Dean Glenn Hubbard met with students in a town hall meeting on December 2 for a discussion on the state of the U.S. economy and career prospects for MBA students. The forum coincided with news from the National Bureau of Economic Research that the U.S. has been in a recession since last December.
A relatively deep recession will last through the middle of next year, predicted Dean Hubbard. He also discussed actions to bolster the economy, including fixing short-term lending, recapitalizing banks and stabilizing housing prices (see his plan developed with Professor Chris Mayer).
Dean Hubbard also voiced some optimism and pointed to market opportunities, including fixed-income securities. “The most senior secured loans,” he said, “are yielding 17-18%. The refinancing in commercial real estate that is likely to happen will yield huge returns.”
The Dean emphasized that MBAs entering the job market focus on where they want to be in five to seven years. He urged graduates to pursue activities and skills that will gradually advance them up their career ladder.
Looking forward to next year, Dean Hubbard said, “2009 is going to look a lot like 1933.” In that year, a newly elected president Franklin Roosevelt took office in March and enacted a series of government measures which restored, at least temporarily, confidence in the shaken banking system. The year marked the end of a recession that lasted from 1929 to 1933, according to the NBER.