http://knowledge.wharton.upenn.edu/ Knowledge@Wharton is an online resource that offers the latest business insights, information, and research from a variety of sources. Content includes analysis of current business trends, interviews with industry leaders and faculty, articles based on the most recent business research, book reviews, conference and seminar reports, and links to other websites. en-us Copyright (c) 2009 The Wharton School of the University of Pennsylvania http://www.wharton.upenn.edu/faculty/goldstein_itay.jpg http://www.wharton.upenn.edu/faculty/ 125 45 Wharton Faculty Research Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=2309&source=rss From California to Connecticut, the global recession has squeezed state finances, forcing many state governments to slash services, raise taxes or find unusually creative ways to close the gap. According to experts, the widespread budget shortfalls -- expected to continue through at least 2011 -- threaten to put a drag on the nation's economic recovery and undermine President Obama's stimulus plan. "The states aren't really playing the game like Obama hoped they would," says one Wharton finance professor. Wed, 05 Aug 2009 16:41:52 EST Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=2226&source=rss Securities prices are an important source of information that helps the government decide if it should intervene to rescue a struggling firm. But if investors expect government intervention, they might bid up the security's price to a level not warranted by the fundamentals. This "feedback loop" could prevent a company from getting help it desperately needs, according to research by Wharton professors Itay Goldstein and Philip Bond. They suggest a solution. Wed, 29 Apr 2009 14:19:24 EST Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=2196&source=rss The Obama administration aims to move $2 trillion in toxic assets off financial institutions' books by offering taxpayer-backed loans to hedge funds and other investors, trying to improve on earlier strategies that have failed to rekindle trading in securities backed by mortgages and other debt. The goal is to thaw the credit markets -- to get banks to lend money the economy needs to grow. Will it work? Experts have mixed views. Wed, 01 Apr 2009 17:13:39 EST Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=2195&source=rss On April 2, the Financial Accounting Standards Board is expected to vote on a proposal to relax a standard at the heart of the financial crisis -- mark-to-market accounting rules that require toxic assets to be carried on companies' books at fire-sale prices, based on recent trades of similar assets for far less than they would command in normal times. Many big banks say the crisis has been made worse by these rules. Not everyone agrees.   Wed, 01 Apr 2009 17:13:39 EST Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=2166&source=rss After a generation of increasingly relaxed regulation of the financial services sector, the very concept seems stunning: Nationalization of banks in Europe and the United States. But with many global banks still teetering on the brink of insolvency -- even after rescue efforts that have included multi-billion dollar infusions of capital and other forms of assistance -- a different view is emerging. A growing number of economists -- including, most recently, Alan Greenspan -- now argues that temporary government takeovers of the most deeply troubled institutions may be the only remaining solution. Wed, 18 Feb 2009 17:51:20 EST Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=2133&source=rss When a mutual fund hits a bump in the road, will investors quickly bail out? The answer can be important to operators of open-end mutual funds, which allow investors to redeem their shares at the close of trading on any given day. When skittish stakeholders cash out, fund managers may have to conduct costly and unprofitable trades to quickly raise redemption capital. A new paper co-authored by Wharton finance professor Itay Goldstein examines patterns in fund redemptions and suggests ways to mitigate the impact. Wed, 07 Jan 2009 16:53:55 EST Finance and Investment http://knowledge.wharton.upenn.edu/article.cfm?articleid=1939&source=rss When Bear Stearns collapsed in March, some insiders argued it was wrong to blame the firm's risky bets on mortgaged-backed securities. They had another culprit: malevolent traders working together in the upside-down world of short sales -- making money by knocking down Bear's stock. There has, however, been little academic research to explain the forces at work. Now Wharton finance professor Itay Goldstein and a colleague have shed some light on the process in a paper titled, "Manipulation and the Allocational Role of Prices." Wed, 16 Apr 2008 16:43:25 EST