Skip to main content

Secondary navigation:

Awards and appointments

June 2015

Experts share perspectives at 10th Annual Finance Conference

By Jane Dornbusch

 

The global economy is more interconnected today than ever, and Americans cannot afford to consider pressing issues in isolation. That consensus emerged at the Carroll School of Management’s 10th Annual Finance Conference June 3 and 4, when a slate of prominent speakers and panelists—Nicholas Burns ’78, Niall Ferguson, Larry Kudlow, and Peter Lynch ’65, among others—repeatedly raised questions and concerns about our country’s relationship with China, its reactions to crises in Russia, and our responses to shifts in the global energy marketplace.

file
Niall Ferguson

Niall Ferguson, Harvard historian and author, kicked off the day with a keynote talk on “divergent” forces that are shaping the world in 2015. Ferguson pointed to four vital international spheres in which he sees divergence at work: The first is the monetary arena, where the gradual approach of the “taperers” squares off against those who favor quantitative easing. The second is in the realm of energy, where low oil prices are making tension between importers and exporters particularly divisive. Ferguson expressed particular concern about the sphere of politics, warning those in attendance about “50-50 democracies.” In his view, close elections yield weak governments that struggle to stand up to autocracies such as Russia, which is opportunistically reasserting its strength. The fourth area of divergence is in geopolitics, where weak states face off against strong, borderless international networks. On this point, Ferguson cautioned the audience about the growing Muslim population in the US. “We’re rushing in the direction Europe went 20 years ago,” he said, evoking a near future of “Michiganistans” and “Minnesomalias”—a development he insists is possible. “The biggest challenge I face,” Ferguson said, “is convincing others that the US has anything to learn from other countries.” (View video of Ferguson's talk.)

file
Peter Lynch

Ferguson’s keynote was followed by an hour-long “Fundamentals of Investing” session with Peter Lynch ’65, HON ’95, P ’01, vice chairman of Fidelity Management & Research Company. Lynch shared some of his time-tested investment wisdom (“know what you own”) and debunked a few investment truisms, noting that stocks don’t always come back, buying cheap is not a winning strategy, and owning conservative stocks shouldn’t breed complacency.

file
James E. Walker III, Jeffrey R. Currie, Domenic J. “Nick” Dell'Osso Jr., Claire Farley

 

A well-attended panel on “Energy Markets: What’s Next?” followed, focusing on the consequences of improved shale oil extraction technologies that have substantially increased domestic production and altered the global energy hierarchy. Under the “new oil order,”  low oil prices have changed the energy landscape. But as panel moderator James E. Walker III ’84, P ’18 of Fir Tree Partners pointed out, “the energy market is not a great distressed opportunity—yet.” Responding to an audience member’s question about whether today’s market represents a “new normal,” panelist Claire Farley, a member in KKR’s Energy & Infrastructure business, said that “it’s too early to say what the new normal is. We’re in the midst of seeing how the players behave, including capital markets.” (View video of the panel discussion.)

file
Larry Kudlow

Economist and CNBC contributor Larry Kudlow delivered the day’s second keynote address, giving the economy a mixed report card. “Economically, the US is not heading for Armageddon,” he said, but neither are we aiming as high as we should: “We have done better and we can do better.” He added that a lack of optimism and an aversion to risk hinder progress. “If I sat down with the right people,” Kudlow said, “I could fix the economy in 25 minutes.” His recipe for success includes increasing fracking, freezing the minimum wage, and putting an end to “bank bashing.” (View video of Kudlow's talk.)

file
Nicholas Burns

Harvard Kennedy School of Government Professor Nicholas Burns ’78 concluded the conference, describing the world in 2015 as “the most complex global environment that most of us have faced in our lifetime.” Burns, who spent years as a foreign service officer and diplomat, stressed three global concerns: Putin’s assault on Crimea, the deterioration of the Middle East, and the US’s relationship with China. All three issues, he emphasized, can be addressed—as long as America remains engaged. “The problems we face are truly global,” Burns said. “For the first time in history, the whole globe is linked. We have to be outward looking. We can’t retreat into fortress America.” (View video of Burns's talk.)