If innovation has been the source of our extraordinary prosperity, it is important to inquire about its future. The good news is that the rate of discontinuous innovation in Western society appears to be accelerating. This rate is likely to hold if the two bedrock premises of innovation also hold over time: (1) the willingness [...]
Service relationships—with vendors, consultants, and law and accounting firms—have been mentioned as a hidden part of a company’s intellectual capital. Partnerships and alliances can be even more important. To the extent that a company can effectively muster the energies and the brainpower of a powerful strategic partner, it can speed its product development, reduce the [...]
It is clear that during many of the past 50 years, risk-free investments such as Treasury bonds offered real after-tax returns that were either negative or in the low single digits for high-bracket investors. (For example, a 5 percent nominal return in a 40 percent tax bracket with 3 percent inflation is a zero percent [...]
In this section, we examine the delinquency and roll rates, and the default and loss severity of subprime loans. The delinquency status of a loan indicates the number of days the borrower is contractually past due (i.e., days past due or dpd). The loan delinquency statistics may be calculated using either the Mortgage Bankers Association [...]
On July 30, 1953, the federal government established the U.S. Small Business Administration with the purpose of aiding, counseling, assisting and protecting small businesses. SBA financial assistance is vital to the growth and startup of small businesses. Over the years, the SBA has grown in its total assistance provided and also the types of programs [...]
Analyzing CDO performance is challenging because there is no publicly available secondary market data. Furthermore, there are no readily available performance statistics or CDO indexes to gauge total returns. Certain proxies for CDO collateral performance exist, such as leveraged-loan closed funds (as a proxy for CLOs), synthetic residential MBS indexes, and leveraged-loan indexes, but due [...]