Marshall Blume - Faculty Research in Knowledge@Wharton

Obama's Regulatory Plan: Too Hot, Too Cold, or Just Right?

Wed, 24 Jun 2009 16:27:19 EST

Five months into his administration, President Barack Obama on June 17 unveiled his complex, sweeping financial proposals to create a "21^st century regulatory framework" for the U.S. The proposed regulations give the Federal Reserve more power to watch over Wall Street and also create a new agency to curb abuses by mortgage and credit card lenders. Wharton professors and other experts say that while the new framework does not hamper financial innovation, it is also "too timid" and fails to address serious problems.

Reforming the Ratings Agencies: Will the U.S. Follow Europe's Tougher Rules?

Wed, 27 May 2009 17:04:13 EST

New restrictions proposed for ratings agencies -- including Moody's, Fitch and Standard & Poor's -- could have unintended consequences, warn experts in the United States. Europe, however, has clamped down on the agencies, whose stamps of approval on a broad spectrum of subprime mortgage securities helped pave the way to the credit crash of 2007 and the continuing global recession.

Deflation Fears: Could Falling Prices Let the Air Out of a Recovery?

Wed, 13 May 2009 16:53:27 EST

Experts are far from unanimous on the question, with some arguing that deflation could be widespread, while others insist an economic rebound and government stimulus efforts make deflation less likely. Some fear that a stimulus-driven recovery could trigger the opposite: inflation.

Why Economists Failed to Predict the Financial Crisis

Wed, 13 May 2009 16:53:27 EST

A sense that they failed to see the financial crisis brewing has led to soul searching among many economists. While some did warn that home prices were forming a bubble, others confess to a widespread failure to predict the damage the bubble would cause when it burst. Some economists are harsher, arguing that a free-market bias in the profession, coupled with outmoded and simplistic analytical tools, blinded many of their colleagues to the danger. A recent paper from a conference of economists calls for changes in the way they are trained.

The $2 Trillion Question: Will Investors Buy the Government's Toxic Asset Plan?

Wed, 01 Apr 2009 17:13:39 EST

The Obama administration aims to move $2 trillion in toxic assets off financial institutions' books by offering taxpayer-backed loans to hedge funds and other investors, trying to improve on earlier strategies that have failed to rekindle trading in securities backed by mortgages and other debt. The goal is to thaw the credit markets -- to get banks to lend money the economy needs to grow. Will it work? Experts have mixed views.

Are 'Mark-to-market' Accounting Rules on the Mark?

Wed, 01 Apr 2009 17:13:39 EST

On April 2, the Financial Accounting Standards Board is expected to vote on a proposal to relax a standard at the heart of the financial crisis -- mark-to-market accounting rules that require toxic assets to be carried on companies' books at fire-sale prices, based on recent trades of similar assets for far less than they would command in normal times. Many big banks say the crisis has been made worse by these rules. Not everyone agrees.

The Other Banking Drama: Those Secret Swiss Accounts

Wed, 04 Mar 2009 14:25:43 EST

Tax authorities in the United States have challenged long-standing Swiss banking secrecy laws, demanding that UBS AG release the names of 52,000 Americans suspected of opening secret accounts to evade taxes. The bank agreed to release client information on 250 U.S. citizens and pay a $780 million fine as part of a settlement, but that decision has put the entire Swiss banking system in jeopardy, according to Wharton faculty.

The Financial Crisis: Bad and Getting Worse, but Put Away that D-word

Wed, 21 Jan 2009 16:32:55 EST

It began as the "subprime crisis" in 2007, and then mushroomed into a full-blown global recession in 2008. And still, despite mammoth government intervention, the bad news keeps getting worse. Are we now teetering on a precipice, ready to plunge into another Great Depression? Can the latest proposals pull the economy out of its nosedive? There is plenty to worry about. But while many experts say this crisis is the worst since the Depression, that doesn't mean it will be as bad.

Getting It Right: Making the Most of an Opportunity to Update Market Regulation

Wed, 21 Jan 2009 16:32:55 EST

As the global economic crisis continues, politicians and investors are escalating calls for new regulatory scrutiny of financial markets. After decades of a cat-and-mouse game between the industry and regulators, Wharton faculty say a dramatic overhaul of the Depression-era regulatory system is needed. At the same time, they warn that meaningful reform will be enormously complex and require long and careful consideration, not a quick fix to appease voters looking to place blame for the meltdown.

