Student Experiences in Economics and Business
Resent Field Session Events
Denver Branch of the Kansas City Federal Reserve Bank
May 11, 2015
Written by: Andrea Benefiel, class of 2017
Today we visited the Denver Branch of the Federal Reserve of Kansas City, which is located downtown near the 16th Street Mall. It is one of three branches, and connects Colorado, Wyoming, and northern New Mexico to the nation’s central bank. The Denver Branch’s roles include analyzing the regional economies, maintaining a stable and competitive banking system by regulating financial institutions, and also promoting economic and personal financial literacy. We met out front and made our way through security and into the lobby (while Dr. L got her car searched by men with guns! - the security here is real). Inside, there is a small money museum where they have lots of old notes on display, as well as some counterfeit 20's to test your money knowledge!
We started our tour in a very professional-looking meeting room, which had a temporary "Colorado School of Mines" sign out front that made us feel very official. After grabbing some refreshments, we met with economists Alison Felix and Sam Chapman. Alison holds a PhD and M.A. in economics from the University of Michigan and a B.A. in mathematics and economics from Kansas State University. Sam also has a B.A. in mathematics and economics, as well as an MSc in International Trade, Finance and Development. So, needless to say, we were in good hands!
Alison described three primary aspects that they focus on at the Denver Branch: research, policy, and outreach. The research they do is mainly applied microeconomics for the region overseen by the Denver Branch. Policy refers to the briefings they give to internal parties. Outreach is achieved through the many speeches presented to local business and groups. These speeches allow the public to stay informed on what's going on in the regional economy, and also help them understand the Fed's policies. Alison explained that these speeches give her a chance to get feedback from business owners about the local economies. She said that although she loves data, it only reflects past events, and to get an accurate picture of the economy, you also need to try to look forward, which they achieve using information from feedback they receive during these speeches and also from surveys. Sam described his daily roles as collecting and analyzing data, preparing presentations, and keeping the Fed's databook current. The economists also co-author the Rocky Mountain Economist, with is a quarterly publication that covers topics relevant to Colorado, Wyoming, and New Mexico, such as the energy sector and housing markets in these states.
In the Q&A portion, there was some lively discussion between the students and economists regarding unemployment and inflation, and they also gladly answered some general education/career questions that we had. Their advice:
Know how to communicate effectively; be comfortable with both written and oral presentations.
Build your network, and be willing to help each other out.
Overall the tour was really cool! Both of their positions sounded really interesting, and I think the Economics Department at Mines could definitely prepare us for this type of career!
May 13, 2015
Written by: John Bernazzani, class of 2017
Today we stopped by CoBank’s headquarters in Greenwood Village. CoBank is one of the largest cooperative and agriculture credit banks in the U.S. with over $100 billion in assets. The bank lends primarily to agribusinesses and utility companies with a focus on growing rural America. Not only is CoBank one of the most successful banks in the country, but they also help contribute to the economic growth of some of our key industries. In 2012, CoBank also donated $2.5 million to the University of Colorado Denver’s “Center for Commodities”. The contribution helped provide scholarships to students learning finance, agribusiness, and co-op related skills.
First off, the office building was impressive, with large, open common areas and an indoor waterfall giving it a very substantial feel. We were led to the conference room where CoBank was kind enough to provide lunch for our group before getting to meet our hosts for the visit. We met Marshall Essig, a Senior Credit Officer, Leonard Sahling, Director of CoBank’s Knowledge Exchange program, and Taylor Gunn, a Senior Economist with Knowledge Exchange (also a CSM Mineral & Energy Economics MS).
We had a very engaging and insightful conversation with Mr. Essig, Mr. Sahling, and Mr. Gunn, and they each walked us through some of the projects they had previously or were currently working on. It was awesome to see how a lot of our areas of study from school were applicable to a real work environment. Some of the topics we talked about included project financing, credit risk analysis, energy demand modeling and forecasting, and what skill sets and traits make a successful economist. Overall, our visit to CoBank was a fun learning experience packed with a lot of useful information and key advice from some of the industry’s best.
