Wharton on the Financial Crisis - The Wharton School of the University of Pennsylvania

Wharton provides timely analysis and insight into the origins of the financial crisis, how it's affecting our economy, and what we can expect for the future. Check this page frequently as news posts and information will be added regularly.

The New York Times Online - "Ordinary bureaucratic process may not always be the right approach, at least in a crisis," says Asst. Prof. of Legal Studies, David Zaring, in an online roundtable on the financial crisis. (October 9, 2009)
Vermont Public Radio - Assoc. Prof. of Business and Public Policy, Justin Wolfers participates in a debate on the US government's economic stimulus program, noting that "the countries that have had the biggest stimulus packages ... have actually had the quickest rebounds so far." (October 5, 2009)
Reuters - Prof. of Marketing, Stephen Hoch, offers predictions about the holiday shopping season, noting that a rise in back-to-school retail sales "signals a bottom." (October 5, 2009)
Bloomberg.com - Prof. of Real Estate and Finance, Susan Wachter, discusses how the recession has impacted the commercial real estate market in Phoenix, Arizona and other nearby cities, explaining that the "overall recovery [in such markets] will lag the nation as a whole." (October 1, 2009)
Associated Press - Assoc. Prof. of Insurance and Risk Management, Kent Smetters, explains how Social Security has been impacted by the economic crisis, noting that "it's unlikely we are going to pull out (of the recession) with a strong recovery." (September 26, 2009)
MarketWatch - "Everyone pretty much has been hit by the global financial crisis and virtually everyone is confronting the aging revolution," says Prof. of Insurance and Risk Management, Olivia Mitchell, in a discussion of which countries offer the most secure pension benefits. (September 23, 2009)
BusinessWeek.com - "The decisive actions by the [Federal Reserve] and its counterparts leave me optimistic that a solid economic recovery is now underway," writes Prof. of Finance, Jeremy Siegel, in an op-ed about the Fed's response to the financial crisis. (September 20, 2009)
TheStreet.com - Prof. of Management, Mauro Guillen's, course on the recession, "The Economic & Financial Crisis: Causes, Consequences and Policy Options," is highlighted in an article about how business schools have responded to the financial crisis. (September 18, 2009)
CNBC, "One Year Later: The Week That Shook The World" - "We need a broader notion of integrity inside the banking industry," says Prof. of Legal Studies and Business Ethics, Thomas Donaldson, in a segment on how to restore trust in the financial sector. (September 14, 2009)
BusinessWeek.com - Prof. of Finance, , Jeremy Siegel, offers commentary on the September 2008 collapse of Lehman Brothers, noting that "we learned from the mistakes of the 1930s." (September 13, 2009)
Bloomberg.com - Prof. of Real Estate and Finance, Susan Wachter, discusses the crisis in commercial real estate, cautioning that "it's a different crisis, a far worse crisis" than the recession of the early 1990s. (September 11, 2009)
The Wall Street Journal Online - "The experience of managing through a crisis makes leaders stronger, more resilient and better prepared for the next one," writes Prof. of Management, Michael Useem, in a column about leadership lessons of the economic crisis (subscription required). (September 9, 2009)
Associated Press - Asst. Prof. of Real Estate, Albert Saiz, discusses new realities of the real estate market, noting that "[the U.S. is] going to need more housing" in the long run. (September 8, 2009)
The New York Times - Prof. of Insurance and Risk Management, Neil Doherty, comments on Wall Street bankers' plans to profit from "life settlements," explaining that "when [insurers] set their premiums they were basing them on assumptions that were wrong." (September 5, 2009)
Slate/The Big Money - "Unquestionably, people's moods are influencing large-scale systems," says Prof. of Management, Sigal Barsade, in a discussion of how emotions impact the broader economy. , people's moods are influencing large-scale systems," says Prof. of Management, Sigal Barsade, in a discussion of how emotions impact the broader economy. (September 3, 2009)
