Is The Fed Responsible For The Chaos At Uber?

Uber is awash in easy cash.  Private investors have pumped money into the company on increasingly generous terms with surprisingly few constraints for years.  Why?  Because with real interest rates so low and monetary policy so loose, they were reaching for return anywhere they hoped  they could to find it.

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Uber

In this respect, Uber is not alone.  Snap was able to go public on terms that gave shareholders remarkably few rights.  The values of major tech stocks like Google, Apple, Facebook, Netflix and Amazon have all soared to record highs.  In such an environment, one fears another "Minsky moment."  It is time for the Fed to change course.  It is reassuring to see that Janet Yellen is apparently thinking the same way.

 



About the Author

Brad Cornell
Bradford Cornell is a emeritus Professor of Financial Economics at the Anderson School of Management at UCLA. Prof. Cornell has taught courses on Applied Corporate Finance, Investment Banking, and Corporate Valuation. Professor Cornell received his Masters degree in Statistics and his PhD in Financial Economics from Stanford University. In his academic capacity, Professor Cornell has published more than 125 articles on a wide variety of topics in applied finance, particularly empirical analysis of asset pricing models. He is also the author of Corporate Valuation: Tools for Effective Appraisal and Decision Making, published by Business One Irwin, The Equity Risk Premium and the Long-Run Future of the Stock Market, published by John Wiley and Conceptual Foundations of Investing published by John Wiley. He is a past Director and Vice-President of the Western Finance Association and a past Director of the American Finance Association. As a consultant, Professor Cornell has provided testimony and expert analysis in some of the largest and most widely publicized finance related cases in the United States. Among his clients are: AT&T, Berkshire Hathaway, Bristol-Myers, Citigroup, Credit Suisse, General Motors, Goldman Sachs, Merck, Microsoft, Morgan Stanley, Orange County CA, Price Waterhouse, Verizon, Walt Disney and various agencies of the United States Government. Professor Cornell is also a senior advisor to Rayliant Global Investors and to the Cornell Capital Group. In both capacities, he provides advice on fundamental investment valuation. In his free time Prof. Cornell enjoys cycling and golf.