Do the SEC's New Rating Agency Rules Have Any Bite?

Wed, 10 Dec 2008 17:25:28 EST

When the Securities and Exchange Commission approved tighter regulations for credit rating agencies on December 3, the new rules were applauded by the agencies -- whose positive reviews of subprime securitizations contributed to the credit crisis. But reform advocates were disappointed. The changes fell far short of remedies initially proposed by the SEC in June and endorsed by the Financial Economists Roundtable, a group of top economists that includes several Wharton professors. By omitting two critical elements of the June proposal, the SEC pulled the teeth that would have made regulations effective, according to the FER.

The G-20 Economic Summit: More Symbolic than Substantive?

Wed, 12 Nov 2008 15:45:28 EST

It seems sensible: Bring leaders of the 20 largest economies together to discuss a coordinated plan for dealing with the world financial crisis. But the upcoming G-20 Economic Summit in Washington, D.C., has some commentators wondering what can be accomplished with so little preparation time, while others express concern about the formation of any new regulations when the causes of the crisis are still not thoroughly understood. Wharton faculty and other experts discuss some potential outcomes of the November 15 gathering.

A Billion Here, A Trillion There: Calculating the Cost of Wall Street's Rescue

Wed, 29 Oct 2008 13:34:46 EST

How will the U.S. pay for its plans to prop up the financial sector? Answer: by borrowing -- raising worries about how the country's ballooning annual budget deficits and aggregating debt will affect the economy and financial markets. Some guidelines, such as interest rates and the ratio of debt and deficits to gross domestic product, suggest the new debt will be digested easily. But some experts think those guidelines are misleading, warning that obligations are piling up like tinder on a forest floor.

How the Credit Crisis Could Forge a New Financial Order

Wed, 15 Oct 2008 16:48:07 EST

As officials worldwide scrambled to contain the spreading financial virus, hopes are rising that the latest government plans to purchase equity stakes in banks may finally offer the right medicine. And with the patient showing intermittent signs of improving, thoughts turn towards next steps, including new restrictions on the markets. In addition, expect individuals and business to have a tougher time getting loans for years -- not just months. And watch for authorities to prescribe greater transparency, stricter capital requirements to reduce leveraging, and more standardized financial contracts to push opaque securities into the sunlight.

Does Short-selling Need the SEC's Oversight?

Wed, 23 Jul 2008 13:40:28 EST

"There's really nothing illegal about it" is a phrase often heard in descriptions of the practice of shorting, or short-selling, which are essentially bets that a stock price will decline. But after some market watchers accused short-sellers of unfairly depressing the stock prices of several key financial institutions, the Securities and Exchange Commission imposed new rules. Wharton finance professors Marshall Blume and Franklin Allen suggest the impact will be minimal.

Credit Crisis Interview: Marshall Blume on the Evolving Marketplace

Fri, 20 Jun 2008 12:29:49 EST

"There was a machine being developed which created just a fantastic amount of ... junk," says Wharton finance professor Marshall Blume. "At some point, that all had to explode." Blume is one of seven Wharton professors interviewed by Knowledge@Wharton for this special report on the credit crisis.

Subprime Crisis: Could New Rules Avert Another Credit Crisis? Perhaps, but Be Wary

Fri, 20 Jun 2008 12:30:17 EST

An unusual alignment of economic conditions -- and some very careless and risky bets -- triggered the meltdown. Should regulators step in to prevent a repeat? Should the government rescue the wounded? Experts say some new rules may be in order, but the details will be important. A concern: Bailouts may encourage risky behavior.

Market Manipulation, or Just Business as Usual?

Wed, 02 Apr 2008 17:52:07 EST

The financial markets are in turmoil. Inflation is picking up. Home prices are falling. More companies are laying off workers. Oil prices are sky-high. It's getting harder and harder to borrow money. It seems like a nest of conspirators is preying on America. Even Washington is reinforcing the impression with talk of sweeping reforms to the system of economic oversight. Indeed, economic commentator Ben Stein has promoted the notion of market manipulation from the shadows, largely in the form of hedge funds. Yet Wharton faculty reject that idea, saying instead that the market is suffering a hangover from the easy-money excesses of recent years.

ETFs Evolve -- For Better or Worse?

