Archives for: July 2008
07/31/08
07:39:17 pm, by editor of MarketObservation.com 
, 253 words 
Categories: Market research, Market characteristics
The Loan Structure and Housing Tenure Decisions in an Equilibrium Model of Mortgage Choice, Matthew S. Chambers, Carlos Garriga, Don Schlagenhauf, Working Paper 2008-024A, July 2008
Paper abstract:
"The past decade has brought substantial innovatio… more »
Bloomberg: FASB Postpones Off-Balance-Sheet Rule for a Year, July 30, 2008
"The Financial Accounting Standards Board postponed a measure, opposed by Citigroup Inc. and the securities industry, forcing banks to bring off-balance-sheet assets such as mo… more »
Dittmann, Ingolf, Maug, Ernst G. and Schneider, Christoph,Bankers on the Boards of German Firms: What They Do, What They are Worth, and Why They are (Still) There(June 27, 2008). ECGI - Finance Working Paper No. 196/2008, available at SSRN: http://ssrn.c… more »
07/30/08
The Corporate Governance of Benedictine Abbeys: What can Stock Corporations Learn from Monasteries?
By Katja Rost, Emil Inauen, Margit Osterloh and Bruno S. Frey, University of Zurich, June 2008
Paper abstract:
"The corporate governance structure… more »
09:11:03 am, by editor of MarketObservation.com , 74 words
Categories: Global natural Resources Trends, Research
VOX: Why does gasoline cost so much? by Lutz Kilian, July 29, 2008
Gas prices are a product of supply and demand. This column attributes recent gas price increases to stagnant oil supplies and growing global demand from emerging Asian economies – not… more »
07/29/08
FAZ: Freihandel, 40 Minister, neun Tage, null Ergebnis, July 29, 2008
The WTO conference has been terminated after 9 days of negotiations without any result. The 40 ministers have not been able to agree on a compromise. A continuation of the discussio… more »
CalculatedRisk: Case Shiller: House Prices decline in May, July 29, 2008
"S&P/Case-Shiller released their monthly Home Price Indices for May this morning. This includes prices for 20 individual cities, and two composite indices (10 cities and 20… more »
IMF: Global Financial Stability Report: Year After Subprime Crash, Risks Remain Elevated, July 28, 2008
A year after the subprime market crisis erupted in the United States, triggering financial market turmoil around the world, global financial marke… more »
07/28/08
I came across a student who is writing a thesis about the subprime crisis. We had a discussion about the forces which lead to bubbles. We discussed that it would be valuable if he would focus his thesis on the mechanism of how the real estate bubble coul… more »
07/27/08
NYT: Too big to fail, or to Survive by William Poole, July 27, 2008
"There are more general economic reasons for liquidating Fannie and Freddie, the biggest being that it is very dangerous to maintain such a large role in any market for only two opera… more »
An article in Frankfurter Allgemeine Zeitung deals with the behavior of family enterprises and says that such enterprises only perform better than non family controlled businesses as long as the founder is on board. They mention that future generations o… more »
Princeton economics professor A.S.Blinder came up with a creative idea potentially providing both economic stimulus and environmental improvement: "Cash for Clunkers" is his proposition. Cash for Clunkers is a generic name for a variety of programs under… more »
NYT: Congress Sends Housing Relief Bill to Bush, July 27, 2008
Hoping to stretch a safety net under the nation?s tumbling housing market, the Senate on Saturday overwhelmingly approved a huge package of legislation that includes a program to save hu… more »
07/26/08
WSJ: Is It Time to Tiptoe Into Financial Stocks?, July 26, 2008
"This column, named after Benjamin Graham's classic book on value investing, launched only two weeks ago -- and several readers have already asked whether Graham would be loading up on fi… more »
08:00:28 am, by editor of MarketObservation.com, 91 words
Categories: Global natural Resources Trends
