Thursday, May 10, 2012

Dodd Frank Bill - A Year and a Half Later

The Dodd-Frank Wall Street Reform and Consumer Protection Act passed on July 21, 2010 has resulted in sweeping changes to the financial industry not seen since the financial reforms enacted after the Great Depression. It is estimated that the bill will result in nearly 400 rules and 87 studies before it is fully implemented.1 Although the bill will affect all financial institutions, its impact on hedge funds is notable because these private funds have generally been able to claim exemptions to the four major regulations imposed in the 1930s.
This thought paper seeks the opinions of hedge fund managers on The Dodd-Frank Wall Street Reform and Consumer Protection Act, its impact on their organization and the future of the hedge fund industry.
Please click on FULLSCREEN below to read the article or click on the link below to downlaod the pdf file.

Dodd_Frank_hi Resolution April 16 2012

Wednesday, February 8, 2012

FRANK ZARB - The Most Important Public Policy Failure of our Time - Energy

(Speech given at the University Club, New York, Jan. 25, 2012)

During the next 20 minutes, we will talk about America’s inability to develop a cohesive thoughtful energy policy despite the fact that we have urgently needed one for decades. But the over-arching question to consider today as we contemplate energy policy is this.
Is it possible to reform our democracy so that it will be able to deliver long-term policies that benefit the national interest in the face of short-term political pain? The answer to that uncomfortable question is at the crux of almost all of the difficult policy matters this country faces.
Using energy policy to frame the question is natural. How we use energy, where we get it, how we pay for it – all drive our economic policy, both domestically and internationally. Energy shapes our global alliances and impacts our national security.
My own experiences in energy policy, began almost four decades ago, may provide useful color. Some of you may remember that in 1973, the Arab members of the Organization of the Petroleum Exporting Countries (OPEC) organized an oil embargo on the United States.

As a direct result our GDP dropped an estimated $15 billion – a big number back then. 500 thousand workers lost their jobs - also a big number in 1974. Hospitals ran out of fuel oil.  And the federal government actually took control of our ability to buy gasoline and heat our homes.
In 1973, the Unites States imported 35% of the oil it used. Today, it is closer to 60%. That’s over $400 billion leaving our country every year to buy oil from foreign sources – most of it flowing to the Middle East.
The impact of a major oil disruption to our economy and our national security today is unthinkable – but it can happen. So …
How can it be that since 1973, we have done so little to retard our exposure to oil imports from questionable areas of the world, and so little to regain some of the leverage we cede to those who may not have our best interests at heart? Here is a little history.

Wednesday, November 23, 2011


George J. Papaioannou
Zarb School of Business, Hofstra University

When in May 2010, the Greek government agreed to a bailout plan drawn by the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Union (EU) – also nicknamed Troika – it was expected that by 2012 the government budget would show a small positive primary surplus, the GDP would start to grow again and Greece would have returned to the public debt markets.  With the year 2012 almost upon us, none of these expectations seem realizable.  GDP is expected to decline in 2012 and Greece is not expected to return to the debt markets before 2020.  The government’s recent projections show a small primary surplus but its realization is precarious.  Debt has risen from 127% of GDP in 2009 to over 160% at the end of 2011 and is projected to stay way above the original projections in the Medium Term Fiscal Strategy (MTFS) unless there is a severe restructuring plan. 

So the question is: what went wrong?  A case can be made that the expectations were overoptimistic and the medicine prescribed to Greece was too strong.  Common to both explanations was the reliance on a set of assumptions that were not present in the case of the Greek economy and, more critically, the case of Greek politics and socio-economic culture.