Preliminary Evaluation of the HECM Reverse Mortgage Program

This paper describes and evaluates the Home Equity Conversion Mortgage (HECM) insurance demonstration, designed to encourage the development of private reverse mortgage programs by insuring lenders against the risks associated with new mortgage lending programs and with reverse mortgages in particular. The paper evaluates demand for the program by analyzing the attributes of participating borrowers, their properties and the types of payment options chosen. It also presents several observations regarding participation by the financial community in the HECM demonstration, required counseling and legal and regulatory issues that may hamper the growth and development of reverse mortgage programs in general.
The findings suggest strong demand for reverse mortgages among "house-rich, cash-poor" elderly homeowners, either to supplement inadequate current incomes or to provide a reserve against unexpected lump-sum expenses. The flexible design of the HECM program addresses a wide variety of borrower financial needs, even though it imposes higher costs on lenders and servicers. The continued growth of the program, however, is hindered by a shortage of qualified housing counselors in some areas, as well as by a variety of legal and regulatory barriers.     

Analyst Behavior Following IPOs: The "Bubble Period" Evidence

We examine over 7400 analyst recommendations made in the yearafter going public for IPOs from 1999 to 2000. Initiations ofcoverage at the end of the quiet period come almost exclusivelyfrom affiliated analysts, whereas initiations afterward arepredominantly from unaffiliated analysts. Contrary to previousfindings, we find no evidence that the market discounts recommendationsfrom affiliated analysts once we control for recommendationcharacteristics and timing. Moreover, analyst coverage in thefirst year is not affected by underpricing, and after the flurryof initiations at the end of the quiet period, the number ofanalysts covering a firm during the following 11 months is unrelatedto the number of managing underwriters. (JEL G12, G14, G24)     

The Quiet Period Goes out with a Bang

We examine the expiration of the IPO quiet period, which occurs after the 25^th calendar day following the offering. For IPOs during 1996 to 2000, we find that analyst coverage is initiated immediately for 76 percent of these firms, almost always with a favorable rating. Initiated firms experience a five-day abnormal return of 4.1 percent versus 0.1 percent for firms with no coverage. The abnormal returns are concentrated in the days just before the quiet period expires. Abnormal returns are much larger when coverage is initiated by multiple analysts. It does not matter whether a recommendation comes from the lead underwriter or not.     

Seeing One's Intellectual Roots: A review essay

The Review of Austrian Economics -     

Transformed Youth Justice?

Of the ten pledges offered by New Labour in their 1997 Election Manifesto, one concerned crime. It contained a specific youth justice commitment: 'We will be tough on crime and tough on the causes of crime, and halve the time it takes persistent juvenile offenders to come to court'. In the 2001 Manifesto, Labour reported that they had substantially achieved this pledge: crime was falling and'The time from arrest to sentence for persistent young offenders is down from 142 days to 89 days—on track to halve the time within the five years promised in 1997'. Youth justice had been reformed and the Government would move on: it would build on the youth justice reforms by tackling provision for 18- to 20-year-olds. This article addresses four issues: why did youth justice reform figure prominently in New Labour's 1997 plans; in what respects has the system of youth justice been reformed; have the reforms been a success; and what does the immediate future for youth justice hold?     

VOLUME AND R2: A FIRST LOOK

Roll (1988) reports that when days on which public announcements occur are excluded from a regression of stock returns on market returns, the R²s are largely unaffected. To explain his findings, Roll suggests that much of the firm-specific movements in common stocks may be a result of private information or occasional trading frenzy. As a test of Roll's conjecture, volume is used in this study as a proxy to capture the impact of firm-specific information and irrational trading. If Roll's conjecture is correct, the R² should rise when high-volume days are excluded from a regression of stock returns on market returns. The results presented here are consistent with that prediction, but they are not strong.