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Opinions and views from expert CFOZone members.

Tag >> bubbles
Aug 19
2010

A better way to boost demand

Posted by Ron F in Riskrecoveryrecessionfinancial market reformfinancial crisisFederal ReserveFedeconomycareer advancementbubblesBanksbank lending

Ron F

Bear with me here. This is going to be one of those "out there" posts. But Steve Randy Waldman takes an interesting stab at a problem I've been wrestling with, at least in the furthest reaches of the financial corner of my brain, since the financial crisis began.

And that is how to stimulate the economy without creating another asset bubble. It sounds easy enough to the Keynesians, but as Waldman has pointed out before, rebooting aggregate demand through traditional government action may simply create another bubble. And ultimately, the distinction between monetary and fiscal policy may be moot.

Jun 02
2010

Why deeper financial reform remains necessary

Posted by Ron F in Volcker Rule, unemployment, Timothy GeithnerRiskrecoveryrecessionPaul VolckerObama AdministrationGeithnerfinancial crisisCongresscompliancebubblesBanksBanking

Ron F

Despite the prospective "success" of financial reform legislation, my sense is that very little will change on Wall Street as the bills passed by the House and Senate are likely to emerge from conference committee. And that will prevent any economic recovery that isn't just another asset bubble in disguise.

The fundamental problem, or at least one such obstacle, as I see it, is that reform as currently likely will do little or nothing to restructure the banking industry, instead leaving it to regulators to impose new rules with which to limit risk.

May 27
2010

Another road to serfdom

Posted by Ron F in Timothy GeithnerRiskrecoveryrecessionObama Administrationjobsglobal economyfinancial crisiseurozoneEuro areaeconomyCareers/ManagementbubblesBanksbank failuresbailoutsalternative energy

Ron F

As a follow-up to yesterday's rant, I see that investors are applauding the moves of European governments to reduce their budget deficits, as if the answer to deflation is more deflation.

Hasn't anyone ever heard of Keynes and the false dawn of 1937?

May 26
2010

Global banks, global problems

Posted by Ron F in unemployment, Riskjoblessnessfinancial crisisFederal ReserveFannie Maeeuropeeconomydemanddebtclimate changeCareers/ManagementbubblesBanksBanking

Ron F

Before I get to the news (which involves the problems of European banks), let me bury the lede and offer up a bit of perspective. Yes, that's totally bass ackwards, but indulge me for a few grafs. (Hey, this is the web.)

We've recently gotten grief from friends here and there about being too negative about the economy. So we've been doing our damndest of late to ensure a "balanced" approach, seeing the glass half full as often as empty, so to speak, or walking on the sunny side of the street in addition to the shady one. You get the picture. Well, sorry, folks, but sometimes reality won't budge.

Apr 27
2010

More hype about a bellwether's results

Posted by Ron F in unemployment, jobsjoblessnesshealth careGeneral ElectricGEemploymenteconomycost reductionconsumer spendingconstructionChinaCareers/ManagementbubblesAccounting

Ron F

By this point, press cheerleading for the economy is hardly newsworthy, and I'm not the first to notice the latest example.

But the down-is-up spin on Caterpillar's results cannot escape mention.  As the Business Insider notes, the Bloomberg story is tame by comparison with the ravings on CNBC yesterday.

Mar 29
2010

What's the deficit for, anyway?

Posted by Ron F in RiskrecoveryrecessionGreenspaneconomyCareers/Managementcapital expendituresbudgetbubbles

Ron F

One last point in connection with last Friday's rant about Alan Greenspan and Jamie Galbraith occurs to me, thanks to an interesting post this morning by Steve Randy Waldman.

The point has to do with investors' concerns about the deficit and their faith, or lack thereof, in the creditworthiness of the US.

Mar 11
2010

A downtick in foreclosures could really reflect the weather

Posted by Ron F in reformrecoveryrecessionmortgage foreclosuresmedia, loan delinquencies, joblessnessfinancial crisisemploymenteconomyCareers/Managementbubbles

Ron F

It seems to me that the crappy weather in February is only cited as an excuse for poor performance, but never an explanation for the opposite.

Yes, this Realtytrac report on foreclosures says they may have fallen last month because notices were late, but that fact wasn't reported today in NPR's coverage this morning.

Jan 23
2010

Bernanke, Geithner headed for the door?

Posted by Ron F in RiskRegulationObama AdministrationGeithnerFederal ReserveFedcompliancebubblesBanksBank of Americabailouts

Ron F

The other day I said that the tea party, for want of a better term, wasn't much fun for Wall Street. Now it looks like Ben Bernanke and Tim Geithner aren't enjoying the aftermath of the Massachusetts special election either.

In fact, there is growing opposition to Bernanke's re-nomination in Congress, as is widely reported, though Bloomberg naturally has stressed the positive here via the go-to source for never-rock-the-boat Democrats, Indiana Senator Evan Bayh.

Dec 15
2009

Wall Street to Obama: We don't want a strong recovery

Posted by Ron F in recoveryrecessionObama Administrationjobseconomybubbles

Ron F

This is the second time in the past two weeks that I've noticed a disconnect between the stock market and the economy.

That is, investors seem to favor a weak recovery. In fact, the market sank after the November unemployment report that was better than expected, when only 11,000 jobs were lost instead of the 125,000 that most economists forecast. Reason: A rebound in the job market would lead to higher wages, and with them would come higher inflation.

Dec 02
2009

Debt rally getting scary

Posted by MQuinn in economydebtbubbles

MQuinn

Good thing Federal Reserve Chairman Ben Bernanke says he's ready to start busting bubbles, because it looks like things are starting to percolate in the debt markets.

I get a little antsy when I hear guys with 40 years of experience in the junk bond markets say things like what Loomis Sayles Bond Fund manager Daniel Fuss told the Wall Street Journal recently: "The inflow of funds has been phenomenal. I have not seen a rally like this, ever, in the high-yield market."



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