Streetwise Professor

Streetwise Professor

“Streetwise Professor” is the web persona of me, who happens to be Craig Pirrong.*   My day job (to the extent that I have a real job) is as Professor of Finance and Energy Markets Director of the Global Energy Management Institute at the Bauer College of Business, University of Houston. I have been in academia since 1989–shortly before the Ferruzzi soybean squeeze on the Chicago Board of Trade in July of that year, which was quite propitious and which had a big impact on the trajectory of my career. I have a PhD in Business Economics from the Graduate School of Business at the University of Chicago.

Looking at my cv one might have a hard time identifying a common thread, but it is there. My formal training is as an industrial organization economist, but I took the PhD finance sequence at Chicago. My thesis was on an application of core theory, completed under the tutelage of a great economist, Lester Telser. I think core theory is an extremely valuable tool, but the profession is not quite so enthusiastic. During my first academic job in the Business Economics Group at the Michigan Business School, recognizing that core theory was not my road to academic success, I was casting around for a new research direction, and Ferruzzi provided it. Through a series of serendipitous events, I had the opportunity to work on a project evaluating how to re-design the Chicago Board of Trade Markets to reduce the likelihood of a repeat of the events of July, 1989. This led to many academic spinoffs.

Specifically, the Ferruzzi episode and my work on the CBT project made me aware of many interesting points of contact between finance and IO, and much of my research has explored that nexus. I’ve written a good deal on manipulation in financial markets–manipulation is a manifestation of market power, which is a core concept in IO. Since exchanges have some legal responsibility to prevent and deter manipulation in financial markets, I became interested in the incentives that exchanges face in carrying out such tasks. This in turn required an analysis of the organization of governance of exchanges–another IO-related subject. Moreover, it soon became clear that the incentives of exchanges to adopt efficiency enhancing measures also depends on the nature of competition between them, the analysis of which resulted in several articles on the “macrostructure”–the industrial organization– of financial markets.

Along the way, the study of commodity markets like soybeans or oil which have been manipulated from time to time sparked an interest in commodity price formation and commodity price dynamics, and their implications for derivatives pricing. My most active research in this area focuses on electricity prices and electricity derivatives, but I am also working on models applicable to storable commodities.

My academic work has also allowed me to serve as an expert in legal cases involving commodities and derivatives.

Outside of academia and litigation consulting my time is spent primarily with my family–my wife Terry, and my daughters Renee and Genevieve. I have a deep interest in history–particularly the history of the US Civil War–that dates back to my childhood, and that I continue to pursue through reading and travel; I would have become a historian if I had been independently wealthy. I am also a big Chicago sports fan, although I have to say that the Cubs’ persistent ineptitude is slowly draining me of my interest in baseball, and the Bulls–oy. The Blackhawks–double oy. The Bears, you say? Well, we’ll see if they’re for real or not soon.

* The original version of this page didn’t include my name.   Never really thought about it.   I wrote it in haste late one night in January, 2006, and didn’t really look at it after it was originally posted.   I didn’t intend for this to be an anonymous blog, and I certainly gave enough biographical and photographic evidence to let anyone interested figure out who I am.   Indeed, many people figured it out, and I also gave out the blog name to a lot of folks.   I’ve edited this bio page to include my name because a reporter who has interviewed me from time to time in the past came across it, and thought that the blogger sounded familiar, but wasn’t sure it was me.   So, now there’s no possibility for confusion.