Assessing the effectiveness of the Paulson "teaser freezer" Plan: Evidence from the ABX indexEliana Balla, Robert Carpenter () and Breck L. Robinson Journal of Economics and Business, 2011, vol. 63, issue 5, 392-411 Abstract: How did investors holding assets backed by subprime residential mortgages react when Treasury Secretary Paulson announced the so-called "teaser freezer" plan to modify mortgages in December 2007? We apply event-study methodology to the ABX index, the only source of daily securities prices in subprime mortgage markets. Our results show that investors initially perceived that the Paulson Plan would improve conditions in subprime housing markets. Specifically, those investors who held the riskiest securities backed by subprime residential housing benefited the most from the Paulson Plan. These findings do not extend to the longer term, suggesting that any positive effects from Paulson Plan were overwhelmed by the continued deterioration in housing markets. Keywords: Mortgage; loan; modifications; ABX; index; Event; study (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:63:y:2011:i:5:p:392-411 Access Statistics for this article Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter More articles in Journal of Economics and Business from Elsevier |
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