Wed, 19 Mar 2008 15:05:04 EST

With their low fees, all-day trading and tax efficiency, exchange-traded funds have captivated investors. There were no ETFs before 1993; today, there are nearly 700. While most experts think ETFs were a good innovation -- built like index-style mutual funds but traded like stocks -- some worry that the increasingly specialized ETFs introduced in recent years stray from the faith, encouraging too much risk-taking. That concern is heightened by recent Securities and Exchange Commission proposals to let new funds come to market with less oversight, and to invite proposals for introducing actively managed ETFs. Knowledge@Wharton looks at the recent action, and angst, surrounding ETFs.

Good, Bad or Ugly --Is It Impossible to Predict What's Ahead for the U.S. Economy?

Wed, 14 Nov 2007 15:21:26 EST

At the end of October, the Federal Reserve gave the financial markets just what they had been asking for: a 0.25% cut in the federal funds rate. But in early November, stocks plunged and the dollar hit a new low. Applause turned into hand-wringing -- then back to applause as the markets rebounded in the middle of the month. Why can't the experts make up their minds? Is the outlook good or bad? According to Wharton faculty, forecasting is particularly hard now because some of the key factors -- such as the credit crunch arising from the subprime mortgage mess, spiking oil prices and the plunging dollar -- have little historical precedent. The result: Finance experts, including the Fed, may not be able to see too far down the road.

Will the SEC's National Market System Stifle the Innovation It Hopes to Promote?

Wed, 04 Apr 2007 15:13:23 EST

In the best possible marketplace, all buyers see the prices asked by all sellers and all sellers see the prices offered by all buyers -- and little guys are treated the same as big ones. The result: competition that insures the most efficient interplay of supply and demand. In theory, it sounds great. And indeed, this is the idea behind the Security and Exchange Commission's push for an integrated stock market called the National Market System, or NMS. But could the best intentions backfire? Wharton finance professor Marshall E. Blume answers that question in a new research paper titled, "Competition and Fragmentation in the Equity Markets: The Effect of Regulation NMS."

Hedge Funds Escape Regulation: Should Investors Be Worried?

Wed, 07 Mar 2007 14:51:20 EST

When the Lilliputians came upon the sleeping Gulliver, they didn't know if he was friendly or hostile, but he was so big it seemed prudent to tie him down. Should the 9,000 hedge funds -- the secretive investment pools controlling $1.4 trillion in assets -- be treated the same way? The President's Working Group on Financial Markets doesn't think so. In a late-February report, the group urged vigilance but concluded that new regulations are not needed. Was this the right decision? Wharton faculty weigh in on the issue.

What's in Your Future(s)? The Merger of the Chicago Exchanges

Wed, 01 Nov 2006 16:20:23 EST

In mid-October, the Chicago Board of Trade agreed to be purchased by the Chicago Mercantile Exchange for about $8 billion, topping a wave of exchange mergers in the U.S. and Europe. Two factors drove the deal: the enormous growth in the use of futures, options and other derivatives to hedge risks and speculate, and the need for economies of scale to compete with exchanges that have grown through mergers. Wharton professors analyze the deal.

How Can Employers Improve Defined Contribution Plans?

Wed, 18 Oct 2006 16:48:45 EST

If 401(k)s and similar plans are the main way Americans invest for retirement, how can employers improve them? By making enrollment automatic, minimizing the use of the employer's stock, expanding the role of annuities and improving employees' financial knowledge, according to a set of recommendations issued by the Financial Economists Roundtable, a group of about 50 prominent economists, including several Wharton faculty members.

'Stale' or 'Sticky' -- What Motivates Late Trading and Market Timing in Mutual Funds?

Wed, 20 Sep 2006 15:51:08 EST

Three years ago, mutual funds were accused of allowing favored customers to engage in late trading and market timing that hurt ordinary investors. The scandal has subsided, but questions remain: Is short-term trading encouraged by the use of out-of-date, or "stale," stock prices in valuing fund shares? And, what remedies will work without penalizing ordinary investors?

May's Market Collapse: What's an Investor to Do?

Wed, 31 May 2006 14:58:22 EST

American investors have poured money into foreign stocks in recent years, lured by the hope of outsized gains. They have been well rewarded in the past 12 months, but in May, markets plummeted around the world. Mutual funds investing in foreign stocks, for example, lost more than 8% in the two weeks ending May 25, although their previous stunning performance left them up nearly 31% for the 12 months ending on that date. The late-May plunge was especially severe in emerging markets. Is this another bubble bursting, the way the tech-stock bubble collapsed several years ago? Wharton professors offer their take on the downturn and its implications for nervous investors.

