TERRE HAUTE —
Reforms passed by Congress since the 2008 financial crisis do not contain measures to prevent a similar breakdown in the future, an Indiana State University professor told an international conference.
William Redmond, professor emeritus of marketing, presented “A Marketing Systems View of the U.S. Housing Crisis” at the recent Macromarketing Conference in Berlin. In his presentation, Redmond detailed the various industries that provide services to the housing market, and how several of them — particularly with regard to mortgages — impacted the housing bubble that led to the Great Recession.
“Prior to 2007, I had heard about subprime mortgages, and just assumed they were a very minor part of the mortgage market,” Redmond said. “Turns out there were hundreds of billions of dollars in them.”
He also said the Dodd-Frank Wall Street Reform and Consumer Protection Act, one of the most detailed pieces of legislation passed in the wake of the financial crisis, has not dealt with the variety of issues that led to the crisis.
“It may be hoped that the Federal Reserve takes it supervisory role in the banking system more seriously and proactively in the future — surely one seeks to avoid making the same mistake twice,” Redmond wrote in a report published with the conference proceedings. “Unfortunately, the Dodd Frank Finance Reform Act appears to offer little in the way of structural preventative measures against future abuses: The banks that were too-big-to-fail are now even bigger, leverage on collateralized debt has not been restricted, and many derivatives contracts and trading platforms remain far from transparent.”
Investment banks also influenced the housing crisis, as Redmond explained that investors demanded more securitized subprime mortgages since they yielded more than fixed-income investments.
“I think some people connected to the housing market have learned something” since the crisis, said Redmond, president of the international Macromarketing Society, which hosted the Berlin conference. “I’m not sure everybody has.”
The mortgage industry had previously served the function of determining which people could qualify for home loans, as financial institutions would typically deny home loans to people deemed a credit risk. However, subprime loans changed that.
“The demand for subprime securities by institutional investors was met by a further lowering of lending standards,” Redmond wrote. “In this way, the mortgage market was ceasing to perform its traditional gatekeeping function.”
The Macromarketing Conference is an annual event that features dozens — and sometimes more than 100 — presenters discussing topics from around the world. After Redmond gave the presentation, several attendees provided comments on how to improve his report, which he has since edited and intends to submit for journal publication this fall.
“One of the reasons I like to go to a conference before I send an article to a journal is you also get some ideas for improving it,” Redmond said. “That particular conference happens to be very good at that.”
He has faithfully attended the annual conference for more than two decades. He enjoys listening to some of the different presentations that focus on issues that can range from ethics to sustainability and other topics, such as his marketing analysis of the housing crisis on the US economy.
“The externalities generated by the financial system are just enormous, and so you get a crash in housing prices, unemployment and the country’s debts ballooning,” Redmond said. “It’s amazing how many people were affected by that.”
Business
ISU prof: Financial reform will not prevent crisis
‘Banks that were too-big-to-fail are now even bigger,’ professor writes in report
- Business
-
-
Business Cents: Customers and companies: Sugar goes further than vinegar
Working with companies for more than decade I am still shocked to learn how not only companies react to customers but also how rude customers can be to companies.
-
SOCIAL SECURITY: Can’t work because of disability? Let us help
Disability is something most people don’t like to think about. But if you’re not able to work because you have a disabling condition that is expected to last at least one year or result in death, then it’s a subject you may not be able to avoid.
-
Naysayers should treat good news as good news
I like to complain as much as anybody else. In truth, I may do more than my share of finding fault and wagging a finger in warning. Nonetheless, I’m tired of commentators (including many economists) who find nothing good and only the darkest clouds for the past few months.
-
All mothers appreciate extra help
Think of all the times and ways that your mom has helped you over the years — when you were a child, and after you became an adult. With Mother’s Day upon us, now is a good time to pay mom back with a little Extra Help — with her Medicare prescription drug costs.
-
Upcoming meetings
The Terre Haute Chamber of Commerce is hosting a health care reform seminar for businesses from 2 to 3:30 p.m. on Tuesday at Old National Insurance at 925 Wabash Ave., suite 200.
-
Indiana ranked best place to do business in Midwest
Indiana was ranked as the best place to do business in the Midwest and the fifth best nationwide in a survey of more than 500 chief executives by Chief Executive magazine.
-
First Farmers rated among top 100 community banks
First Farmers Bank & Trust of Converse was named one of the 100 top-performing community banks for 2012 by SNL Financial.
-
Newsmakers: May 12, 2013
Employer Support of the Guard and Reserve has recognized John Thompson, president of Thompson Thrift Construction, and Paul Thrift, president of Thompson Thrift Development, as “Patriotic Employers.”
-
On the Move: May 12, 2013
Stacey Joseph, a realtor in Terre Haute, has earned the Certified Residential Specialist designation by the Council of Residential Specialists, the largest not-for-profit affiliate of the National Association of Realtors.
-
Chamber lauds four with Business Recognition Awards
Congratulations to our Business Recognition Awards winners! Our Awards Luncheon at the Meadows Banquet and Conference Center was a great event to wrap up Business Recognition Week, sponsored by Union Hospital. At the Luncheon we recognized four local businesses as the 2012 Business Recognition Award winners:
-
ISU students provide detailed grocery analysis
As the National Cooperative Grocers Association makes business decisions in the coming years, the organization likely will take into account an analysis of some of its competitors – about 4,000 of them.
-
Construction firm holding grand opening in Marshall on Friday
Construction, H&H LLC is holding a grand opening and Marshall Chamber of Commerce ribbon cutting ceremony on Friday at 812 N. Second St. in Marshall, Ill.
-
AP Source: Subaru to expand Indiana plant
Subaru plans to expand its Indiana factory and add workers to build the Impreza small car in 2016, a person briefed on the matter says.