May 13, 2015
Written by: David Gonzalez, class of 2016
Today we visited Charles Schwab’s newest Colorado campus in Lone Tree, Colorado. Charles Schwab (NYSE: SCHW) is a leading financial services provider with over $2.5 trillion in client assets. It provides wealth management, securities brokerage, money management and other financial services for individual and institutional investors through its subsidiaries. The 47 acre Lone Tree campus will eventually serve as the consolidated workplace of over 1,900 Denver-area employees, representing the third largest employment city for Charles Schwab. While there we met with Cameron, portfolio manager for one of Schwab’s municipal bond mutual funds and Dennis, the investment manager of capital markets for Schwab Bank. Cameron is a Chartered Financial Analyst (CFA); he explained how economics has a daily effect on his life and career, from his office at the Lone Tree campus to helping him make investment decisions. He spoke to us about his career path from international business and law to his position in the financial services industry. Like Dr. Ian Lange in my recent energy economics course, Cameron emphasized the importance of economists who are able to provide an unbiased view in his business. Dennis graduated from the University of Pennsylvania’s Wharton School of Business with a B.S. in economics and has been with Schwab for over 30 years. He explained how he and his department use econometric models such as time series models and the Monte Carlo simulation method to make investment decisions. He also explained the relationship between the market yield curve, the marginal price curve and convexity using calculus and how the information they provide can be used to make investment decisions. It was interesting to find that Cameron and Dennis both use quantitative, technical, data at Schwab similar to the kind we practice using at Mines to make investment decisions for multi-billion dollar funds. In the end Cameron and Dennis agreed that communication skills like those learned at Mines, where we practice simplifying technical terms for a broader audience, are critical for success in the business world.
May 15, 2015
Written by: Courtney Neumann, class of 2016
Today we visited Xcel Energy. In our first meeting at the beginning of the day, we met with Marta Quintos, Justin Vicars and Ford Brown. Ms. Quintos began the meeting by telling us a little bit about her background. As it turns out, she received her undergraduate degree in economics from Mines in 1998. I was already so thrilled to be at Xcel, but after hearing that she was a Mines alumna I was even more so because she, more than most, actually understands what Mines is like. Then she told us about her job at Xcel. She specializes in load research, which means she is in charge of analyzing the information gathered from customers regarding the electric and/or gas load. The main objectives of this research are to provide reliable demand studies and justify proper allocations of funds within the company.
Demand studies are important for the company because they use this information to make predictions about the future. In order to stick to regulations while also remaining competitive, Xcel must be able to predict whether the demand for electricity will increase or decrease in the following years so they may plan for any changes. This also affects the allocation of funds. Once a prediction about demand has been made, they know how much money they will need to provide this electricity. However, they cannot just ask for money and receive it, no questions asked. They must present the presented funds with a justification as to why they need that specific amount. In both of these cases, Ms. Quintos and Mr. Vicars analyses are extremely important. If their analysis were wrong, Xcel would be in deep trouble.
That being said, Ms. Quintos and Mr. Vicars use many tools, and work with others, to make sure this wouldn’t happen. They use statistical programing, such as SAS, to help calculate random samples from the entire population of customers that will then be used for the load research. Although the creation of models regarding load falls mostly in a statistic category, it is after this that economics is heavily used. In order for Ms. Quintos and Mr. Vicars to analyze this data, she must use her knowledge of macroeconomics and even behavioral economics.
I really enjoyed meeting with Ms. Quintos, especially since one of her current projects is reforming the process by which they analyze load information regarding solar energy. Her economic background is almost even more important here because everything with solar is about to change since the government subside is being phased out. The reason why economics is so important here is because just looking at a statistical graph and predicting a future trend would lead to the wrong conclusion. She has to take this info and incorporate her knowledge of economics and past events in order to begin to make predictions. Since I have an interest in energy, I found this part of her job to be fascinating.
Later in the day we had a less formal meeting with some more employees. Gabrielle Gantos was the first to speak. It was neat to hear her perspective because, even though she works with generation rather than demand, she still heavily relies on econometrics and forecasting. We also met with [insert name] which was great because he was able to give us some insight regarding an ongoing research and development project: battery storage. Battery storage is incredibly important because it could help convert Xcel from forward integration to, if not entirely, at least partial backward integration. A few other energy providers are also researching this so it is very important for Xcel to remain competitive.