Econbrowser: Oil prices and economic fundamentals, July 25,, 2008
"Which price was right, $123, $145, or something else? Before you let anybody give you an answer to that question, try to get them to comment first on the following two facts. (1) Accor… more »
07/25/08
09:47:03 pm, by editor of MarketObservation.com, 140 words
Categories: Global natural Resources Trends
Jeff Frankels Weblog: Commodity Prices: Again are Speculators to Blame?, July 25, 2008
"The evidence does not support the claim that speculation has been the source of, or has exacerbated, the price increases. Indeed, expectations of future prices o… more »
FT: Fannie’s and Freddie’s free lunch by Nobel Prize Winner Joseph Stiglitz, July 24, 2008
"Much has been made in recent years of private/public partnerships. The US government is about to embark on another example of such a partnership, in which the… more »
Bloomberg: Credit Suisse Profit Falls 62%, Beating Estimates, July 24, 2008
"Credit Suisse Group AG, Switzerland's second-biggest bank, said earnings dropped 62 percent, less than analysts estimated, as the securities unit returned to profit and the c… more »
07/24/08
Swissinfo: Gaddafi's revenge riles Swiss press, July 24, 2008
"Libyan "revenge" against Switzerland in response to the detention of Hannibal Gaddafi in Geneva last week is in the spotlight of the Swiss press.
The newspapers have taken the opportunity… more »
Source: Keep Calm Gallery more »
01:25:24 pm, by editor of MarketObservation.com , 146 words
Categories: Global natural Resources Trends
Project Syndicate: Images of Scarcity, Robert J. Shiller, July 2008
"We have seen photographs of hurricane and typhoon activity due to global warming, affecting people in Louisiana or Myanmar. We have seen devastation from the 2004 Indian Ocean tsunam… more »
11:58:17 am, by editor of MarketObservation.com, 95 words
Categories: Global natural Resources Trends
VOX: What’s causing global food price inflation?, July 22, 2008
"New research shows that India, China, and speculators are not the culprits in the food price explosion. Biofuels were a significant element in the 2005-2007 food price surge as they acco… more »
06:48:32 am, by editor of MarketObservation.com, 195 words
Categories: Economics United States, Economics Global
click to go to video
"One of the most noted skeptics on Wall Street, NYU Professor Nouriel Roubini says the financial system is in "the worst crisis since the Great Depression," and that the bear market in stocks is only half over.
Subprime mortg… more »
MarketWatch: House approves housing aid, Fannie-Freddie plan
Senate action expected later this week, July 23, 2008
Capping off a wide-ranging legislative response to the housing crisis, the House of Representatives on Wednesday approved a multibilli… more »
06:11:18 am, by editor of MarketObservation.com , 243 words
Categories: Market research, Market characteristics
Subprime Mortgages: What, Where, and to Whom? Chris Mayer and Karen Pence, Federal Reseve Board, June 2008
2008-29
Paper abstract:
"We explore the types of data used to characterize risky subprime lending and consider the geographic dispersion o… more »
07/22/08
VOX: Housing wealth and consumer spending by John N. Muellbauer, July 20, 2008
"Recent empirical estimates of the housing wealth effect suggest that a UK recession will be hard to avoid. With the housing-wealth decline compounded by falling equity pri… more »
07/21/08
06:55:56 am, by editor of MarketObservation.com , 118 words
Categories: Market research, News, Market characteristics
NYT: Trouble at Fannie Mae and Freddie Mac Stirs Concern Abroad, July 21, 2008
"For more than a decade, Fannie Mae and Freddie Mac, the housing giants that make the American mortgage market run, have attracted overseas investors with a simple pitch:… more »
07/20/08
08:47:14 am, by editor of MarketObservation.com , 18 words
Categories: Economics United States, Economics Asia
Congressional Budget Office (CBO): How Changes in the Value of the Chinese Currency Affect U.S. Imports, July 2008 more »
