Corporate finance executives, along with the rest of the world, have in recent days been caught mumbling a big question: What just happened?
While the immediate answers sounded hyperbolic — perhaps appropriately so — a longer-term answer raises difficult questions for corporate finance executives wondering how to reforecast 2008 budgets while looking ahead to other, more daunting, regulatory changes on the horizon.
The Wall Street Journal, for example, described the federal government's orchestration of Bear Stearns's fire sale to JPMorgan Chase as the culmination of “Ten Days That Changed Capitalism.” In the news coverage that followed, Ed Yardeni was quoted almost as frequently as U.S. Treasury Secretary Henry Paulson and U.S. Federal Reserve Chairman Ben Bernanke. Yardeni, the president of his own investment strategy research firm, was cited in numerous articles in columns for his catchy summation of Paulson and Bernanke's collaboration: “The Government of Last Resort is working with the Lender of Last Resort to shore up the housing and credit markets to avoid Great Depression II.”
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