Xcel Energy – Trading Floor
May 15, 2015
Written by: Kailin Zhang
Have you ever wondered what a trading floor looks like? We got a precious opportunity during our field session to have a tour at Xcel Energy’s trading floor. You may wonder why an energy firm has a trading floor. The electricity industries are domestically connected and they form a central organized market, so firms that produce extra energy can choose to sell their energy to regions that need more energy due to multiple factors such as weather, shutdowns, and unexpected supply shortfalls. We started the tour by talking to the manager of the trading floor. He gave us a brief introduction about the U.S electricity market and a day to day routine for the trading floor. He explained the there are multiple analysts, including weather analysts, power plant analysts, etc. They are all very important for the operation managers, because the weather will determine the short term demand of electricity, and the price will be justified by industrial analysts to estimate production cost, so they can make decisions whether they buy or sell produced energy from market. We learned that it is extremely intense and exciting to work on trading floor because the whole trading process is very fast paced and short, and it’s changing dramatically day by day. We then went into the trading center for a tour. We saw the electricity data from all regions of United States coming in and renewing in a five minute time interval, and the managers are keeping a continuous attention to these changes so they can adjust their offering prices accordingly. The manager showed us the graph on the screen, that the electricity usage is heavily influenced by time and seasonality. For example, starting from 10AM the electricity consumption in most regions will slowly increase until reaching its peak around 6 in the evening, and higher demand brings higher prices. Then it starts decreasing, so the managers have to communicate with their power plants to slowdown, or even to pause the production of electricity. That also happens with the weather and season, especially with the frequent changing weather pattern in Colorado. That’s why we can see multiple television screens forecasting weather news in the trading office, so the workers can get first- hand information.
There are also two types of biding happening on the trading floor, one bid for real time price, and the other bids based on price a day ahead. With the new technology, the electricity they now produce comes with multiple power sources, including wind, natural gas, oil, and solar. Solar and wind may not be the option with cheapest production cost, but every year Xcel Energy has to produce a required amount of them to meet the legislation requirement as an energy producer. With this tour, we learned a lot about the whole system of United States energy market, and we saw the role of economy in terms of supply and demanding driving the electricity price constantly. Without knowledgeable economic analysts, the trading floor would not be able to make a profit by following the market trend.
May 18, 2015
Written by: Josh Meeks
Today we visited Ponderosa Advisors in downtown Denver to talk about the company’s advisory work in oil and natural gas and how we, as economists, can better develop our skillset for the workforce. We ended up meeting with Sarp Ozkan, Benjamin Nyarko, Holly Graham, and Ryan Duman. Thee of the people we met with were Mines alums! In terms of responsibilities, Mr. Duman works closely in analyzing the profitability of the upstream, production angles of oil and natural gas markets, while Mr. Ozkan deals largely with the post-production, downstream side of oil and natural gas markets. Alternatively Ms. Graham’s work entails mapping out optimization routes for the transport and distribution of oil and natural gas across the world. And finally, Mr. Nyarko deals with the financial side of the business concerned with cash flows over time.
During the visit, we had the opportunity to learn about how the team at Ponderosa Advisors works together to analyze large datasets and consult with clients to forecast the profitability of potential projects. This analysis included such aspects as forecasting future supply and demand projections, setting up zone-specific decline curves, calculating necessary breakeven prices, and searching through massive datasets with complex queries. In fact, depending on the range of the search query, results could even take a number of hours in processing time just as a result of the sheer mass of data!
Moreover the visit to Ponderosa Advisors provided us with very valuable information for advancing our skillsets as economists to improve our success in the workforce beyond college. The first key piece of advice dealt with how to set up an appealing resume. First of all, the top priority in writing a resume lies in drawing out the relevant set of skills required by the position of interest, and then connecting one’s own project and academic experience in utilizing said skills. It then follows that another key part of a successful resume lies in trimming out irrelevant information and job experiences which do not directly tie into the job position at hand, and instead being vivid in one’s description of their application of relevant skills. Of course, networking and keeping in touch with one’s contacts also remains key in getting noticed as a prospective employee.
Further advice from the visit related to self-improvement beyond just the skillset of an economist. Foremost the visit shed new light on the importance of mathematical processing capabilities. More specifically, experience with Excel and basic programming knowledge stood out as key takeaways. Moreover as dependent on job requirements, a level of comfort with working through large, imperfect datasets and otherwise calculating with messy numbers remained highly valued as a skill. On a different note, the importance of being able to work both independently as well as in a group also stood out.