IMF World Ecnomic Outlook: IMF Gloomy on Growth, Sees Rising Inflation Threat, July 17, 2008
In its updated economic forecast of July 17, 2008, the IMF sees following major trends:
Global economic growth to slow significantly in second half of 200… more »
07/19/08
NYT: New Offshore Bank Limits for U.S. Clients, UBS Says, July 18, 2008
"Faced with a federal investigation into its private banking practices, the Swiss banking giant UBS said on Thursday that it would stop offering offshore banking services to clie… more »
07/18/08
07:13:48 am, by editor of MarketObservation.com , 193 words
Categories: Global natural Resources Trends
Tax Policy for Financing Alternative Energy Equipment, Prof. Gilbert E. Metcalf, Tufts University, 2008
Paper abstract:
"European countries have taken the lead in investing in renewable energy electricity generating capital. While the EU-15 count… more »
Bloomberg: Pakistani Investors Stone Exchange as Stocks Plunge, July 18, 2008
"Pakistan investors stormed out of the Karachi Stock Exchange, smashed windows and cursed regulators after the benchmark index fell for a 15th day, the worst losing streak… more »
07/17/08
EuroIntelligence: Inflation up everywhere, July 17, 2008
"US inflation is now up at 5%, the highest rate of increase in the last 17 years. The price increases during July were 1.1% alone. Frankfurter Allgemeine also has the latest inflation data for e… more »
HousingWire.com: JP Morgan?s Dimon: Prime Mortgages Look ?Terrible?, July 17, 2008
"Our expectation is for the economic environment to continue to be weak ? and to likely get weaker ? and for the capital markets to remain under stress,? he said in a… more »
08:04:44 am, by editor of MarketObservation.com , 193 words
Categories: News, Investment, Banks/Investment Banks
The SEC issued an emergency order on July 15th placing restrictions on the short selling of shares of certain major financial firms.
The SEC's order will require that anyone effecting a short sale in these securities arrange beforehand to borrow the s… more »
07/16/08
Yahoo Finance: Ben Bernanke vs. the Three-Headed Monster, July 15, 2008
"The chairman sees "significant downside risks to the outlook for growth" -- a downgrade from the Fed's June statement -- while at the same time conceded "upside risks to the infl… more »
National Association of Homebuilders: Builder Confidence Declines Further in July, July 16, 2008
"Builder confidence in the market for newly built single-family homes fell for a third consecutive month in July, according to the National Association of… more »
ChairmanBen S. Bernanke, Semiannual Monetary Policy Report to the Congress Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 15, 2008
"In conjunction with the June FOMC meeting, Board members and Reserve Bank presidents… more »
07/15/08
NYT: Funnie/Freddie further follies by Paul Krugman
"The important thing, again, is to understand that Fannie and Freddie weren’t Charles Keating. The moral hazard created by their implicit guarantees was largely, though not entirely, contained by the… more »
07/14/08
The Onion: Recession-Plagued Nation Demands New Bubble To Invest In, July 14, 2009 more »
Bloomberg: Paulson Statement on Freddie Mac, Fannie Mae: Full Text, July 13, 2008
"Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies. Their sup… more »
Board of Governors of the Federal Reserve System: Press Release, Sunday Evening, July 13, 2008
"The Board of Governors of the Federal Reserve System announced Sunday that it has granted the Federal Reserve Bank of New York the authority to lend to Fan… more »
07/13/08
08:41:08 pm, by editor of MarketObservation.com , 196 words
Categories: News, Market characteristics
NYT: Long Protected by Washington, Fannie and Freddie Ballooned, July 13, 2008
"The dominant role Fannie and Freddie play today is no accident. The companies, Wall Street firms, mortgage bankers, real estate agents and Washington lawmakers have buil… more »
