Silver as an investment

William Janeway: Bullish on Bubbles, Bearish on IPO’s, and Bust’n on Carried Interest

from CapitalAccount

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Welcome to Capital Account. It has been almost a month since the election, yet the Fiscal Cliff continues to drive the news cycle and Washington politics. Meanwhile, the Wall Street Journal reports the threat of falling off the Cliff has pushed up US IPOs, stock sales, and mergers, as sellers fear taxes on investment gains could increase next year. Despite efforts to promote small business investment and IPOs, funding from venture capital firms has decreased and the number of companies going public is down significantly from the highs in the 1990s. Might we need the IPO levels of the 90s or an IPO bubble to jumpstart the economy? Bubbles often receive bad press, especially because many cases the value generated by the speculative economic excess is minimal, from tulip bulbs to housing and real estate. We talk to private equity advisor William Janeway about the role of speculation and bubbles in the economy; he tells us why not all bubbles are bad.

Plus, US corporate profits hit a record high in Q3 of 2012, according to the Bureau of Economic Analysis. With these record profits, why do we not see more business investment fueling innovation? We talk to William Janeway, Senior Advisor for Warburg Pincus Technology and author of “Doing Capitalism in the Innovation Economy,” about the role of venture capital and government in business development.

And we hear about sovereign credit downgrades in the wake of a debt crisis, but now extravagance and luxury are on the line. The ratings agency Moody’s has put car maker Aston Martin on review for a debt downgrade. Lauren and Demetri discuss the luxury car market in today’s “Loose Change.” Plus lauren responds to your comments in Viewer Feedback.