ANN ARBOR — During the darkest days for investors after the 2008 financial crisis that swallowed Lehman Brothers up like a sinkhole, the common wisdom was to hold tumbling shares and wait for better days. (more…)
COLLEGE PARK, Md. – The so-called “fiscal cliff” has already begun dampening the U.S. economy – even before it officially kicks in – and by year’s end will have cut 2012 GDP an estimated six-tenths of one percent, says a new study conducted by researchers at the University of Maryland’s Interindustry Forecasting Project (Inforum).
The study, called Fiscal Shock: America’s Economic Crisis, is one of the first to look beyond the first year effects of the combined federal spending cuts and tax increases. It projects an escalating impact into 2014 and beyond, as “multiplier” effects of fiscal contraction kick in. (more…)
The prevailing narrative of the financial crisis revolves around banks’ reduced ability to issue loans, but a new paper by University of Arizona associate professor of finance Kathy Kahle reveals that the credit supply shock did not affect publicly traded firms as much as expected.
Bank losses from toxic assets were responsible for the credit contraction, but those toxic assets – mostly mortgage-backed securities – are not directly related to the performance of industrial firms. (more…)