Why Oil Prices Are Up, and What We Can, and Can't, Do about It

Wed, 03 May 2006 15:49:45 EST

Rising prices for crude oil and gasoline have alarmed many consumers and put President Bush and other U.S. politicians in a position where they feel they have to do something -- anything -- in response, especially in an election year. But members of Wharton's finance department and private-sector economists say it's a good time to look rationally at the reasons for the price hikes and their likely effect on the economy and on energy policy. They also say that as long as the United States continues to rely on oil producers in other parts of the world, high prices and price volatility will be the norm. Bolivian President Evo Morales's decision, announced this week, to nationalize the country's natural gas sector, only underscores that point.

LSE, NYSE, OMX, Nasdaq, Euronext ... Why Stock Exchanges Are Scrambling to Consolidate

Wed, 22 Mar 2006 15:54:43 EST

The Nasdaq Stock Market's offer earlier this month to buy the London Stock Exchange is just the latest step in a long industry-wide evolution that includes consolidation, automation and conversion of privately held exchanges into public ones. Nasdaq is hardly alone in its attempt to expand. Its offer follows an unsuccessful bid for the London exchange by OMX, the Swedish Stock Exchange, in 2000. In recent years, LSE has also rejected bids by Euronext, Deutsche Boerse and Macquarie Bank of Australia. Wharton faculty examine Nasdaq's bid, other possible stock exchange combinations, and the changing role of institutional investors.

Don't Sweat the Inverted Yield Curve: No One Really Knows What It Means

Wed, 25 Jan 2006 15:13:16 EST

Consider the inverted yield curve as the equivalent of an economic bogeyman. It's when the natural order up-ends and short-term interest rates are higher than long-term ones. The Treasury bond yield curve inverted December 27 for the first time in five years. That gave shudders to those who see the phenomenon as a harbinger of recession. And yet, the U.S. economy is strong, and surveys show most forecasters think it will stay that way. So what does the inverted yield curve really mean? Wharton professors offer some perspectives.

What Lies Ahead for the U.S. Economy in 2006

Wed, 08 Feb 2006 16:49:21 EST

The economic growth that the United States enjoyed in 2005 will continue in 2006, as stronger business investment begins to pick up the slack on the part of consumers who will curtail the white-hot spending that has been a key factor in propelling the economy, according to Wharton faculty members and private-sector economists. In addition, these experts say, oil prices will remain high in 2006, but not much higher than they are now, the residential real estate boom will cool and American workers will be forced to deal with a volatile employment market.

New Fed Head Bernanke: Inflation Is Key

Mon, 21 Nov 2005 14:54:32 EST

Ben S. Bernanke is a superb choice to replace Alan Greenspan as chairman of the Federal Reserve, but he will have to demonstrate to financial markets that he is as much an anti-inflation hawk as his predecessor, according to Wharton finance professors and private-sector economists. These observers also say that Bernanke will speak more plainly in explaining Fed actions than Greenspan, whose cryptic, oracular comments became his trademark. Finally, Bernanke is likely to establish and publicly disclose the Fed's specific target, or target range, for the inflation rate -- a policy that Greenspan eschewed but one that is becoming more common among central bankers worldwide.

Exchange Traded Funds: What's the (Big) Deal?

Wed, 05 Oct 2005 16:04:41 EST

Exchange Traded Funds (ETFs) are on a roll: According to Morningstar, a Chicago based provider of independent investment research, 177 ETFs were listed as of August 31 with net assets of $255 billion, compared to 97 in 2002 with net assets of $89 billion. Why are ETFs so popular? Because they provide certain benefits that their mutual fund cousins do not. Like index-style mutual funds, ETFs are baskets of stocks designed to provide diversification and to mirror the performance of an underlying stock market index. Unlike mutual funds, ETFs can be traded throughout the day and can be used in short sales. They also offer some tax advantages over funds. But ETFs can have a downside too, especially if not used responsibly by investors.

A Changing of the Guard at the SEC: Will Corporate America Get a More Sympathetic Ear?