Minnesota Public Radio, "Midmorning - "I think it's absolutely critical to push on the frontier of financial education," notes Prof. of Insurance and Risk Management, Olivia Mitchell, in a discussion of irrational investment decisions. (September 2, 2009)
The Globe and Mail - Prof. Legal Studies and Business Ethics, Thomas Donaldson, is interviewed about the role of ethics in the current economic crisis, explaining how the downturn was impacted by "the normalization of questionable behavior." (September 2, 2009)
BusinessWeek.com - Prof. of Management, Peter Cappelli, discusses CEO compensation, noting that rewarding executives amid a recession can be perceived as "patently unfair." (August 26, 2009)
Reuters - "Letting Lehman [Brothers] fail is going to be the big issue that will be debated by economists and policymakers … for generations," says Prof. of Finance, Jeremy Siegel, in a segment on Ben Bernanke's performance as Federal Reserve chairman. (August 25, 2009)
The Wall Street Journal - "One positive byproduct of the crisis may be that we start … considering different models and different alternatives," says Prof. of Management, Mauro Guillen, in an article about the recession's impact on business school curriculum. (August 20, 2009)
CNBC, "The Call" - Prof. of Real Estate and Finance, Susan Wachter discusses how foreclosures might impact a recovery in the housing market, noting that "we're in a new world of volatile house prices." (August 20, 2009)
The New York Times - Wharton's Financial Industry Regulatory Authority Institute is mentioned in a story about the growing popularity of executive education courses related to risk management. (August 19, 2009)
The Wall Street Journal - "It's a forecasting principle that the more uncertainty you have, the more conservative you should be," says Prof. of Marketing, J. Scott Armstrong, in an article about the recession's impact on forecasting strategies. (August 12, 2009)
Marketplace Public Radio - Assoc. Prof. of Business and Public Policy, Justin Wolfers, comments on the rise in long-term unemployment, noting that this problem "requires aggressive policies to keep the unemployed connected to the world of work." (August 11, 2009)
Bloomberg.com - "Demand for commercial space comes from employment and the income generated by that employment," explains Prof. of Real Estate and Finance, Joseph Gyourko, in a discussion of the commercial real estate crisis. (August 10, 2009)
The Wall Street Journal - “A large chunk of the American population has decided not to do any discretionary spending,” says Prof. of Marketing, Stephen Hoch, in an article about the back-to-school shopping season. (August 7, 2009)
CNBC, “Street Signs” - Prof. of Real Estate and Finance, Susan Wachter, is interviewed about recent data on “underwater” mortgages, noting that the potential need for additional stimulus measures will “all depend on the job [losses].” (August 6, 2009)
NPR, "On Point" -"The biggest drag on our economy right now is still the fear of losing [one's] job," notes Prof. of Finance, Jeremy Siegel, in an interview about whether the US economy has reached a turning point. (August 4, 2009)
WashingtonPost.com -Asst. Prof. of Legal Studies, David Zaring, writes about the Supreme Court's role in shaping financial regulatory reform, explaining that the "Free Enterprise Fund could determine just how 'independent,' or free from presidential control, an independent financial regulator can be." (August 2, 2009)
CNBC, "Power Lunch" - Prof. of Real Estate and Finance, Susan Wachter, is interviewed about possible signs of a bottom in the housing market, explaining that "prices are not falling, and that's the key." (July 28, 2009)
WHYY, "Radio Times - "If we knew in January what we know now about the state of the economy, the stimulus would have been a lot larger," says Assoc. Prof. of Business and Public Policy, Justin Wolfers, in a discussion of whether a second economic stimulus package is needed. (July 28, 2009)
