... possible on futures markets. In 1985, the Morgan Stanley finance house proposed dealer (or “tailormade”) options to its customers ... 3-6 months after the operation Jingkou Dwestrict Branch Trade and wendustry Secretary Xu Yi introduced Cheung Fashion Street's becoming ...
Story - antoq - 10/18/2010 - 13:46 - 155 comments - 0 attachments
We study early default, defined as serious delinquency or foreclosure in the first year, among non prime mortgages from the 2001 to 2007 vintages. After documenting a dramatic rise in such defaults and discussing their correlates, we examine two primary explanations: changes in underwriting standards that took place over this period and changes in the economic environment. We find that while credit standards were important in determining the probability of an early default, changes in the economy after 2004 especially a sharp reversal in house price appreciation were the more critical factor in the increase in default rates.
A notable additional result is that despite our rich set of covariates, much of the increase remains unexplained, even in retrospect. Thus, the fact that the credit markets seemed surprised by the rate of early defaults in the 2006 and 2007 non prime vintages becomes more understandable.
Households have interacted with financial markets in the last 20 years, much more so than in the past, and also have been exposed to increased financial risk as a consequence of financial market liberalization and policy reforms aimed at promoting retirement savings through private pension funds and individual retirement accounts. Although to different extents, these trends are affecting all countries and all dimensions of economic transactions, from payment needs, as witnessed by the growth of the credit card industry, portfolio investments, and borrowing in the mortgage and consumer credit markets. Many of these activities, however, are entered into by uninformed individuals.
In 1935 Franklin Roosevelt established the Rural Electrification Administration, and launched a large-scale initiative to bring electricity to what was then the Great Dust Bowl. This Act facilitated millions of dollars worth of loans to private, public and small cooperative utility ventures. Some of these new power companies paid folk singers to roam the Western United States and write songs which would promote rural electrification. The resulting Woody Guthrie song Grand Coulee Dam (1941) is perhaps the most specific about the positive effects of electrification on labour markets: “Now in Washington and Oregon you can hear the factories hum, Making chrome and making manganese and light aluminum.”. Guthrie, neither environmentalist nor economist, was one of many who believed that electrification would bring jobs and economic diversification, and have positive impacts on the rural standard of living.
Folk wisdom aside, a large literature now examines the effects of post-war technological changes on the US labour market. Rising US female labour force participation is attributed to technological improvements, and particularly to technologies that relaxed the time constraints from childbearing (see, for example Angrist and Evans (1998), Goldin and Katz (2002), Greenwood, Seshadri, and Vandenbrouke (2005), and Bailey (2006)). A major explanation of rising wage inequality in the US since the 1980s is that technological changes have been disproportionally beneficial to high-skilled workers (Acemoglu (1998), Acemoglu (2002), and Galor and Moav (2006)). Surprisingly, despite this extensive literature on the labour market effects of technological change, there is still very little work relating rural electrification to subsequent changes in the structure of the US labour market.