Wed, 13 Jul 2005 15:36:49 EST

During his 28 months as chairman of the Securities and Exchange Commission, William Donaldson turned out to be something of a surprise. A Republican and longtime securities industry insider, Donaldson repeatedly sided with the two Democratic commissioners to push through a series of post-Enron market reforms that irritated Wall Street and corporate America, but were applauded by investors' groups. With Donaldson stepping down June 30, will the regulatory pendulum swing the other way under Christopher Cox, the conservative California Congressman Bush has nominated as the next SEC chairman? And just what kind of legacy is Donaldson leaving?

Hedge Funds Are Growing: Is This Good or Bad?

Wed, 29 Jun 2005 16:12:24 EST

When the ratings agencies downgraded General Motors debt to junk status in early May, a chill shot through the $1 trillion hedge fund industry. How many of these secretive investment pools for the rich and sophisticated would be caught on the wrong side of a GM bond bet? In the end, the GM bond bomb was a dud. Hedge funds were not as exposed as many had thought. But the scare did help fuel the growing debate about hedge funds. Are they a benefit to the financial markets, or a menace? Should they be allowed to continue operating in their free-wheeling style, or should they be reined in by new requirements, such as a move to make them register as investment advisors with the Securities and Exchange Commission?

How the NYSE Merger Will Affect Investors

Wed, 01 Jun 2005 16:49:22 EST

When the stock market has a big day, TV news is sure to show hundreds of agitated men and women in colored jackets yelling to one another on the floor of the New York Stock Exchange. For more than 200 years, trading at the NYSE has used this "open outcry" auction system. "Specialists" representing sellers and those who represent buyers haggle until a deal is done. But on April 20, the exchange agreed to merge with Chicago-based Archipelago Holdings Inc., a trading company that joins buyers with sellers the modern way, inside quietly humming computers that work at light speed. Does this signal the end of the NYSE's human-based system? If it does, should small investors and other outsiders even care?

The Global Impact of Rising Oil Prices

Tue, 10 May 2005 15:56:38 EST

Crude oil hit an all-time high early in April, topping $58 a barrel -- and giving economists and financial-market analysts the shakes. Is an oil shock likely? And, given the enormous demand by China and other rapidly growing economies, is there any chance oil will drift back to comfortable prices in the $30 to $40 range? Knowledge@Wharton, China Knowledge@Wharton, and Universia Knowledge@Wharton interviewed experts in the U.S., China, Spain and Brazil for their perspectives on the impact of high oil prices on the world economy.

The Economic Outlook for 2005

Wed, 12 Jan 2005 15:15:21 EST

Investors, consumers and businesses have had a fair share of concerns in 2004: high fuel prices, less-than-stellar job growth and volatile swings in the stock market, which remains well below the highs set four years ago. But by many measures the year is ending well. Oil prices dropped in December, hiring has picked up, and the Standard & Poor's 500 returned nearly 8% from the start of the year through mid-December. Will the good news continue in 2005? The smart money says the coming year will probably bring decent, but not terrific, gains in economic growth and stock prices, according to four Wharton professors, who nevertheless warn of possible fallout from the deepening federal and current-accounts deficits and the falling dollar.

What's Hot? Stocks Are Not

Wed, 25 Aug 2004 22:18:02 EST

Corporate profits have rebounded handsomely this year, with the typical Standard & Poor’s 500 company reporting earnings gains exceeding 20% for the first half. Why, then, is the stock market in the doldrums? From Dec. 31 through July 27, the S&P 500 was down about 2%, while the Dow Jones Industrial Average was off 4% and the Nasdaq Composite was down 7.6%.

How to Restore Credibility at the NYSE

Wed, 24 Sep 2003 00:00:00 EST

New York Stock Exchange chairman Richard A. Grasso�s controversial $140 million pay package was a flash point that illuminated other issues at the Big Board and could trigger major change, including the possibility of the exchange itself going public. Conflict between the NYSE�s role as a regulator and trading exchange, flaws in the structure of its board, and concerns about whether its specialist-based trading system is fair to investors -- all these issues must be addressed before the 211-year-old exchange can regain its credibility, say Wharton faculty and other experts.

What's Behind the Bond Market Turmoil?

Wed, 30 Jul 2003 00:00:00 EST

Summer is supposed to be an easygoing time, but since vacation season got underway in June the bond market has been anything but laid back. Investors have grappled with steep declines in bond prices, sharply higher interest rates and confusion over the U.S. Federal Reserve's policy. Wharton finance professors and other experts say, however, that it is important to put these developments in perspective. In the months to come, they explain, interest rates will rise, especially if the economy continues to improve.

