Depending on your outlook, these are the best of times or the worst of times as far as financial markets are concerned. Stock markets have had a banner year, interest rates remain relatively low, merger activity is running at a feverish pace, and investment bankers are reaping record bonuses for channeling today's abundant capital around the world. And the consensus outlook is for more of the same in the months ahead.

Still, a growing number of voices are warning that this happy state of affairs may not last. At the World Economic Forum in Davos, Switzerland, last month, regulators led by European Central Bank president Jean-Claude Trichet warned that credit spreads appear to be too low and that a proliferation of derivatives makes it difficult to tell where risks really lie in today's markets.

Central bankers, of course, are killjoys by nature, but the idea that today's boom in financial markets contains the seeds of a potential bust is not an entirely new one. In "Ponzi Nation," beginning on page 55, Contributor Edward Chancellor revisits the theories of the late economist Hyman Minsky to put the current market ebullience in perspective. Minsky's central insight was the idea that a reduction in risk engenders fresh risks of its own by making people feel overly confident and encouraging them to take on more debt and place more-speculative bets. As Minsky memorably put it, "Stability is unstable."

Minsky was not a portfolio manager, but it's likely he would have had a thing or two to say about today's extremely low risk premiums, record-breaking leveraged buyouts and proliferation of newfangled financial derivatives.

Today's financial environment presents particularly tough challenges to chief financial officers. These corporate executives are increasingly relied upon to help steer their companies' strategies on everything from mergers and buyouts to the optimal amount of leverage to carry. At the same time, CFOs have to grapple with the nitty-gritty of the raft of regulations devised in the wake of scandals at Enron Corp. and WorldCom earlier this decade. "CFOs are stretched at both ends of the spectrum," says Randall Mays, the finance head at Clear Channel Communications. In "The Toughest Job in Corporate America," starting on page 37, we profile some of the U.S. CFOs, including Mays, who rank as best in the business, according to our annual poll of leading fund managers.