Friday, March 21, 2008

60-TNG Radio - David Berson 3-22-08

Bruce Norris is joined by former Chief Economist with Fannie Mae and current Chief Economist with PMI Group, David Berson. Bruce and David discuss what PMI Group does, mortgage insurance, risk lenders are no longer willing to take, the size and scope of PMI Group and its services, risk averse lenders and how it all changed, practices of lenders and pushing the credit envelope in cycles, unsustainable trends and the end of subprime, lenders passing loans through new vehicles not previously available, mortgage-backed securities and CDOs, portfolio lending, expansion of Fannie Mae and Freddie Mac and what the effects will be, investors and their assumption of risk for mortgage-backed securities, credit ratings and how they misled investors, the issue of looking backward and not forward, why pricing inflation saved the day, if the worst over, home sales and price stabilization, California in a recession, the economic signs of a recession, consumer spending, what happens if consumer spending dwindles, unemployment rates and its importance to the market, what happens if wages decline, Realtors and jobs in California, impact on bond insurers if ratings are lowered, separating muni bonds from subprime bonds, what happens when insurers go out of business, mortgage defaults, unanticipated price drops, when Fannie Mae started to be concerned, the national scope of price drops, Great Depression talk and if it’s exaggerated, raising loan limits for Fannie and Freddie, the FED and their solutions, moratorium on foreclosures, what signs to look for in a recovery, bond yield spreads and what they might say about interest rate moves by the FED, stagflation, and the percentage of housing market for employment.

As Chief Economist and Strategist, David Berson's responsibilities include domestic and global market research and planning, support of government relations and public policy, and strategic environmental planning. He also acts as a PMI spokesperson on topics related to global economic housing, and mortgage market conditions, prospects, and policy.

Berson comes to PMI from Fannie Mae, where he was Vice President and Chief Economist since 1989. At Fannie Mae Berson was responsible for advising the company on national and regional economic, housing, and mortgage policy and conditions, including forecasts and analyses of the economy, interest rates, and housing and mortgage finance markets. Berson was also a senior member of the corporate strategy group, where he provided alternative views and risk analyses based on economic and market changes.

Prior to Fannie Mae, Berson held senior management positions at Wharton Econometric Forecasting Associates overseeing domestic services, financial analysis, and modeling. As well, he has held several teaching positions at the University of Michigan, Claremont McKenna College, and Claremont Graduate School. Berson has published more than ten papers on the U.S. housing and mortgage markets.

Berson received a Ph.D. in economics and a M.P.P. in public policy from the University of Michigan, and a B.A. in history and economics from Williams College. He has a long history of civic activity and currently serves on the advisory board for the Middle Patuxent Environmental Area and the board of directors for Crossway Community, a transitional housing project for homeless families.

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