-
Transit proposals can prove to be game changers
After baseball, my favorite TV watching is the government channel. Here I can see the local government in action or local government inaction.
-
On the Move: May 5, 2013
Melissa Schollaert, RDH, HHP, has been added as a counselor of holistic health and nutrition at The Maple Center for Integrative Health.
-
ISU set to offer financial planning program in 2014
When Indiana State University junior Jennifer Groth began scheduling classes last semester, she planned them out by thinking of an academic program the university does not yet offer. Groth will be one of the inaugural students in the financial planning program that ISU will begin to offer in spring 2014.
-
Newsmaker: May 5, 2013
Gov. Mike Pence announced the appointment of Jessica Robertson to commissioner of the Indiana Department of Administration, a role she will begin on Wednesday.
-
U.S. Postal Service opens village office in Worthington
The U.S. Postal Service officially opened the 40th Village Post Office in the Greater Indiana District on Monday in Worthington.
-
How consistent is your business?
There are six areas in which consistency is critical in the majority of companies. Too often, business owners feel as they are “chasing down” rather than “leading it along.” If you can get a high level of consistency with your standards and practices, then your company will benefit.
-
Good time to try Spanish online service
Cinco de Mayo is May 5 — a time to celebrate Mexican heritage and pride. Why not join the celebration by visiting Social Security’s Spanish website, where you’ll find a number of useful services and a wealth of information in Spanish.
-
First Financial’s net income up 3 percent
First Financial Corp. has announced results for its quarter that ended March 31. The Corp.’s net income increased 3.4 percent to $7.7 million, compared to $7.4 million for the same period of 2012.
-
Curtain goes up on new theater owner
The Indiana Theatre in downtown Terre Haute is under new ownership with a new purpose.
-
Indiana Theatre SOLD!
The Indiana Theatre at 683 Ohio St. is sold.
Rob Lundstrom, who owns the Copper Bar and Louise’s, took possession of the historic downtown theatre on April 25. -
Higher education completion rates questioned
Spring is really here. Baseball is being played, the Cubs are already tragic and Faye of the Forest reappeared on the back deck. She was parked on the railing as I sat down to write this column.
-
Vectren Corp. awards $2.3 million in grants
Vectren Corp. has announced that it awarded more than $2.3 million in 2012 through the Vectren Foundation and corporate contributions.
-
Hard work, good attitude produces success
Like clockwork, Indiana State University graduate Joe Evelo regularly provides monthly updates to the first client he signed up when he started his financial investment career more than 35 years ago.
-
On the move: April 28, 2013
Old National Bank has promoted Howard Mills to vice president, mortgage loan originator.
-
Newsmakers: April 28, 2013
Lenise Kohlway of Spencer was presented with the WorkOne Achievement Award last week for overcoming several employment barriers and pursuing a better life for herself.
-
Ivy Tech offers free business counseling
The Ivy Tech Business and Entrepreneurial Services Center and the Terre Haute chapter of SCORE are offering free, confidential business counseling and low-cost high-impact training workshops to aspiring entrepreneurs and existing small business owners.
-
Social Security: Try this word puzzle challenge
In 1938 — only a couple of years after Social Security was signed into law — a depression-era, unemployed architect named Alfred Mosher Butts studied the front page of The New York Times to figure out how often each of the 26 letters was used. The result was a game he called Criss Cross Words, renamed 10 years later as Scrabble. In honor of Scrabble’s 75th anniversary, we’d like to challenge you to a word puzzle.
- More Business Headlines
-
Business Cents: Customers and companies: Sugar goes further than vinegar
Fatal Hot Air Balloon Accident in Turkey
Tornadoes, Storms Strike Midwest
Raw: Accused US Spy Reportedly Leaves Russia
'Babyland': Camp Lejeune's Toxic Legacy?
AP CEO: Records Seizure 'Unconstitutional'
Raw: Heavy Tornado Damage in Shawnee, Okla
Raw: Tornadoes Spotted in Kansas
Raw: Swarm of Tornadoes Slams Plains
Probe Begins After Conn. Commuter Trains Crash
Today in History for May 20th
RAW: TV Staff Take Cover From Tornado
Obama Exhorts Good Deeds by Morehouse Graduates
Raw: Driver Ejected From Truck, Over Bridge
Today in History for May 19th
Raw: Gun Scare Mars Cannes Film Festival
Coffee Run Leads to Hatchet Hitchhiker Arrest
Raw: Fierce Bombing in Qusair, Syria
NTSB Begins Investigation Into Conn. Train Crash
Lotto Fever Sweeps the Country
Winning Powerball Ticket Sold in Florida
RAW: Brad Paisley Forgets Lyrics To His Own Song
RAW: Russian dash cam catches car 20 feet in the air
New 'Anchorman 2' Trailer, Drake Joins List of Rumored Cameos
Couple Argues As Woman's Lover Crawls Out Window
Justin Bieber Gets Booed
Eva Longoria's Wardrobe Malfunction
Heat Star Dwyane Wade Surprises Coral Gables Teen At Prom
Steak n' Shake waitress scores huge tip
Singer Miguel Accidentally Lands on Fan At Billboard Music Awards
Celebs Celebrate the Rise of the Side Butt
Grizzly bear gets up close and personal with camera
Justin Bieber Gets Booed After Winning at the Billboard Awards
Singer forgets lyrics, makes up words to National Anthem
Who is $600M Powerball winner in Fla.?
Top 5 Plays of the Day
Sailor Surprises His Mom At Her CU Denver Graduation Ceremony
Twiggy, the Waterskiing Squirrel
Official: ‘Amazing’ No One Was Killed In CT Train Crash