Econbrowser: Fannie Mae and Freddie Mac, July 12, 2008
"The overriding concern in dealing with the current mess is that the process of rapid and radical deleveraging would so impede the flow of new credit that the housing price declines, foreclosures,… more »
Definition: Usury is defined as the act of lending money at an unreasonably high interest rate, this rate is defined at the state level. Repayment of loans at a usurious rate makes repayment excessively difficult to impossible for borrowers. This is also… more »
Sunday Times: US Treasury rescue for Fannie Mae and Freddie Mac:
Treasury secretary looks at $15 billion cash injection for crisis-hit mortgage lenders, July 13, 2008
"US treasury secretary Hank Paulson is working on plans to inject up to $15 bill… more »
FAZ: Warum die Finanzkrise und noch lange quält, July 13, 2008
Last Friday market participants feared a collapse of the mortgage banks Fannie Mae and Freddie Mac. The German DAX dropped to the lowest level this year. Saturday night, the collapse of th… more »
07/12/08
click to go to video
"The market has been hit by a one-two punch. The first punch was the credit crunch that started at the end of last year, because of the housing bubble that burst. The second punch, which I think is now a stronger punch are the e… more »
11:30:34 am, by editor of MarketObservation.com , 161 words
Categories: Global natural Resources Trends, Initiatives, Research
The Environmental Performance Index (EPI) ranks 149 countries on 25 indicators tracked across six established policy categories: Environmental Health, Air Pollution, Water Resources, Biodiversity and Habitat, Productive Natural Resources, and Climate Cha… more »
MarketWatch: Latest victim of mortgage crisis, IndyMac taken over, July 11, 2008
IndyMac Bancorp Inc. became the biggest casualty of the subprime mortgage crisis on Friday, as federal regulators shut down the troubled Pasadena, Calif.-based savings… more »
"The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. In this trenchant book, best-selling economist Robert Shiller reveals the origins o… more »
08:41:15 am, by editor of MarketObservation.com , 156 words
Categories: Economics United States, Economics Global
click to get to Roubini CNBC interview
"So the worst is ahead of us for the real economy and financial markets. From time to time markets will rally again reacting to mild and deceptively positive economic news. For example the temporary drug of a $… more »
Project Syndicate: The World's Runaway Train by Kenneth Rogoff, July 2008
"The global economy is a runaway train that is slowing, but not quickly enough. That is what the extraordinary run-up in prices for oil, metals, and food is screaming at us. The… more »
08:02:11 am, by editor of MarketObservation.com , 150 words
Categories: Global natural Resources Trends, Technologies
Oil Crisis, Energy-Saving Technological Change and the Stock Market Crash of 1973-74,Sami Alpanda and Adrian Peralta-Alva, St. Louis Fed, Working Paper 2008-019A, June 2008
Paper abstract:
"The market value of U.S. corporations was nearly halved fo… more »
07/11/08
NYT: Fannie, Freddie, Sweden, Japan by Paul Krugman, July 11, 2008
Will Fannie Mae and Freddie Mac have to be bailed out by taxpayers? I have no inside information, but I?d say yes, for two reasons... more »
Source: Bloomberg
NYT: U.S. Weighs Takeover of Two Mortgage Giants, July 11, 2008
"Alarmed by the growing financial stress at the nation?s two largest mortgage finance companies, senior Bush administration officials are considering a plan to have t… more »
07/10/08
Bloomberg: Fannie Mae, Freddie Losses Make Them `Insolvent,' Poole Says, July 10, 2008
"Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac, former St. Louis Federal Reserve President William Poole said in… more »
07/09/08
BBC: Recession 'looming' for UK firms, July 8, 2008
The British Chambers of Commerce's (BCC) quarterly report found the credit crunch and rising costs had dented the most important sectors of the economy.
