Archive for the 'Commentaries' Category
Introduction Accurately and precisely modeling financial risk is something of a Holy Grail for financial theorists, regulators, and market participants. But like the Holy Grail, the location of a comprehensive model of risk remains unknown; some have even suggested that such a model is a figment of financial theorists’ imaginations. Nowhere has that disaster been […]
Justice Sonia Sotomayor’s appointment was historic. She is the first Latina Supreme Court member and President Barack Obama’s initial appointment. Her confirmation is the quintessential example of his commitment to increasing ethnic and gender diversity in the judiciary; it epitomizes how the administration has nominated and appointed people of color and women to the appellate […]
This fall, like every fall, is a time of keen competition among the nation’s best third-year law students and recent graduates, as they pursue prestigious legal apprenticeships as federal court law clerks, Executive Branch “Honors” program attorneys, law firm junior associates, and fellows and new faculty at law schools. This year’s round of musical chairs […]
In March 2009, ailing insurance giant American International Group (AIG) triggered a national outcry when it paid out $165 million in government bailout funds for employee bonus incentives. President Obama called the bonus payments an “outrage” and promised that his administration would “pursue every single legal avenue to block these bonuses and make the taxpayers […]
“Sustainability,” an environmentally-friendly term that previously incited political unrest, economic uncertainty, and even emotional outrage, has become quite commonplace. In federal, state, and local agencies, sustainable practices have dominated dialogues relating to indoor air quality, water availability, energy use and production; but also growth planning and development controls, public spaces and aesthetics. Governmental entities are installing low-flow water fixtures and energy-efficient appliances, redesigning rooftops and skylines, and inviting industry and neighborhoods to the negotiation table to determine the character of future communities. Sustainability has become the vocabulary of politics and is changing those past practices that have become known as resource-wasteful, inefficient, and costly relative to human and environmental needs.
The current housing crisis has hampered the ability of financial institutions to lend and has led to dire national and global macroeconomic consequences. The credit crisis and the most recent bouts of unemployment, GDP contraction, deflation and the retrenchment of the American consumer all have their roots in the American housing sector. It should, therefore, come as no surprise that a major piece of any solution to the credit crisis must address housing issues head on. The valuations of the mortgage-backed securities that are widely held by financial firms continue to deteriorate as mortgage default rates rise. These defaults, in turn, are causing further write-downs on bank balance sheets and consequent contractions in bank lending capacity. Credit will only loosen when mortgage default rates stop increasing. Today, the most expedient means to stem this rising tide is the fast and efficient implementation of drastic and far-reaching loss mitigation techniques by the financial institutions that own or service the nation’s mortgages. Unfortunately, numerous coordination problems, including the decentralized ownership structure of the many mortgages that were privately securitized, have prevented any efforts at loss mitigation from taking hold in a fast and efficient manner. These coordination problems necessitate swift and forceful federal intervention, embodying a standardized and efficient framework for across-the-board mortgage modifications. Unfortunately, to this point, meaningful efforts toward a legislative solution have been hampered by a blind and naive adherence to the sanctity of contract and various notions of fairness.