"The Future of Financial Services”, organized by Capco and NYU-Poly Presenter: Allen Ferrell Greenfield Professor of Securities Law Harvard Law School June 16, 2011

1. The Future of Financial Regulation
The Post Crisis World of Finance Conference
June 16, 2011
Allen Ferrell
Greenfield Professor of Securities Law
Harvard Law School
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2. ABX Index
ABX.HEAAA Closing Prices since Jan 2007
110.000
105.000
100.000
95.000
90.000
85.000
80.000
75.000
70.000
65.000
60.000
55.000
50.000
7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/ 2
/
5 8
/ 2 8
/ 2 5
/ 9 3
/ 7 1 4 8 2 6 9
/ 3 6
/ 0 4
/ 8 1
/ 5 9 3 7 0 4 7
/ 1
2
/ 2 2
/ 3 2
/ 4 1
/ 5 1
/ 3
/ 1
/ 2
/ 1
/ 2
/ 8 2
/ 9 2
/ 0 1
/ 1 1
/ 2
/ 1
/ 2
/ 1
/ 2
/ 2 2
/
1 2 3 4 5 5 6 6 7 7 8 9 1 0 1 1 1 2 2 1 1 2
1 1 1 1 1
2006-1 AAA 2006-2 AAA 2007-1 AAA 2007-2 AAA
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3. CDS Spreads
Broker CDS Spreads
450
400
350
300
250
d
a
e
r
p
S200
150
100
50
0
7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8
0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/ 0
/
1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
/
1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6
1 1 1
Date
Lehman Brothers Merrill Lynch Morgan Stanley Citigroup Goldman Sachs JPMorgan Chase
Source:
[1] Bloomberg
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4. Housing Sales Data
Ye a r-O v e r-Ye a r P e r c e n t C h a n g e in E x istin g S in g le -F a m ily H o m e S a le s
1969 - 2008
6 0 .0 0 %
4 0 .0 0 %
2 0 .0 0 %
0 .0 0 %
-2 0 .0 0 %
-4 0 .0 0 %
-6 0 .0 0 %
9 9 0 1 2 3 4 5 6 7 8 9 0 0 1 2 3 4 5 6 7 8 9 0 1 1 2 3 4 5 6 7 8 9 0 1 2 2 3 4 5 6 7 8
6
- 6
- 7
- 7
- 7
- 7
- 7
- 7
- 7
- 7
- 7
- 7
- 8
- 8
- 8
- 8
- 8
- 8
- 8
- 8
- 8
- 8
- 8
- 9
- 9
- 9
- 9
- 9
- 9
- 9
- 9
- 9
- 9
- 9
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
-
n c v t p g l n y r r b n c v t p g l n y r r b n c v t p g l n y r r b n c v t p g l n
a e o c e u u
J u a p a e a e o c e u u
J u a p a e a e o c e u u
J u a p a e a e o c e u u
J u
J D N O S A J A M F J D N O S A J A M F J D N O S A J A M F J D N O S A J
M M M
A c t u a l S a le s % P re d ic t e d S a le s %
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5. Housing Futures
Historical CME Housing Futures ‐ Compsite Index
225
220
215
210
205
200
195
190
185
180
175
170
Aug‐06 Oct‐06 Dec‐06 Feb‐07 Apr‐07 Jun‐07 Aug‐07 Oct‐07 Dec‐07 Feb‐08 Apr‐08
Aug‐07 Nov‐07 Feb‐08 May‐08 Aug‐08
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6. Housing Prices
Year-Over-Year Change in Monthly Housing Prices
January 1969 - September 2008
20%
Statistically Significant Price Change
15%
10%
5%
0%
-5%
-10%
-15%
9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8
6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2
Note: Housing prices are a weighted average of the prices of Northeast (22%), Midwest (22%), West (28%), and South (28%).
Source: Housing prices used are Median Existing Single Family Home Prices retrieved from National Association of Realtors.
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