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Culp, Christopher L. and Nozawa, Yoshio and Veronesi, Pietro, Option-Based Credit Spreads (December 15, 2014). Available for download at SSRN: http://ssrn.com/abstract=2538876 “Theoretically, corporate debt is economically equivalent to safe debt minus a put option on the firm’s assets. We empirically show that indeed portfolios of long Treasuries and short traded put options (“pseudo bonds”) closely …
December 17, 2014: “Information received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace. Labor market conditions improved further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. …
Remarks by Mr Jaime Caruana, General Manager of the BIS, prepared for the IESE Business School conference on “Challenges for the future of banking: regulation, supervision and the structure of banking”, London, 26 November 2014. “The benefits of higher bank capital – absorbing losses, resolving incentive problems and internalising externalities related to systemic risk – …
Brad Hershbein • Visiting Fellow, The Hamilton Project; Benjamin H. Harris • Policy Director, The Hamilton Project; Melissa S. Kearney • Director, The Hamilton Project. “Student debt is becoming the norm for young adults in America. Aggregate student loan debt has more than tripled over the past decade, as both the number of borrowers and the size …
“More than six years after the federal government took control of Fannie Mae and Freddie Mac, policymakers are weighing a comprehensive overhaul of the mortgage finance system that could shrink or eventually close the two entities and create a system with more private capital. Fannie Mae and Freddie Mac were originally chartered as government-sponsored enterprises …
“Between 2007 and 2012, total expenditures for state and local governments increased by 18.2 percent, from $2.7 trillion to $3.2 trillion, while total revenue declined 1.1 percent over the same five-year period, from $3.1 trillion to $3.0 trillion, according to new U.S. Census Bureau data from the 2012 Census of Governments released today. Two major contributors …
“LexisNexis® Risk Solutions announced the findings of its annual analysis of mortgage fraud in the U.S., revealing that despite improving economic conditions, mortgage fraud is still a national problem. In fact, mortgage application fraud and misrepresentation has grown for the past three years. Seventy-four percent of loans reported in 2013 involved some kind of fraud …
CRS – Legislation to Facilitate Cybersecurity Information Sharing: Economic Analysis. N. Eric Weiss, Specialist in Financial Economics. December 11, 2014. “Data breaches, such as those at Target, Home Depot, Neiman Marcus, and JPMorgan Chase, affecting financial records of tens of millions of households seem to occur regularly. Companies typically respond by trying to increase their cybersecurity by hiring consultants and purchasing new …
“Buss, Adrian and Uppal , Raman and Vilkov, Grigory, Where Experience Matters: Asset Allocation and Asset Pricing with Opaque and Illiquid Assets (December 15, 2014). Available for download at SSRN: http://ssrn.com/abstract=2538381 “Alternative assets, such as private equity, hedge funds, and real assets, are illiquid and opaque, thus posing a challenge to traditional models of asset allocation. …
The Carnegie UK Trust – Beyond Books. The role of enterprising libraries in promoting economic wellbeing. Jennifer Peachey. “Public spending cuts are changing the physical landscape, governance models and staffing of the public library service. Changing demographics, varying consumer needs and new technologies as media for learning and accessing information have also provided challenges to the public library service. Some public libraries have taken these challenges as …
Koijen, Ralph S. J. and Yogo, Motohiro, An Equilibrium Model of Institutional Demand and Asset Prices (December 12, 2014). Available for download at SSRN: http://ssrn.com/abstract=2537559 “We develop an asset pricing model with rich heterogeneity in asset demand across investors, designed to match institutional holdings data. The equilibrium price vector is uniquely determined by market clearing, …
Pew – Racial, Ethnic Wealth Gaps Have Grown Since the Great Recession “The Great Recession, fueled by the crises in the housing and financial markets, was universally hard on the net worth of American families. But even as the economic recovery has begun to mend asset prices, not all households have benefited alike, and wealth …