All in all, the visit to Ponderosa Advisors served as a great learning experience for not only getting a feel for economics in real-world scenarios, but also for optimizing how we as students better position ourselves as desirable candidates on the ever-competitive job market.
Governor’s Office of Planning and Budgeting
May 22, 2015
Written by: Sean Coady
On Friday May 22nd, the Division of Economics and Business Field Session took a visit to Colorado’s State Capital to meet with Jason Schrock the Chief Economist for the state of Colorado. Jason Schrock works in the Governor’s Office of State Planning and Budgeting and his primary job function is to look at Colorado’s state economy/revenue and to create forecasting models. Jason also does economic research for both Colorado’s economy as well as for the national economy
The visit was really interesting and everyone there learned a lot about Colorado’s economy and revenue streams. Jason provided a big packet of information regarding the economy of Colorado and in the packet were lots of graphs showing unemployment rates and other measures for the health of the economy. Jason talked about Colorado’s TABOR law which limits the amount of revenue the state of Colorado and collect. Currently for this fiscal year of 2015 there is excess revenue of $216.2 million dollars. Under the law the state is required to refund the money to tax paying citizens. The only way for the state government to keep the excess revenue is to either have a ballot measure in which citizens’ vote for the state government to keep the excess revenue or to have legislation in which it passes the Colorado General Assembly and then have it signed into law by Governor Hickenlooper. Both ways are unpopular politically and it is unlikely for the state to be able to keep the excess revenue.
This visit highly relates to my experience at Mines. The class of Econometrics and the use of a statistical software program called EViews is exactly what Jason uses to create revenue forecasts. Economic models are based on relationships from the past and because of this it is not guaranteed that these relationships will continue into the future. Therefore it is hard to predict exactly what the economy will do, but the models will usually help to forecast the shape of economic trends. The economy is very complex and dynamic and trying to capture the entire economy as a whole is very hard to do.
Overall the visit was very informative and was a great learning experience. The visit with Jason showed more clearly how the skills learned in the classroom can translate to the work place.
Colorado Office of Policy, Research, and Legislative Affairs
May 22, 2015
Written by: Patrick Callahan
The Colorado School of Mines students who are part of the Economics program visited the State Capitol in downtown Denver and met with M.E. Smith, who is the Senior Policy Director of the Policy, Research, and Legislative Affairs within the Governor’s Office. She graduated from the Harvard Kennedy School of Government and was also an instructor at Harvard. Unlike other visits we attended, she encouraged an interactive group discussion and tested our economic knowledge. Bill 15-1316 of Colorado’s State Congress was brought to our attention. The bill is proposing the deregulation of transportation market, specifically taxicab services. The emerging popularity of Uber and Lyft has inspired other individuals to enter into the taxi service market. If the bill is signed, it will allow anyone to provide taxi services to the public. Obviously, the Denver Metro taxicab companies are not in favor of this bill being passed. The bill was composed of multiple microeconomic issues I learned while taking a microeconomics course at Mines. We discussed and analyzed supply and demand of the transportation market, the impact on the policy on the well-being of the local community and its various members, and the negative and positive externalities on all parties involved. After we conversed the details of the bill for an hour, all students had a chance to vote, yay or nay. I was the only one to vote nay regarding the bill. Although our visit at the State Capitol was unorthodox, I believe it was practical because I was able to apply what I have learned in the classroom.
Division of Business and Economics Students to Compete in CFA Research Institute Challenge
Is Charles Schwab a good buy? For the five students from the Division of Economics and Business competing in the 2014-2015 CFA Institute Research Challenge, this question is on their minds. The Research Challenge is a worldwide intercollegiate competition between teams of college students, which is organized by local CFA Institute volunteers. Students will conduct a thorough financial analysis of Charles Schwab, attend an investor presentation, and interview executives from the corporation, in order to prepare and present a research report to finance professionals and Charles Schwab executives at the local competition in January 2015. Seven universities from Colorado will compete for the opportunity to move on to the national completion in Atlanta. The CFA Institute is a global organization of finance professionals, which offers the Chartered Financial Analyst designation and provides continuing education, training, and publications for its members to stay current on developments in the financial industry. The students competing for Mines are: David Gonzalez, Dillon Heywood, Raj Prasad, Kira Powell, and Yee Wei Tan. Teaching Associate Professor Becky Lafrancois will advise the team.