Babson's Peter Cohen Addresses Wellesley Chamber on Wall Street Meltdown
Right now we're in unchartered territory,” said Babson's Peter Cohen, describing what he sees as the “100-year crash.”
The event was the Babson College/Wellesley Bank Business Series at the Wellesley Chamber's Networking Before 9 breakfast held here at Babson.
Cohen who comments frequently on the financial crisis for CNBC, MSNBC, MarketWatch and others, said that flooding the system with money is just the opposite tactic applied during the Great Depression. “This massive federal intervention is unprecedented and harkens back to the New Deal,” said Cohen, “You have to wonder if it will drive up inflation?”
Cohen argues that the breakdown stems from a failure in leadership and a serious loss of confidence and trust. “In government and on Wall St., there was an absence of compelling new ideas,” he said.
“Main Street loses big in the bailout and Wall Street still has a bigger cushion,” maintains Cohen. But families can do something:
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Make sure your bank accounts are FDIC insured. Check online with Yahoo and/or Google Finance to compare your bank with other comparable institutions. A safe bank will be profitable with low loan losses, and a low number of brokered deposits.
When the Wall Street dust settles, Cohen believes a new financial architecture—one that encourages innovation while enforcing honesty—will be critical to any kind of recovery.