Has Sarbanes-Oxley Made a Dent in Corporate America's Armor?

Wed, 20 Oct 2004 17:07:42 EST

In the 12 months since it was signed by President Bush, the landmark Sarbanes-Oxley Act has caused U.S. companies to spend heavily on compliance and altered the culture of many boardrooms. But has improved behavior on the part of some companies been inspired by Sarbanes-Oxley, or is it the result of disclosures of wrongdoing at firms like Enron and WorldCom? Wharton faculty members look at the impact � both real and symbolic � of this still controversial legislation.

How Serious Is the Deflation Threat?

Wed, 21 May 2003 00:00:00 EST

Reactions to the Federal Reserve�s recent expression of concern over the possibility of deflation in the world�s biggest economy have ranged from alarm to dismissal. But even the optimism of those who believe the U.S. is not headed for a period of generally falling prices may be dampened by much of the economic data that has followed the Fed�s historic statement.

Do the Wall Street Settlements Sell Some Investors Short?

Wed, 07 May 2003 00:00:00 EST

When a tentative settlement of the two-year-old investigation of Wall Street analysts was announced last December, few market watchers thought it would have much effect on stock prices or make the financial markets substantially safer for small investors. Can investors expect more out of the final deal announced April 28? Wharton faculty and others are skeptical.

U.S.: A Drawn-Out Conflict Will Pound the Economy, Prolong the Slump

Wed, 26 Mar 2003 00:00:00 EST

Initial expectations that the war in Iraq would end quickly drove U.S. stocks up by more than 8% and sparked hopes that the three-year bear market was over. But after a weekend of discouraging news, U.S. stocks have plunged and the dollar had its biggest drop against the euro in eight months. Wharton professor Jeremy Siegel predicts that if the war ends in three or four weeks, as the markets seem to expect it will, stocks could go up by 10%. If not, watch out for more economic troubles, predict Siegel and other Wharton professors.

The Perils of Hedge Fund Regulation

Wed, 26 Feb 2003 00:00:00 EST

To many investors, hedge funds seem like an oasis of positive returns in the current desert-like environment of poor returns. Whether this is true is debatable. But two trends have made the regulation of hedge funds � which so far have been very lightly regulated � a hot topic. One is the increasing availability of hedge fund products to a broader audience than before. The other is the barrage of news reports focused on hedge fund fraud and blowups, which directly or indirectly raise the question: Should hedge funds be regulated? Wharton faculty share their views.

The Economic Outlook for 2003: A Promising Start

Wed, 15 Jan 2003 00:00:00 EST

Last year marked the first time in decades that the U.S. stock market had logged three losing years in a row. Will 2003 be better? So far, the signs are encouraging. The Standard & Poor�s 500 rose nearly 6% in the first nine trading days. Historically, the start of January has been a good indicator of full-year performance, though there have been plenty of exceptions. On the down side, the threat of war, the continuing sluggishness of the economy, excess production capacity and debate over President Bush�s $674 billion tax-cut package hang over the market. In short, hold your applause for a few more months.

How Well Do 401(k) Plans Work, and Who Benefits Most From Them?

Wed, 20 Nov 2002 00:00:00 EST

When Enron collapsed a year ago, thousands of employees� retirement savings were wiped out, sparking quick calls for reform of 401(k) plans. Some changes were put in place earlier this year, others are still being debated in Congress. But now that the smoke of corporate scandals has begun to clear, do problems with 401(k)s still appear as bad as they did last winter? Should the system be left alone, merely tweaked, or overhauled?

What�s Wrong With Spitzer�s Solution to Analyst Bias?

Wed, 06 Nov 2002 00:00:00 EST

New York Attorney General Eliot Spitzer, the Securities and Exchange Commission and about a dozen of the largest Wall Street firms are close to settling on a billion dollar solution to the controversy over analyst bias that has raged since the dot-com meltdown two years ago. But will the settlement really resolve the conflicts of interest that caused some analysts to tout stocks they knew were no good? Is there a better approach that would solve the dilemma of how to pay for research? And, for that matter, is there still an analyst-conflict problem, or has it already been corrected? Experts on the financial markets offer their opinions.

