with higher monitoring ability charge higher spreads, and firms that are more leveraged or less liquid are charged higher spreads.

In January 2008, Citi and Merrill Lynch are trying to steer their ships back to calm waters. The new CEOs, Vikram Pandit (Citi) and John Thain (Merrill), have been at the helm of their companies for less than three months. This case focuses on their steps to counteract the massive losses resulting from their firms' investments in subprime-mortgage structures. What actions have these leaders taken thus far and what actions should they consider going forward? See also “Warren E. Buffett, 2008” (UVA-F-1550).

As a result of the changes caused by the preparation of foods gradually passing out of the home into the hands of manufacturers, there has arisen an absolute need for a complete supervision of the public food supplies. A supervision which shall place some limit upon the substitution of cheaper and inferior methods and dangerous materials in place of the standard formerly used in our homes.