The New York Times - "The stakes [for General Motors] are about as big as they've ever been for a company's remake," says Prof. of Management, Michael Useem, in an article about whether G.M.'s restructuring efforts will prove successful. (July 26, 2009)
The New York Times Online - Prof. of Finance and Economics, Franklin Allen, and Prof. of Finance, Jeremy Siegel, discuss the meaning behind big second-quarter bank profits; Knowledge@Wharton is cited. (July 24, 2009)
NPR, "Morning Edition - "We're going to talk about bailing out some of these of institutions - and figuring out how to unwind them - for the next five to ten years," notes Assoc. Prof. of Insurance and Risk Management, Kent Smetters, in an interview about Henry Paulson's role in the Bank of America/Merrill Lynch merger. (July 17, 2009)
Human Resource Executive - Prof. of Management, Peter Cappelli, discusses companies that have cut back on executive education courses and training programs, explaining that, "given the current economic conditions, such a decision is only natural." (July 15, 2009)
US News & World Report - Prof. of Management, Mauro Guillen, discusses why Americans must "invest more in their own future" in order to help foster economic growth. (July 9, 2009)
Marketplace Public Radio - Assoc. Prof. of Business and Public Policy, Justin Wolfers, explains why he feels a second economic stimulus package is necessary, noting that "our biggest economic risk isn't the deficit, but the risk of doing too little to kick start the economy." (July 9, 2009)
Reuters - "Housing is key to the economy, and recent signals point to decelerating declines… but interest rates could rise," cautions Prof. of Real Estate and Finance, Susan Wachter, in an article about the increase in U.S. mortgage applications. (July 8, 2009)
The Wall Street Journal - Prof. of Finance, Jeremy Siegel, discusses the future of stocks, predicting that "the next five years will see stocks returning 7%, post-inflation" annually. (July 8, 2009)
US News & World Report - Prof. of Insurance and Risk Management, Olivia Mitchell, offers advice to baby boomers who are planning for retirement, noting that "the financial crisis should force us to pay much more attention to how much we can lose." (July 6, 2009)
Workforce Management - Prof. of Management, Peter Cappelli, explains how companies are using the financial crisis as "an opportunity to up-skill their labor." (June 28, 2009)
CNBC - "The Kudlow Report" - I think [the Dow] is going to be up 10 to 12%" by year-end, predicts Prof. of Finance, Jeremy Siegel, in a segment on the recent stock market rally. (June 25,2009)
Fortune - Prof. of Management, Mauro Guillen, discusses the deterioration of a key market measure of credit risk, explaining that “the U.S. will have to take action to restore the credit system before the economy can resume expanding in earnest.” (June 24, 2009)
CNBC - "The Call" - Prof. of Real Estate and Finance, Susan Wachter, is interviewed about the effectiveness of President Obama's housing rescue plan, noting that "the problem is that [interest rates] are headed up when the economy recovers." (June 19, 2009)
The Washington Post - Prof. of Management, Mauro Guillen, explains how the global economic crisis has impacted the flow of remittances sent to Mexican families. (June 14, 2009)
Bloomberg Television, "Taking Stock" - Prof. of Real Estate and Finance, Susan Wachter, is interviewed about the state of the US housing market, predicting that "the bottom [in housing prices] is going to form after we see a peak in unemployment.". (June 12, 2009)
WHYY Radio, "Radio Times with Marty Moss-Coane" - Prof. of Insurance and Risk Management, Olivia Mitchell, is interviewed about how the recession has impacted baby boomers' retirement funds. (June 8,2009)
Associated Press - Prof. of Management, Peter Cappelli, explains how companies can use the recession as a "motivating force" for employees. (June 6,2009)
Reuters - Prof. of Marketing, Stephen Hoch, discusses May retail sales for luxury outlets, as compared to lower-priced chains. (June 4,2009)
The Washington Post - Assoc. Prof. of Management, John Paul MacDuffie, predicts how the US government's bailout of General Motors will impact the national economy. (June 2,2009)
