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The Johnson School community shares perspectives on the causes and implications of the financial crisis as events continue to unfold.

Where Were the Ratings Agencies?

MARCH 11, 2009 Frank Raiter, former managing director at Standard & Poor's and head of its Mortgage Backed Securities Rating operations, was a guest speaker on March 11 for "Ethics & Corporate Culture," a new course taught by Dana Radcliffe, Day Family Senior Lecturer of Business Ethics, and jointly offered by the Johnson School and the Law School. Last fall, Raiter testified before Congress on the role of the credit rating agencies in the current financial crisis. He was also featured in "Credit and Credibility," an episode of "NOW" on PBS, which aired in late December.
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1929 and 2009: Things that are different and the same

JANUARY 22, 2009 Hal Bierman Jr., Nicholas H. Noyes Professor of Business Administration and professor of finance, compared the financial crises of 1929 and 2009 in an address at the 2nd Annual Alumni Recognition and Celebration Dinner at the Grand Hyatt in New York City on Jan. 22, 2009. Bierman is uniquely qualified to address this topic: His areas of expertise include investment and corporate financial-policy decisions, and he has written two books about the stock market crash of 1929: The Great Myths of 1929 and the Lessons to be Learned (Greenwood, 1991), and The Causes of the 1929 Stock Market Crash: A Speculative Orgy or a New Era? (Greenwood Press, 1998).
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Business@Cornell launches with live webcast: Market Crisis Unraveled, From Wall Street to Main Street

OCTOBER 23, 2008 Three faculty experts shared their perspectives on issues of real estate finance, the market's reactions to the bailout, and the effect on our economy at the first in a series of live webcasts offered by Business@Cornell, a partnership between the Johnson School, the School of Hotel Administration, and the Applied Economics and Management Program at Cornell University. The presentation was moderated by Associate Dean Doug Stayman and featured Johnson School faculty members Ori Heffetz, assistant professor of economics, whose interests lie in the social and cultural aspects of economic behavior, and Bob Andolina, visiting senior lecturer of finance. Daniel Quan, a professor of financial management at Cornell's School of Hotel Administration, whose areas of expertise include real estate finance, mortgage markets, and auction markets, rounded out the panel.
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The Financial Crisis: Implications for Washington, Wall Street, and Main Street

(left to right) Luis-Francois de Lencquesaing, president of the Cornell International Affairs Review, Senior Lecturer Bob Andolina, and Professors David Easley and Elizabeth Sanders.

OCTOBER 1, 2008 The Cornell International Affairs Review sponsored an interdisciplinary discussion of the current financial crisis featuring Bob Andolina, MBA '86, visiting senior lecturer of finance at the Johnson School and former managing director at Lehman Brothers; David Easley, Henry Scarborough Professor of Social Sciences, Cornell University Department of Economics; and Professor Elizabeth Sanders, Cornell University Department of Government. Andolina, who spoke first, framed the market environment that led up to the crisis, citing the low interest rates and angst about risk-taking that characterized the markets in 2001. Noting that the Bush administration has not done a good job of explaining the $700 billion bailout bill, Easley set out to clarify "why we need to do it," and to explain how the paralyzing effect that illiquidity and loss of confidence has had on Wall Street will affect everyone on Main Street. Sanders covered the financial crisis from a political perspective, providing an overview of the financial regulatory system created during the New Deal and dismantled beginning with President Reagan's administration in the 1980s.
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Market Chaos Unraveled

(left to right) Professors Maureen O'Hara, Bob Jarrow, and Doug Stayman.

SEPTEMBER 24, 2008 Professors Bob Jarrow and Maureen O'Hara and Senior Lecturer Rich Marin presented their interpretation of the current, unprecedented turmoil in the financial markets in a panel discussion moderated by Associate Dean Doug Stayman. Addressing a standing-room-only crowd in Sage Hall B09, plus an overflow audience in B08 via video, Jarrow set the stage by discussing the framework that led up to the crisis, O'Hara explained what's happening with credit markets and liquidity, and Marin addressed Wall Street as a model — what's broken and what's not.
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The Credit Crisis 18 Months On . . . and On?

SEPTEMBER 5, 2008 Maureen O'Hara, Robert W. Purcell Professor of Management and professor of finance, spoke about the credit crisis at the Johnson School's Recruiters symposium. In a clear, concise, one-half hour presentation, O'Hara gave an overview of where we are now in the ongoing credit crunch, what to expect next, and rounded up projections of what the final costs will be: "With the current cost totaling more than $500 billion, how much more is there to write off? Business Week estimates another $200 billion in the upcoming third quarter. The IMF estimates total losses of $975 billion when it is all over. And JP Morgan Chase estimates a final bill of $2 trillion." She goes on to discuss the fallout's impact on unemployment and inflation, and concludes her talk with a caution that "we still have a long way to go," but also offers a few bright spots: "We've seen some unexpected growth — we grew 3.3 percent in the second quarter of 2008; in the fourth quarter of 2007 we saw negative growth. We're seeing increased export growth. And the U.S. dollar is stronger."
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