Making Sense of the Subprime Crisis

macroeconomics, subprime crisis, foreclosures, market, risk factors

Making sense of the subprime crisis

This paper explores the question of whether market participants could have or should have anticipated the large increase in foreclosures that occurred in 2007 and 2008. Most of these foreclosures stemmed from loans originated in 2005 and 2006, leading many to suspect that lenders originated a large volume of extremely risky loans during this period. However, the authors show that while loans originated in this period did carry extra risk factors, particularly increased leverage, underwriting standards alone cannot explain the dramatic rise in foreclosures. Focusing on the role of house prices, the authors ask whether market participants underestimated the likelihood of a fall in house prices or the sensitivity of foreclosures to house prices. The authors show that, given available data, market participants should have been able to understand that a significant fall in prices would cause a large increase in foreclosures although loan-level (as opposed to ownership-level) models would have predicted a smaller rise than actually occurred. Examining analyst reports and other contemporary discussions of the mortgage market to see what market participants thought would happen, the authors find that analysts, on the whole, understood that a fall in prices would have disastrous consequences for the market but assigned a low probability to such an outcome.Subprime mortgage

Effect of ELF e.m. fields on metalloprotein redox-active sites

The peculiarity of the distribution and geometry of metallic ions in enzymes pushed us to set the hypothesis that metallic ions in active-site act like tiny antennas able to pick up very feeble e.m. signals. Enzymatic activity of Cu2+, Zn2+ Superoxide Dismutase (SOD1) and Fe2+ Xanthine Oxidase (XO) has been studied, following in vitro generation and removal of free radicals. We observed that Superoxide radicals generation by XO is increased by a weak field having the Larmor frequency fL of Fe2+ while the SOD1 kinetics is sensibly reduced by exposure to a weak field having the frequency fL of Cu2+ ion.Comment: 18 pages, 4 figure

BOOST -- A Satellite Mission to Test Lorentz Invariance Using High-Performance Optical Frequency References

BOOST (BOOst Symmetry Test) is a proposed satellite mission to search for violations of Lorentz invariance by comparing two optical frequency references. One is based on a long-term stable optical resonator and the other on a hyperfine transition in molecular iodine. This mission will allow to determine several parameters of the standard model extension in the electron sector up to two orders of magnitude better than with the current best experiments. Here, we will give an overview of the mission, the science case and the payload.Comment: 11 pages, 2 figures, accepted for publication in Phys. Rev.

ATLAS RPC Cosmic Ray Teststand at INFN Lecce

We describe the design and functionality of the cosmic ray teststand built at INFN Lecce for ATLAS RPC quality control assurance.Comment: XXIV Physics in Collisions Conference (PIC04), Boston, USA, June 2004, 3 pages, LaTex, 2 eps figures. MONP0