It came as the FTSE 100 stock index briefl… more »
07/08/08
Janet Yellen speech to the University of California San Diego Economics Roundtable, San Diego, California
By Janet L. Yellen, President and CEO, Federal Reserve Bank of San Francisco, July 7, 2008
"Now I'd like to pull all of these threads together… more »
07:22:13 am, by editor of MarketObservation.com , 148 words
Categories: Investment Strategy, Performance Measurement, Market Characteristics
Earnings Quality and Ownership Structure: The Role of Private Equity Sponsors, Sharon P. Katz, Harvard Business School, June 2008 (SSRN)
Paper Abstract:
"This study explores how firms' ownership structures affect their earnings quality and long-ter… more »
07/07/08
07:44:21 am, by editor of MarketObservation.com , 145 words
Categories: Stock Market, Corporate Finance, Econ/Stat
MarketWatch: Swiss banks may need to raise $68 billion more Bank regulators to demand higher capital reserves, newspaper reports, July 6, 2008
"The newspaper Sonntag quoted a parliamentarian as saying the nation's Federal Banking Commission would re… more »
The Swiss newspaper SONNTAGSZEITUNG reports of a secret study by hedge fund Bridgewater, saying that the banking crisis will be much worse than expected and that losses will reach US$ 1'600 billion. Link to article:
Sonntagszeitung: Brisante Studie: D… more »
07/06/08
Prospect Magazine: How to stop the next bubble?
Prospect interviews
Mark Hannam
Jonathan Ford
John Gieve
Anatole Kaletsky
George Soros
Martin Wolf
and poses the question of how the next financial crisis can be avoided. The interviewed… more »
07/05/08
07:42:38 am, by editor of MarketObservation.com , 491 words
Categories: Economics United States, Economics Europe
Morgan Stanley Global Economic Forum poses the questions why inflation in the US is not much higher than in the euro area (Puzzle 1) and why market expectations of longer-term inflation in the US and euro area are identical (Puzzle 2), which contrast sha… more »
07/04/08
08:30:52 pm, by editor of MarketObservation.com, 39 words
Categories: Global natural Resources Trends
Energy Information Administration: Real Petrolium Prices
Real Petroleum Prices are computed by dividing the nominal price in a given month by the ratio of the Consumer Price Index (CPI) in that month to the CPI in some "base" period. more »
07:58:57 pm, by editor of MarketObservation.com , 225 words
Categories: Global natural Resources Trends, Politics
Guardian: Secret report: biofuel caused food crisisInternal World Bank study delivers blow to plant energy drive, July 4, 2008
"Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World… more »
02:37:31 pm, by editor of MarketObservation.com, 144 words
Categories: Global natural Resources Trends
Recent inflationary trends in world commodities markets, Noureddine Krichene, IMF, May 2008
Paper Abstract:
"Expansionary monetary policies in key industrial countries and sharply depreciating U.S. dollar exchange rate sent commodities prices soari… more »
06:29:57 am, by editor of MarketObservation.com, 256 words
Categories: Entrepreneurship/Leadership/Innovation
Leadership in Turbulent Times: Competencies for Thriving Amidst Crisis, Erika Hayes James, University of Virginia - Darden Graduate School of Business Administration, Lynn Perry Wooten, University of Michigan - Stephen M. Ross School of Business, 2004… more »
07/03/08
Econbrowser: Recession and the oil shock of 2008, July 2, 2008
The dramatic abandonment of gas guzzlers by American consumers continues, with last month's sales of domestically manufactured light trucks (which includes the once almighty SUV category)… more »
08:43:36 pm, by editor of MarketObservation.com, 3 words
Categories: Investment, Banks/Investment Banks
London Banker's Umbrella more »
08:25:57 pm, by editor of MarketObservation.com , 133 words
Categories: Investment, Banks/Investment Banks
Bloomberg: Lehmans Hedge Fund Deals leave Public in Dark, July 3, 2008
"So let's say you're a big shot at Lehman Brothers Holdings Inc., trying to keep your firm from becoming the next Bear Stearns Cos. The stock has tanked. The market has doubts abo… more »
MarketWatch: U.S. June ISM services falls sharply to 48.2%, July 3, 2008
"Nonmanufacturing sectors of the U.S. economy contracted in June, the Institute for Supply Management reported Thursday. The ISM nonmanufacturing index fell to 48.2% from 51.7% i… more »
FT: ECB raises interest rates to 4.25%, July 3, 2008
The European Central Bank raised interest rates in the eurozone for the first time in more than a year on Thursday as it stepped up efforts to control mounting inflation pressures.
