Housing and the economic recovery
Remarks at the New Jersey Bankers Association Economic Forum, Iselin, New Jersey.
The U.S. financial system: where we have been, where we are and where we need to go
Remarks at the Reserve Bank of Australia's 50th Anniversary Symposium, Sydney, Australia.
Real estate investors, the leverage cycle, and the housing market crisis
We explore a mostly undocumented but important dimension of the housing market crisis: the role played by real estate investors. Using unique credit-report data, we document large increases in the share of purchases, and subsequently delinquencies, by real estate investors. In states that experienced the largest housing booms and busts, at the peak of the market almost half of purchase mortgage originations were associated with investors. In part by apparently misreporting their intentions to occupy the property, investors took on more leverage, contributing to higher rates of default. Our ...
Time and risk diversification in real estate investments: assessing the ex post economic value
Welfare gains to long-horizon investors may derive from time diversification that exploits non-zero intertemporal return correlations associated with predictable returns. Real estate may thus become more desirable if its returns are negatively serially correlated. While it could be important for long horizon investors, time diversification has been mostly investigated in asset menus without real estate and focusing on in-sample experiments. This paper evaluates ex post, out-of-sample gains from diversification when E-REITs belong to the investment opportunity set. We find that diversification ...
Real estate could pose challenges for some banks
The Southeast's banking industry overall is in good shape, with healthy earnings and capital levels. But upheaval in the region's real estate markets could pose challenges to institutions.
A bit better, but very far from best
Remarks at the Fordham Corporate Law Center Lecture, New York.
The U.S. economic outlook
Remarks at the Washington and Lee University H. Parker Willis Lecture in Political Economics, Lexington, Virginia.
Defaults and losses on commercial real estate bonds during the Great Depression era
We employ a unique data set of public commercial real estate (CRE) bonds issued during the Great Depression era (1920-32) to determine their frequency of default and total loss given default. Default rates on these bonds far exceeded those originated in subsequent periods, driven in part by the greater economic stress of the Depression as well as the lower level of financial sophistication of investors and structures that prevailed in 1920-32. Our results confirm that making loans with higher loan-to-value ratios results in higher rates of default and loss. They also support the business ...
An update on the status of the economy and its implications for monetary policy
Remarks for the Annual Joint Luncheon of Commercial Real Estate Women Dallas and North Texas Certified Commercial Investment Members, Dallas, Texas, August 16, 2006 ; "In determining future policy, my colleagues and I will watch and listen and "taste" the indicators carefully as they come in. And, as we said at the conclusion of our last FOMC meeting, we will act accordingly. If anybody tells you with absolute conviction that the Fed is done raising interest rates or with equal conviction that they have only paused and will raise rates more starting in September or October, remind ...