The Federal Home Loan Bank system : the "other" housing GSE.

Founded in 1932, the twelve Federal Home Loan Banks (FHLBs) have historically provided long-term funding to specialized mortgage lenders. But legislative changes in the wake of the 1980s’ thrift crises spurred the FHLBs to expand in both size and scope. For example, FHLB balance sheets now also include a substantial investment in mortgages and mortgage-backed securities, and the attendant interest rate risk has created financial and accounting difficulties at some of the FHLBs. ; Like Fannie Mae and Freddie Mac, the FHLB System is a government-sponsored enterprise that funds itself largely with federal agency debt obligations that investors perceive to be implicitly guaranteed by the U.S. government. This article identifies some differences in risk-taking incentives between the cooperatively owned FHLB System and investor-owned Fannie Mae and Freddie Mac. ; Cooperative ownership itself does not reduce FHLB risk-taking incentives because, unlike many mutuals, the FHLB System does not bundle its equity and debt claims. Also, the joint-and-several liability provision in the FHLBs’ consolidated debt obligations and a lack of equity market discipline may heighten FHLB risk-taking incentives. However, the FHLBs cannot avail themselves of equity-based managerial compensation, which create high-powered risk-taking incentives in investor-owned firms. Thus, it is unclear whether the FHLBs’ risk-taking incentives are necessarily weaker than Fannie Mae’s and Freddie Mac’s.Federal home loan banks

Framework Proposal for a US Upstream Greenhouse Gas Tax with WTO-Compliant Border Adjustments

Discussions regarding policies to limit greenhouse gas (GHG) emissions have been ongoing for decades, and GHG policies of various types have been implemented for years in many countries. In practice, countries that adopt GHG policies utilize a portfolio that typically includes a mix of standards, subsidies, mandates and price-based policies, each directed at particular economic sectors. In view of obvious inefficiencies and lack of synergies resulting from the portfolio approach, economists and many others have convincingly argued that setting a price on carbon—and other GHG emissions—using an economy-wide, upstream GHG tax would be the most effective and efficient policy to address GHG emissions. Its effectiveness stems from being able to cover all emissions from production and use of fossil fuels by applying the tax on producers of coal, oil, and gas resources at the mine mouth and wellhead before they are combusted, rather than dealing with actual emissions from millions of individual sources and actors throughout the economy. Its efficiency stems from allowing markets, rather than the political process, to identify and implement the most cost-effective steps to reduce emissions through decisions that affect current operations and purchases, and through decisions now about investment, research and development to invent and deploy more effective solutions to reduce future GHG emissions. Myriad issues must be addressed to design and approve legislation to implement an upstream, economy-wide GHG tax. This report does not address that galaxy of challenges and opportunities. Rather, assuming that an upstream GHG tax could be implemented, the report addresses the challenge of border adjustments for exports and imports in the context of a domestic upstream GHG tax, as described below. The domestic GHG tax could cause energy-intensive industries to shift production to countries without comparable pricing, resulting in “leakage” of GHG emissions that the domestic tax aims to prevent. By shifting production from the United States, the tax would also disadvantage domestic manufacturers, their employees, and the communities where they operate. Hence, the call by many to introduce border adjustments: through the imposition of equivalent GHG pricing on imported products from energy-intensive, trade-exposed (EITE) industries, and by providing rebates from the impact of the upstream tax on the cost of products exported by domestic producers. However, doing this has raised concerns about consistency with rules of the World Trade Organization (WTO). Here we propose a Framework for a US climate policy with border adjustments that are compatible with US obligations under WTO agreements. It is based on an upstream tax on GHG emissions with rebates for exports and charges on imports for products from EITE industries. A companion Compendium (forthcoming) provides additional details on implementing border adjustments with specific recommendations for 35 EITE industries. Proposed border measures are designed in a non-discriminatory fashion, with the intent and effect of reducing global GHG emissions. Therefore, the border adjustments proposed as part of the Framework will not give rise to any valid claims of WTO violations. Even if such claims should be raised, a strong defense could be made under the exceptions to the WTO rules

Fiber-optic chemical sensing with Langmuir-Blodgett overlay waveguides

Fiber-optic chemical sensing has been demonstrated with a side-polished single- mode optical fiber, evanescently coupled to chemically sensitive Langmuir- Blodgett (LB) overlay waveguides. The sensors exhibit a channel-dropping response centered on a wavelength that is dependent on the thickness and the refractive index of the overlay waveguide. It has been shown that pH-sensitive organic dyes proved to be suitable materials fur the formation of an overlay waveguide whereas LB deposition provides the required thickness control. A theoretical model of the sensor response, based on the Kramers-Kronig relations and phase matching of the guided modes within the optical fiber and overlay waveguide, shows good agreement with experimental results

The informational advantage of specialized monitors: the case of bank examiners

Large commercial banking firms are monitored by specialized private sector monitors and by specialized government examiners. Previous research suggests that bank exams produce little useful information that is not already reflected in market prices. In this article, we apply a new research methodology to a unique data set, and find that government exams of large national banks produce significant new information which financial markets do not fully internalize for several additional months. Our results indicate that specialized government monitors can identify value-relevant information about private firms, even if those firms are already actively followed by investors and their private-sector agents.Bank supervision ; Bank examination

A genetic algorithm for cocyclic hadamard matrices

A genetic algorithm for finding cocyclic Hadamard matrices is described. Though we focus on the case of dihedral groups, the algorithm may be easily extended to cover any group. Some executions and examples are also included, with aid of Mathematica 4.0

Plasma Physics

Contains reports on three research projects.U. S. Atomic Energy Commission (Contract AT(30-1)-1842