Category: Financial Markets

Good intentions, iffy choices paved road to credit crisis

It’s said the road to Hell is paved with good intentions, and some people sweating through the credit-market meltdown might agree. Underlying the wreckage are decades of regulatory and legislative decisions that opened the door to today’s financial woes. Some policy choices were high-minded, some were deregulatory, and some just seemed like a good idea at the time. But, with passage of the Troubled Asset Relief Program (TARP), we’re on the right track now, aren’t we? Maybe not. According to Anthony Sanders, professor of finance at the W. P. Carey School of Business, TARP falls short as a deterrent to future financial troubles.

Christopher Cole: Emerging trends in real estate investment

"In real estate, if you keep yourself in front of long-term demographic trends, you will prosper," observes Christopher Cole, founder and chief executive of the Cole Companies, who received the Distinguished Achievement Award at the W. P. Carey undergraduate convocation recently. A survivor of Phoenix’s boom-and-bust real estate markets for more than 28 years, Cole maintains real estate as an investment class is in its baby years. The biggest inflows of capital, he says, have yet to happen.

Cover your basis: Hedging real estate risk

Since the turn of the millennium, real estate has become one of the fastest growing investment sectors, not just in the United States but globally as well. But as much as we would like to think otherwise, there’s considerable risk involved in real estate investing. One way to ameliorate that risk is through hedging practices, according to Robert Edelstein, a real estate professor at the Haas School of Business at the University of California, Berkeley, and Anthony Sanders, the Bob Herberger Arizona Heritage Chair in Real Estate and Finance at the W. P. Carey School of Business.

Getting out early: An analysis of market-making activity

Stock market analysts move markets, and not just because investors believe in the validity of their research and legitimacy of their opinions. In an important new study, Assistant Professors Jennifer L. Juergens and Laura Lindsey examined affiliated market-making activity around analyst recommendation changes and found a dramatic effect on trading activity for the issuing brokerage firms around both upgrades and downgrades.