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Remember days of yore--when an MBA in finance accepted an offer from an investment bank, commercial bank, brokerage house, trading firm or insurance company in the spring of second year and thereafter embarked on a long career with one firm, one employer?  Shortly after arriving at the firm, the MBA started a training program or entry position--with the expectations of earning promotions every few years and with sights on becoming a senior manager (at the same firm) at the apex of a productive, memorable career. In those days, you had the luxury of failing or slipping up in performance (a few times, not often), as long as you showed drive, loyalty, commitment and some promise. Now and then, you could fail to win a deal, could lose a major client, or could report a decline in revenues. You were reprimanded slightly, gently coached, and learned from experience. You were confident you would get a second chance, and you envisioned a career lasting, oh, 15, 20 or more years. What happen...

The Federal Reserve said yesterday that it will shuffle $400 billion of its portfolio to try to drive down long-term interest rates and get the economy going. Is it going to work? I seriously doubt it! The current economic situation is lack of confidence in the economy, in the government, and in the Euro debt crisis. Yields on U.S. government debt were already among the lowest on record, and investors drove them down further after the Fed announcement. The yield on the 10-year Treasury note, an indicator for mortgages and other long-term loans, closed at 1.86 percent, down from 1.93 percent the day before and the lowest since at least 1962. The US interest rate is already low, by lowering further won't make much difference. If you look at Japan as an example, you will know this is not going to work for the American. Focus on the revenue There are actually two sides of the equation here that most economists do not see, the revenue side and the spending side that can drive the...

Summer, 2011 , has marked a rambunctious time of swirls and volatility in equity markets. It feels like 2008 all over again. Can you stomach it? No, you can't stand it. Nor can you explain it, follow it, track it, quantify it or tolerate it.  A day when equity markets slide 2, 3 or 4 percent is followed by days when they surge, soar or promise that a new bull market is around the corner. And then comes the nose-dive again, another day when selling begets more selling, which contributes to panic and wonder. It churns the inside. Can the old finance texts explain it? Can market watchers and pundits project it? Many think they do.  Do hedge funds and high-frequency traders profit from it? Certainly they try. Are hedge funds and high-frequency traders responsible for it? They certainly contribute to it. Do technical trend-followers try to quantify it or forecast it? Yes, when they unveil graphs, present variance analyses, or analyze "VIX" (market-vo...

After the great depression, in 1936, John Maynard Keynes argued that should the government play a significant role to steer the economy out of recession through public spending, they would not have had a prolonged recession. In Keynes' 1936 article, "The General Theory of Employment, Interest and Money", he argued that the solution to the Great Depression was to stimulate the economy through public spending such as government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a series of chain reactions, whose total increase in economic activity is a multiple of the original investment. This is a wonderful concept and many politician applied this economic model through "stimulus packages" during the recent financial crisis, Barrack Obama for one is...

Secular bull market may lasts for decades. If you buy gold in 2001 and hold till 2011, the appreciation is 700% in 10 years! This is not much compared to the gold bubble in 1980. If you buy and hold gold from 1976 to 1980, your gain would be 850% as the gold price rose from $100 to 850 per oz within 4 years time. However, we must acknowledge that any market operates with bulls and bears. From the above gold chart, after the crash in 1980, the gold market was in a secular bear for 20 years! What drives gold price? Besides the demand and supply, gold is a barometer for inflation, global currency devaluation or simply put, the public confidence of the state of the economy. In general, when people have lose confidence with their currencies due to over printing of money or inflation, paper money depreciates and many would turn to assets such as stocks, properties and of course gold and silver! How far the gold price goes depends on people's expectations, politics, economic condition, wa...

Does investment banking still have the same attraction? Do MBA students  still swarm toward investment-banking roles? Do many have dreams of joining a top firm, hitting the ground running doing deals and anticipating big year-end bonuses? After the industry turmoil and a series of setbacks and embarrassments, is investment banking still a hot area? There have been upheaval, backlash and calls for reform since Lehman Brothers and Bear Stearns disappeared from the scene. Yet since 2008, trends suggest (a) i-banking is still attractive to many MBA students in finance at top schools and (b) the industry has evolved, but not yet gone through the major overhaul and transformation many predicted or hoped for. Despite public pleas for changes in how banks conduct business and pay bankers and despite sluggish economic recovery and stomach-churning markets, deals are getting done. Companies are going public, issuing long-term debt, or acquiring other companies. Not necessa...