The New York Times - Prof. of Management, Michael Useem, comments on the historic nature of General Motors' bankruptcy. (May 31,2009)
Seattle Times - Assoc. Prof. of Real Estate, Todd Sinai, discusses housing affordability, explaining that "lower home prices are offset by a struggling economy." (May 30, 2009)
The Wall Street Journal - Prof. of Health Care Management and Insurance and Risk Management, Scott Harrington, is the author of an op-ed on why "an appropriate government response to the bursting of the housing bubble requires a full understanding of what went wrong and why." (May 23,2009)
BusinessWeek.com - Prof. of Finance, Richard Herring, comments on how the US could avoid future bailouts of large firms. (May 18, 2009 issue)
Bloomberg Radio - "Bloomberg Surveillance" - Prof. of Real Estate and Finance, Susan Wachter, is interviewed about the relationship between the job market and the US housing turnaround. (May 15, 2009)
BusinessWeek.com - Robert Inman, Vice Dean and Director, Doctoral Programs discusses the financial crisis' impact on interest in doctoral programs. (May 12, 2009)
CNBC -"The Call" - Prof. of Real Estate and Finance, Susan Wachter, is interviewed about how losses from commercial real estate loans could impact the results of bank stress tests. (May 6, 2009)
Money - Prof. of Marketing David Reibstein comments on how Americans' financial values have changed as a result of the economic crisis. (May 4, 2009)
The New York Times - Research by Prof. of Finance Nicholas Souleles is cited in a discussion of how depression scares impact consumer spending. (May 2, 2009)
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Follow Knowledge@Wharton's continuing coverage of the global financial crisis. Visit K@W special issue

Recently published:
Economic Recovery: Are Happy Days Here Again?
Wall Street has just seen a two-month rally that included a whopping 39% rise from the recent rock-bottom prices on the Standard & Poor's 500. In addition, during several consecutive weeks, new U.S. jobless claims have dropped. Even quarterly reports from the battered banking sector have given investors some optimism that the worst-case scenarios will not happen. MORE
(June 10, 2009)
Neel Kashkari on the Financial Crisis: 'Our Nation Will Emerge Stronger' Q&A
On May 18, Neel Kashkari, former interim head of the Treasury Department's Office of Financial Stability, spoke at Wharton's San Francisco campus. The speech covered his views on the causes of the crisis; the reasons why the Treasury Department had to seek authority to set up a $700 billion bailout program; how that authority was used to keep the financial system from collapsing; and where the economy is headed. After the lecture, Kashkari discussed these issues with members of the audience. Knowledge@Wharton presents a video report of the lecture and discussion. MORE
(June 11, 2009)
Reforming the Ratings Agencies: Will the U.S. Follow Europe's Tougher Rules?
The financial crisis has provided an unexpected crash course on credit rating agencies, such as Moody's, Fitch and Standard & Poor's, which stamped triple-A ratings on a broad spectrum of subprime mortgage securities -- implying that they were nearly risk free -- then back-pedaled when the debt collapsed, taking with it the global economy. MORE
(May 27, 2009)

FACULTY TEACH-INS

Wharton Professors: More Trouble Ahead
Professors Richard Marston, Jeremy Siegel, Richard Herring, and Kent Smetters discuss the origins of the crisis, how it has evolved, and where we're headed next.
Do the Answers to Our Current Financial Woes Lie in the Past?
Wharton and University of Pennsylvania Professors Bulent Gultekin, Jennifer Amyx, Luzi Hail, Marshall Meyer, and Heiner Schulz discuss the global landscape of the crisis at the school's Lauder Institute of Management & International Studies.
'In the Eye of the Storm': Citi CEO Vikram Pandit Sees a Difficult Recovery Ahead
In a question-and-answer session, Wharton Professor Michael Useem talks with Citi CEO Vikram Pandit.
Wharton Faculty Discuss Financial Crisis
Professors Jeremy Siegel, Richard Herring, Franklin Allen, and Joseph Gyourko take on the issues of the unfolding crisis.

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