As expected, t… more »
07:40:50 am, by editor of MarketObservation.com , 149 words
Categories: Economics United States, Economics Global
News Daily: Paulson: U.S. home prices to fall, July 2, 2008
"U.S. Treasury Secretary Henry Paulson said on Wednesday that high oil prices, further home price declines and capital markets turmoil will prolong the American economy's slowdown, while Eu… more »
07/02/08
click to get to Youtube video
Related:
Impact Evaluation for Microfinance, The World Bank, November, 2007 more »
10:31:35 pm, by editor of MarketObservation.com , 222 words
Categories: Economics United States, Economics Global
Federal Reserve Board: Governor Frederic S. Mishkin at the Caesarea Forum of the Israel Democracy Institute, Eliat, Israel, July 2, 2008
"The economy has been quite resilient to the adverse shock from the recent financial turmoil, but the analysis… more »
09:21:25 pm, by editor of MarketObservation.com, 68 words
Categories: Economics Europe, Economics Global
FAZ: Währungsreserven auf Rekordniveau, July 1, 2008
The article in Frankfurter Allgemeine linked to above provides information about the IMF?s latest foreign reserve statistics. It shows that euro?s role global share as a reserve currency is now 26.8… more »
Remarks on Economic Slowdown, Market Fallout, and the Path to Financial Recovery, Dennis P. Lockhart, President and Chief Executive Officer,
Federal Reserve Bank of Atlanta, July 1, 2008
Lockhart's conclusion:
"I know you are most interested in t… more »
Coming Clean and
Cleaning Up: Is Voluntary Disclosure a Signal of Effective Self-Policing?, Michael W. Toffel, Jodi L. Short, HBS, May 2008
Paper Abstract:
"As regulators increasingly embrace cooperative approaches to governance, voluntary public-… more »
07/01/08
This is a repetition of a blog entry in May 2008 as it attracted many readers. Looking at the banking crisis, caused heavily by lack of risk control and wrong incentives, the messages given here have tremendous topicality.
"Lessons from Everest:… more »
The escalation of deception in organizations, Fleming, P. and Zyglidopoulos, S., Cambridge Judge Business School, December 2006
Paper abstract:
"We develop a process model that explains the escalation of deception in corrupt organizations. If undet… more »
CNN Money: Auto sales plunge Buyers flee SUVs and pickups but can't find the cars they want, resulting in steep declines at most automakers, July 1, 2008
"June auto sales plunged, according to reports from the nation's major automakers, as Americans… more »
Beyond Control: Crisis Strategies and Stakeholder Media in the Danone Boycott of 2001, Mark Hunter, Affiliation Unknown, Marc le Menestrel, Universitat Pompeu Fabra - Faculty of Economic and Business Sciences, Henri-Claude de Bettignies, Affiliation Unkn… more »
Telegraph.co.uk: UK house prices in grip of slump that experts expect to deepen, July 1, 2008
"Britain is in the grip of a housing slump as bad as at any stage since the 1970s, property experts warned, as data suggested that first time buyers had all… more »
07:03:37 am, by editor of MarketObservation.com , 191 words
Categories: Economics Europe, Economics Global
KOF Working Papers:The Role of Media for Consumers' Inflation Expectation Formation, Michael J. Lamla and Sarah M. Lein, June 2008
"In this paper we identify two channels via which media infuence consumers' inflation ex pectations. On the one hand, th… more »
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