The Public-Private Investment Program: The Legacy Loans Program (U.S. GFC)

On March 23, 2009, the U.S. Treasury, in conjunction with the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC), announced the Public-Private Investment Program (PPIP). PPIP consisted of two complementary programs designed to foster liquidity in the market for certain mortgage-related assets: The Legacy Loans Program and the Legacy Securities Program. This case study discusses the design and implementation of the Legacy Loans Program. Under this program, the FDIC and Treasury attempted to create public-private investment partnerships that—using a combination of private equity, Treasury equity, and FDIC-guaranteed debt—would purchase legacy mortgage loans from U.S. banks by way of FDIC-supervised auctions of them. Despite months of FDIC attempts to develop the program, it was never implemented. The program was criticized by many in the media and academic community for favoring the interests of private investors over those of taxpayers; government officials, however, have contended that these concerns were unfounded

The Public-Private Investment Program: The Legacy Securities Program (U.S. GFC)

On March 23, 2009, the U.S. Treasury, in conjunction with the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC), announced the Public-Private Investment Program (PPIP). PPIP consisted of two complementary programs designed to foster liquidity in the market for certain mortgage-related assets: The Legacy Loans Program and the Legacy Securities Program. This case study discusses the design and implementation of the Legacy Securities Program. Under this program, the Treasury formed an investment partnership with nine private sector firms it selected at the conclusion of a months-long application process. Using a combination of private equity and debt and equity from the Treasury, nine public-private investment funds (PPIFs) invested $24.9 billion in non-agency residential and commercial mortgage-backed securities (MBS), netting the government a positive return of$3.9 billion on its investment. While the program received mixed reviews from scholars, the private sector, and former government officials, it is seen as having contributed somewhat to the recovery of the secondary mortgage market

Lessons Learned: James B. Lockhart III

Insights from discussions with James B. Lockhart III, who was the Director (CEO) and Chairman of the Oversight Board of the Federal Housing Finance Agency (FHFA) upon the agency’s creation on July 30, 2008. Topics include the conservatorships of Fannie Mae and Freddie Mac as well as other elements of the Bush Administration\u27s 2008 crisis response activities

Lessons Learned: David Wessel

Wessel, an award-winning journalist for The Wall Street Journal, talks about some of the issues faced by the media in covering the crisis, discusses the many challenges policymakers faced when trying to communicate the government’s crisis-fighting strategy, and shares suggestions for improvement

The Auto Warranty Commitment Program (AWCP) in the U.S.

On March 30, 2009, President Obama announced a plan for government-funded protection of warranties on new vehicles sold by General Motors (GM) and Chrysler while they underwent restructuring. The initiative, which would become known as the Auto Warranty Commitment Program (AWCP), was intended to bolster consumer confidence by alleviating a major risk (the loss of warranty benefits) to consumers associated with the companies\u27 potential bankruptcies. Under the AWCP, GM and Chrysler established independent special purpose vehicles to which they transferred a combination of their own money and funding they received from Treasury in the form of a loan. The SPV then acted as an insurance fund, guaranteeing the availability of cash to respond to eligible warranty claims should either company fail or otherwise become unable to meet new claims on its own. The program closed on July 21, 2009, without either company\u27s SPV having been called into action. At the time of its announcement, the program received generally positive reviews from some in the industry and media, although there were concerns that the program would be more difficult to implement than the Administration had described

The Rescue of Fannie Mae and Freddie Mac – Module Z: Overview

In September 2008, as the financial crisis that had begun the previous year escalated, the US government appointed a conservator for two government-sponsored enterprises (GSEs), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), that dominated the secondary mortgage market and were among the largest participants in the global capital markets. The conservatorships were the hallmark of a multipart rescue plan intended to save the firms from insolvency and a disorderly collapse and required the combined and coordinated efforts of several government agencies and instrumentalities. Ultimately, the government invested $191.5 billion into the firms and deployed a range of tools to stabilize them; this intervention was one of the largest undertaken by the government during the Global Financial Crisis and significant for being one of the few nonbank rescues that occurred. This paper looks at the rescue in totality and the reasons underlying the government’s key decisions on a combined basis. The efforts are generally thought to have been successful in that the firms continued to operate with government funding, continued to support the secondary mortgage market, and losses to their many debt and MBS security holders in the US and abroad (which included many banks and other financial institutions) were avoided, although common and preferred shareholders did suffer losses. Yet, there has been substantial criticism of and legal challenge to some of the government’s actions pursuant to the intervention. More than 10 years later, the firms are still in conservatorship and the fundamental question of their troublesome hybrid structure has not been addressed

YPFS Lessons Learned Oral History Project: An Interview with James B. Lockhart III

Suggested Citation Form: Lockhart, James, 2018. “Lessons Learned Interview. Interview by Rosalind Wiggins, Dan Thompson, Alec, Buchholtz. Yale Program on Financial Stability Lessons Learned Oral History Project. June 14, 2018. Transcript. https://ypfs.som.yale.edu/library/ypfs- lesson-learned-oral-history-project-interview-james-lockhar

A novel approach to locate Phytophthora infestans resistance genes on the potato genetic map

Mapping resistance genes is usually accomplished by phenotyping a segregating population for the resistance trait and genotyping it using a large number of markers. Most resistance genes are of the NBS-LRR type, of which an increasing number is sequenced. These genes and their analogs (RGAs) are often organized in clusters. Clusters tend to be rather homogenous, viz. containing genes that show high sequence similarity with each other. From many of these clusters the map position is known. In this study we present and test a novel method to quickly identify to which cluster a new resistance gene belongs and to produce markers that can be used for introgression breeding. We used NBS profiling to identify markers in bulked DNA samples prepared from resistant and susceptible genotypes of small segregating populations. Markers co-segregating with resistance can be tested on individual plants and directly used for breeding. To identify the resistance gene cluster a gene belongs to, the fragments were sequenced and the sequences analyzed using bioinformatics tools. Putative map positions arising from this analysis were validated using markers mapped in the segregating population. The versatility of the approach is demonstrated with a number of populations derived from wild Solanum species segregating for P. infestans resistance. Newly identified P. infestans resistance genes originating from S. verrucosum, S. schenckii, and S. capsicibaccatum could be mapped to potato chromosomes 6, 4, and 11, respectively