Monday, September 15, 2008

Dean of UVa's B School, Robert Bruner, On the Wall Street Crisis

Floyd Norris, Chief Financial Correspondent for The NY Times, is Live Blogging from Wall Street about the current crises facing Lehman Brothers, Merrill Lynch, and A.I.G.

His 10:20 a.m. post quotes our own Robert Bruner, Dean of University of Virginia's Darden School of Business (Dean Bruner is himself a blogger; see link below).

Norris writes:

Robert Bruner, the dean of the Business School at the University of Virginia, is one who did see this coming. His book on the Panic of 1907, published last year, saw parallels between then and now.

When I checked in with him this morning, he sounded like he wanted to be optimistic.

“What we have seen in all previous crises is that the bottom is marked by the collapse or rescue of major institutions that were thought to be beyond the reach of the crisis."

“If this crises follows that, the events of the past 10 days may mark the nadir.”

Yes, but will it follow that pattern? He’s not confident.

“I’ll give you 50-50 odds that this is the bottom. I am concerned about the spread of the crisis offshore, and to other markets. If the crisis is contained, then I think the odds are dramatically improved that this is the bottom.

“But if Russia fails to refinance the debts coming due by the end of the year, if consumers dramatically pull back on their spending, and if corporate investing really pulls back, we’re in for more heavy weather.”

[emphasis ours]


You can access Floyd Norris' blog here.

Robert Bruner's Blog is available here. We're admirers of Mr. Bruner's erudition in general, and find the W.B. Yeats poem, "The Second Coming," which is posted at the top of his blog, particularly apt.

3 comments:

Anonymous said...

Here's the latest from Nouriel Roubini...
http://tinyurl.com/6a4ewf
Not good, not good at all...

Mark said...

I can get banking crisis news in a lot of places. I check this blog for its insights on local housing market, and I love this blog for its discussions of specific area houses.

As the macroeconomic news increases, the local housing info decreases, as does my readership.

Real C'ville - The Bubble Blog said...

Mark,

Appreciate your comment.

Some people *don't* get banking info in a lot of places, which is why we have posts and links about it here.

What's happening nationally has a local impact, especially the historic events of September, with F&F needing rescue and Wall Street imploding.

The Wall Street issues are important to housing because the investments and retirement accounts of lots of 'average joes' are being wiped out in mutual fund collapses...and for house buyers, it's a question of confidence.

We tire quickly of posting about dire financial news, though, which is why we put up the live newsfeeds.

We have a number of posts forthcoming about houses, including continuing the series on price points (what gets a $1M asking, a $5K asking, etc.).