The Deal Drought: IPOs and M&As are Down But Not Out

Wed, 09 Oct 2002 00:00:00 EST

The rate of financial deals has plummeted since the collapse of the late-90s economic boom. IPOs, mergers and venture funding have all seemingly evaporated, and with them thousands of financial industry jobs. But according to a number of observers, you can still find deals if you know where to look.

Corporate Reform Proposals: On the Money or Off-base?

Wed, 17 Jul 2002 00:00:00 EST

Republicans and Democrats are stumbling over each other to show who can be toughest with corporate wrongdoers. The House and Senate have passed competing legislation calling for everything from longer jail terms and statutes of limitations to new accounting rules and oversight boards. Is this the right approach or are different tactics required? Knowledge@Wharton asked five faculty for their opinions.

Corporate Reform Proposals: On the Money Or Off-base?

Wed, 03 Jul 2002 00:00:00 EST

Taming the Renegade Analyst

Wed, 24 Apr 2002 00:00:00 EST

Critics have complained for years that Wall Street analysts don�t provide the honest �buy� and �sell� recommendations their customers expect. But now the controversy appears headed for a legal showdown that could force change at big securities firms, thanks to a set of startling e-mails recently made public in an investigation of brokerage giant Merrill Lynch. So far, however, there are differences of opinion as to what those changes should be and whether they will ever be adopted.

Global Securities Markets Present Tough Challenges for Investors and Regulators

Wed, 16 Jan 2002 00:00:00 EST

Securities markets worldwide have been on a roller-coaster ride after the bursting of the dot-com bubble and Enron�s meltdown. Moreover, technology and globalization are breaking down old market structures and creating new virtual ones. How will investors and regulators deal with these challenges? Wharton�s Financial Institutions Center and the Brookings Institution organized a conference last week in Washington D.C. on �The Future of Securities Markets� to discuss these issues and more.

Japan�s Economic Outlook Remains Gloomy But Opportunities Exist for Investors

Wed, 10 Oct 2001 00:00:00 EST

Japan�s stock market - and its economy - have been in a dismal state since the beginning of the 1990s. The Sept. 11 terrorist attacks in New York and Washington made matters worse, pushing the country into what analysts say is Japan�s fourth recession in a decade. But Wharton faculty and outside market analysts add that some sectors of the Japanese economy should be attractive for long-term investors.

Stock Exchanges in the Market for Partners

Wed, 07 Jun 2000 15:48:03 EST

In Europe, Asia and the United States over the past few months, stock exchanges large and small have either proposed merging, announced alliances or held conversations with prospective partners. Exchanges are seeking, among other things, to increase their capabilities and to fend off increasing pressure from electronic communications networks. Wharton scholars analyze the regulatory, financial and technical issues involved in this scramble for new alliances.

Stock Market Whiplash: How Bad is the Burn?

Wed, 26 Apr 2000 13:34:19 EST

The movement of stocks in the past few weeks, especially that of the NASDAQ Composite Index, has been so contorted you half expect investors to rush to their doctors complaining of whiplash. The NASDAQ declined more than 25% in five days, a fall that culminated on April 14 with the index�s biggest-ever one-day point plunge. Then, just when it looked like Wall Street�s raging bull had morphed into a vengeful bear, on April 17 and 18, the NASDAQ snapped back with its biggest two-day gain ever. On April 25 and 26, the roller coaster continued, first down then up. To explore the reasons for the volatility and to gauge the outlook for the market, Knowledge@Wharton talked with Wharton finance professors Marshall Blume and Jeremy Siegel, and David Pottruck, president and co-chief executive officer of Charles Schwab.

Greenspan vs. Inflation: A Debate

Tue, 21 Mar 2000 17:03:52 EST

When Alan Greenspan frets, people take notice. The Federal Reserve chairman attracted widespread interest with recent comments about productivity increases being a potential harbinger of inflation. His line of thinking runs thus: Gains in productivity can lead investors to believe that corporate earnings will continue to grow. Stock prices are bid up, thus increasing the �wealth effect.� If people feel they will have more money in the future, they consume more today, and may take on a lot of debt in doing so. If demand outstrips supply, prices can shoot up. Is Greenspan right to be worried? Should the Fed continue to raise rates? Are those high-flying technology stocks headed for a come-uppance? To find out, Knowledge@Wharton interviewed three members of Wharton�s finance department and a well-known investment strategist.