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At an AEI event on Tuesday, expert panelists joined AEI's Alex Pollock to discuss the US housing market recovery and developments in the European sovereign debt crisis. Mark Fogarty of SourceMedia outlined the recent rapid increase in home prices, highlighting the roughly 10 percent increase in the 12-month national average. Fogarty speculated that this increase could be a "dead cat bounce," or brief recovery from a steep decline.
Tom Zimmerman of UBS Investment Bank suggested that the housing sector improvement stems from a combination of inventory trends and the entry of large-scale investors to the housing sector and government programs. Jay Brinkmann of the Mortgage Bankers Association argued that a combination of government regulation, upcoming regulatory capital standards, and consequent rising mortgage origination costs were all reasons to be cautious about a sustained recovery in the housing sector.
AEI's Desmond Lachman reviewed the precipitous increase in European unemployment rates, which have approached levels of more than 20 percent in countries such as Spain and Greece, and stressed that these unemployment rates threaten to cause political and social instability. Finally, Chris Whalen of Carrington Investment Services LLC proposed that the Federal Reserve's extraordinary lowering of interest rates approximately offsets the drag of new mortgage regulation.
The great housing bubble and shrivel (1999–2012) has at last run its course, but what comes next? What should happen to insolvent Fannie Mae and Freddie Mac? Is there any way out of complete government domination of the mortgage market?
The Federal Reserve has become the world's greatest mortgage investor. Has a central-bank-financed bond bubble replaced the housing bubble? And what will be the aftermath of Europe’s sovereign debt bubble, including possible losses on deposits in Cyprus? These and related questions will be addressed by our expert panel.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.
Alex J. Pollock, AEI
Jay Brinkmann, Mortgage Bankers Association
Mark Fogarty, National Mortgage News
Desmond Lachman, AEI
Chris Whalen, Carrington Investment Services LLC
Thomas Zimmerman, UBS Investment Bank
Alex J. Pollock, AEI
For more information, please contact Emily Rapp at Emily.Rapp@aei.org, 202.419.5212.
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Jay Brinkmann is chief economist and senior vice president of research and education for the Mortgage Bankers Association (MBA). He joined MBA in 2001 as the head of its research group after having worked in the portfolio strategy group of Fannie Mae. He began his career as a Capitol Hill press secretary and served as the deputy chief of staff to the governor of Louisiana. He has worked in commercial banking and was on the business school faculty at the University of Houston, where he specialized in financial institution regulation.
Mark Fogarty is editorial director of SourceMedia’s Mortgage Group. He has covered the mortgage business since 1984, meaning he is on his fifth real-estate cycle. He directed the news team that won the George Polk Award for Financial Journalism and his editorials have won awards from the American Society of Business Press Editors and the Native American Journalists Association. Fogarty has also worked for the Jersey Journal in Jersey City, NJ, and the South Bergenite, in Rutherford, NJ.
Desmond Lachman joined AEI after serving as a managing director and chief emerging-market economic strategist at Salomon Smith Barney. He previously served as deputy director in the International Monetary Fund's (IMF) Policy Development and Review Department and was active in staff formulation of IMF policies. Lachman has written extensively on the global economic crisis, the US housing market bust, the US dollar, and the strains in the euro area. At AEI, Lachman is focused on the global macroeconomy, global currency issues, and multilateral lending agencies.
Alex J. Pollock joined AEI in 2004 after 35 years in banking. He was president and CEO of the Federal Home Loan Bank of Chicago from 1991 to 2004. He is the author of numerous articles on financial systems and the organizer of the “Deflating Bubble” series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. At AEI, he focuses on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. He is the lead director of CME Group, a director of Great Lakes Higher Education Corporation and the International Union for Housing Finance, and chairman of the board of the Great Books Foundation.
Christopher Whalen is executive vice president and managing director for Carrington Investment Services LLC, a unit of Carrington Holding Company. Carrington operates businesses that cover virtually every aspect of single family residential real-estate transactions: investments in US real-estate and mortgage markets, loan origination and servicing, asset management and property preservation, real-estate sales and rental, and title and escrow services. Whalen is cofounder and vice chairman of the board of Lord, Whalen LLC. Lord, Whalen LLC is the parent company of Institutional Risk Analytics, the Los Angeles-based provider of bank ratings, risk management tools, and consulting services for auditors, regulators, and financial professionals. Whalen is the author of the December 2010 book "Inflated: How Money and Debt Built the American Dream," now in a second printing from John Wiley & Sons. He currently edits the Institutional Risk Analyst, a weekly news report and commentary on significant developments in and around the global financial markets.
Thomas Zimmerman is a managing director at Union Bank of Switzerland (UBS). He has been involved in managing the firm's research efforts on asset-backed and mortgage-backed securities for the past 14 years. Before joining UBS, Zimmerman managed research groups on asset-backed and mortgage-backed securities at Prudential Securities and Chemical Bank. He started his research career as a vice president in the mortgage research department at Salomon Brothers. His research has appeared in numerous fixed-income publications and industry reference works, and he was a member of the UBS research team that consistently ranked first in the annual institutional investor survey of fixed-income analysts.