April 9, 2010 at 12:44 pm
Former executives from Fannie Mae and Freddie Mac, the goverment agencies whose mortage-loans holdings helped sink the economy, testified before the Congressional commission looking into the financial meltdown. Mark Williams, who teaches finance at the BU School of Management and is author of “Uncontrolled Risk” about the fall of Lehman Brothers, says both agencies may have outlived their usefulness.
“Without the capital spigot these agencies created, less funds would have found their way to dangerously risky mortgage products. The government created Fannie Mae in 1938 and Freddie Mac in 1970, and took them over in 2008. It should consider taking them off life support in 2010.”
Contact Mark Williams, 617-358-2789, williams@bu.edu
April 8, 2010 at 3:22 pm
New rules proposed by the S.E.C. would, among other things, require that the issuers of bonds filled with bundled mortgages -- not the ratings agencies -- would have to vouch for their soundness and retain 5 percent of each bond. Law Professor Tamar Frankel, an authority on securities law and author of "Trust and Honesty: American's Business Culture at a Crossroad," says the proposals are reasonable.
"The rating agencies that were supposed to be the judges of risk failed, and it matters not why they did. The results were too painful for millions of people and too lucrative for the relative few. That is why the S.E.C.'s proposal is so timely and so important."
Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu
April 8, 2010 at 2:30 pm
A new study from Bruce Anderson, Ph.D., of Boston University's Dept. of Geography and Environment has found that the summertime conditions in the Northeast have the potential to change dramatically as the century progresses.
According to Dr. Anderson, the study found "there is the threat that conditions across the Northeast are going to become significantly drier. In addition, they will become significantly warmer. More worrying though, is the health-related changes in the heat index for our region, which captures days with both high temperatures and high humidities."
Anderson explains that not only does the average summertime heat index increase significantly - by up to 4C (7F) - but so do the number of potentially-threatening "extreme caution" days (where the heat index exceeds 90F). In fact, for the highly-populated Northeast megapolis stretching from NYC to Boston, over half the days during summer are expected to exceed the "extreme caution" value; and, the "extreme caution" value has the potential to become the norm for the region.
Similar studies carried out in parallel with this one suggest that the summertime climate of Massachusetts will become more and more like that of the deep South (Georgia and Florida) as the century progresses.
The research appears in the April issue of Climatic Change.
Contact: Bruce Anderson, 617-353-4807, brucea@bu.edu
April 8, 2010 at 11:52 am
Leaders of the two Cold War adversaries signed a new treaty further reducing their nuclear-arms arsenals. Both Presidents Obama and Medvedev said the pact will make the world safer and benefit relations between the United States and Russia. Attorney Philip O'Neill, author of the newly published "Verification in an Age of Insecurity" and who teaches national security law at the BU Law School, says it's a good next step.
"The new START Treaty is one small step, and not a giant leap, in mankind's continuing quest to coax the nuclear weapons genie back into the bottle."
Contact Philip O'Neill, 617-951-2253, poneill@eapdlaw.com
April 7, 2010 at 3:05 pm
As the bipartisan Congressional commission looking into the financial meltdown resumes hearings, law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and former counsel to the Fed Board of Governors, stops to take a look at where we've come and where we might be going.
"While ‘Alice in Wonderland’ tops the box office, a version of the film is playing out in Washington.
"Now in the third year of our national economic crisis starting with the implosion of Bear Stearns in March ‘08, Congress is suddenly rushing to pass timid legislation while a fact-finding commission of Congress’s own creation is searching for the causes of the crisis.
"The Financial Crisis Inquiry Commission has been underfunded, under-staffed, and lethargic in its early moves. Despite its shortcomings, we are coming to the point where it would be better to await the Commission’s December findings than to pass obviously flawed legislation."
Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu
April 7, 2010 at 1:06 pm
The Federal Trade Commission is reportedly preparing an antitrust challenge to Google's proposed acquisition of the mobile-advertising company AdMob, and asked AdMob competitors about what the deal would mean for consumers. Law Professor Keith Hylton, an authority on antitrust law, says be weary of what the competitors say -- even in sworn statements.
"If the FTC asks AdMob’s competitors what they think about an acquisition that might give the firm a competitive advantage by enhancing the efficiency of its service, what will they say? My guess is that they will say that the acquisition is bad for consumers."
Contact Keith Hylton, 617-353-8959, knhylton@bu.edu
April 6, 2010 at 5:41 pm
With the Queen agreeing to dissolve parliament, British Prime Minister Gordon Brown (right) announced a May 6 election date and England's one-month campaign season is officially under way. Political science Professor Graham Wilson, author of "Only in America? American Politics in Comparative Perspective" (and a Brit himself), expects an exciting, unpredictable election.
"The economic events of the last two years and Gordon Brown’s personal unpopularity should have made this a cakewalk for the Conservatives. But they’ve so far failed to close the deal with voters and so the outcome is still wide open."
Contact Graham Wilson, 617-353-2540, gkwilson@bu.edu
April 6, 2010 at 5:14 pm
For the past year the Securities and Exchange Commission has been trying to toughen up its weakened image. But it still faces skepticism about its ability to adequately enforce laws against corporate crime. Law Professor Tamar Frankel, an authority on securities law and author of "Trust and Honesty: America’s Business Culture at a Crossroad," says it will take time.
"What brought us to this stage in years cannot be changed in one. The SEC should examine possible culprits, cooperate with local prosecutors, and establish a leadership aimed at restoring America's trust in its institutions. And that takes time."
Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu
April 6, 2010 at 4:31 pm
In a bid to become more relevant to the hardware side of the mobile-phone business, reports say Microsoft will unveil a new line of phones (code name "Pink") with social-networking capabilities -- different from the "Windows Phone," expected later this year. School of Management Professor N. Venkat Venkatraman, head of the Information Systems Department, says he's not convinced the strategy will work.
"It’s not clear to me why Microsoft is pursuing dual directions with its mobile phones as it may confuse the issue rather than clarifying it. In any event, the mobile space is more exciting than ever."
Contact N. Venkat Venkatraman, 617-353-7117, venkat@bu.edu
April 6, 2010 at 2:16 pm
Recent anti-western rhetoric from Afghan President Hamid Karzai is stressing American officials and the Obama administration is concerned that it may hamper efforts to wind down U.S. military operations in Afghanistan. International Relations Professor William Keylor, author of "A World of Nations: The International Order Since 1945," says Karzai is playing with fire.
“With Al-Qaeda virtually gone from Afghanistan, the question ‘what are we fighting for?’ may surface in American public discourse for the first time since the Taliban regime was overthrown.”
Contact William Keylor, 617-358-0197, wrkeylor@bu.edu
