For more on the financial crisis, check outGlobeSt.com's Webinar, "Wall Street In a Freefall—TheWinners and Losers."

|

DALLAS-Can Wall Street meet Main Street and reconcile theirdifferences? New York City economist Dr. Jerry Webman says thefirst step is to make more funding available for credit-worthyhistories so consumers can transport themselves and be strong andbusinesses can grow and pay employees.

|

Webman, senior investment officer and chief economist ofOppenheimerFunds, was the keynote speaker at an investors' luncheonhosted by Dallas-based Brennan Financial Services at the HotelInterContinental in North Dallas. "It's difficult, but not dire. Itwas much worse in the junk bond days of the early 1990s," he toldthe 200 attendees.

|

Webman, addressing the issue on everyone's mind, said thefinancial crisis isn't like the 1930s because this time governmentreacted. "They are trying to create liquidity and trying to createmovement rather than letting it cure itself," he said.

|

Today's House of Representatives' vote on the $700-billion rescuepackage, still viewed as a bailout in some circles, couldpoint the country in the right direction if it's approved, but it'sgoing to be costly and not an overnight panacea. "I think thecountry is in for a very tough time for the rest of this year andinto next year," Webman said. The upshot is the rescue plan isgoing to be negative for the dollar, force the government to borrowand leave a debt-ridden legacy for future generations.

|

"The reason I'm not so pessimistic about the dollar is the restof the world is slowing too," Webman said. "They will have to pushdown interest rates faster than the US."

|

Webman told GlobeSt.com that commercial real estate's savinggrace in the midst of the debacle is that the industry didn'toverbuild this time as it did in other down cycles. The problem, asthe industry's aware, is the ability to finance either rolling debtor start new projects. "In the short term, it could be verydifficult, but in the long term it will work out," he said. "Youmight see a dampening of the cycle because of the lack of access toborrowing."

|

Webman advised investments in healthcare and technology, whichhe predicted will lead the US out of the financial crisis. Thecaveat is to invest in "innovation-driven earnings" and notborrowed-driven earnings, he added.

|

In the world of dollars and cents, sense needs to prevail."Let's not be greedy about yield," he said. "Being greedy aboutyield is part of what got us into the problem we're in rightnow."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.