Prof. Nouriel Roubini: The Dollar Joins the Currency Wars

nroubiniIn a recent opinion editorial on Project Syndicate, Professor Nouriel Roubini argued that governments shouldn’t use currency wars to boost economic growth. While many central banks around the world have eased monetary policies to jumpstart growth, the US dollar has simultaneously strengthened against both advanced-country commodity exporters and fragile emerging markets.

However, in his op-ed, Professor Roubini warns of the dangers of the US joining the “currency war” to prevent the dollar’s appreciation:

…the US has effectively joined the “currency war” to prevent further dollar appreciation. Fed officials have started to speak explicitly about the dollar as a factor that affects net exports, inflation, and growth.‎ And the US authorities have become increasingly critical of Germany and the eurozone for adopting policies that weaken the euro while avoiding those – for example, temporary fiscal stimulus and faster wage growth – that boost domestic demand.

…Currency frictions can lead eventually to trade frictions, and currency wars can lead to trade wars. And that could spell trouble for the US as it tries to conclude the mega-regional Trans-Pacific Partnership. Uncertainty about whether the Obama administration can marshal enough votes in Congress to ratify the TPP has now been compounded by proposed legislation that would impose tariff duties on countries that engage in “currency manipulation.” If such a link between trade and currency policy were forced into the TPP, the Asian participants would refuse to join.

To read the entire opinion article on Project Syndicate, please click here.

Professor Roubini’s op ed was also covered by The GuardianLivemintMarketWatch and The Wall Street Journal.

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MSRM Professors to Teach in Upcoming Contemporary Finance Executive Short Course

PGB 190x190In an upcoming five day short course beginning June 1st 2015, MSRM Professors Ingo Walter, Edward Altman, Holger Mueller, Viral Acharya, and Stijn Van Nieuwerburgh will join NYU Stern Professors Aswath Damodaran, David Yermack and Baruch Lev to teach Contemporary Finance: Key Topics for Senior Executives and Board Members. Learn more about the course here.

Regulatory and market developments over the past decade have materially raised the bar on the degree of financial expertise demanded of senior managers and board members. Support of this belief can be found in McKinsey & Company’s recently released interview of ADP’s Jan Siegmund on broader expectations of the finance chief’s role.

Contemporary Finance: Key Topics for Senior Executives and Board Members provides an intensive five-day overview of modern Finance at a level that today must be mastered by senior executives and board members of financial and nonfinancial firms.

In this short course, participants will:

  • Acquire and/or update skills in modern financial diagnostics and their application
  • Understand current dynamics of global financial markets and their strategic impact
  • Gain insight into structured finance and its role in creating and destroying value
  • Learn about the new regulatory environment, and how it is likely to evolve going forward
  • Engage in new thinking and evidence on Finance in corporate restructurings
  • Assess new insights in corporate valuation, failure prediction and the cost of capital

If you are interested in attending Contemporary Finance: Key Topics for Senior Executives and Board Members from June 1 – 5, 2015 (Monday – Friday), there are still a limited number of seats available. Applications are still being accepted and should be submitted here.

Please email with any questions. We hope to see you there!

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Prof. Robert Engle Discusses Recent “Flash Crash” Arrest

rengleIn a recent article on Reuters, Professor Robert Engle shared his perspective on the arrest of Navinder Singh Sarao, a UK trader who is though to be responsible for the 2010 “flash crash.” In this crash on May 6th, 2010, almost $1 trillion was temporarily wiped out from U.S. stock markets in minutes.

However, the five years it took to make an arrest shows the difficulty of finding wrongdoing in such fast-paced markets, and suggests that regulators may not be able to detect or prevent future crashes.

“This will raise concerns about the stability of financial markets,” said Robert Engle, finance professor at New York University’s Stern School of Business. “That this trader could put the markets in a tailspin with actions that are hard to detect is bad news.”

To read the entire article on Reuters, please click here.

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Prof. Ian Bremmer Discusses an Opened Cuba

ianbremmerIn a recent opinion editorial on Time, Global Research Professor Ian Bremmer discussed the economic benefits of opening Cuba to international business. Now that Cuba has been removed from the list of nations that sponsor terrorism, several industries will have more advantages in the opened country.

To begin, Prof. Bremmer explained how better relations with Cuba would increase permitted remittance flows. He also discussed an increase in flights and tourism in the country, as Cuba would be a convenient vacation spot for Americans.

Prof. Bremmer also discussed the advantages of opening Cuba in the telecommunications industry:

Only one in ten Cubans regularly use mobile phones and only one in twenty have uncensored access to the Internet. Even state-restricted Internet penetration currently stands at just 23.2%. The telecom infrastructure is so underdeveloped that an hour of regulated Internet connectivity can cost up to 20% of the average Cuban’s monthly salary. There’s serious demand for the major infrastructure investments needed to improve these numbers.

To read more on the economic benefits of an opened Cuba, please click here.

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Class of 2015 Abu Dhabi Module Featured on NYU Stern Homepage

Discover-Possible_Abu-DhabiNYU recently featured the MSRM Class of 2015′s Global and Sovereign Risk Module in Abu Dhabi on the NYU Stern homepage! The feature, as part of a series titled Tales in Possible, discussed the courses, global location, and guest speakers of the module.

John Heywood, a current student in the Class of 2015, also contributed his thoughts on the module in the Middle East:

“Studying in Abu Dhabi was truly a life changing experience for me,” described MSRM student John Heywood, managing director and board member of Rose Rock Group in California. “Together with my classmates, it was a great privilege to be educated by global thought leaders at NYU’s newest world-class campus combined with a unique opportunity to learn about a new country with its rich culture, history and economic growth.”

To read the entire feature, click here.

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