Areas of Expertise (7)
Lew Spellman is a finance professor specializing in financial markets and institutions at the McCombs School of Business. He has also taught at the LBJ School of Public Affairs, the UT School of Law, the University of California, Berkeley, and Stanford University.
Spellman teaches at both the graduate and undergraduate level with an emphasis on interpreting and analyzing current market and policy developments and market trends. His academic publications appear in the Journal of Finance, Journal of Financial and Quantitative Analysis, Journal of Money, Credit, and the Journal of Banking and Finance among others.
His experience outside of academics includes government service as Assistant to the Chairman of the US President's Council of Economic Advisors and Economist with the Federal Reserve Board. His published works primarily concern the market pricing of financial institution claims. Spellman's business interests include serving as Director and Chair for Investments, Magna Carta Insurance Company. Previously, he served as Chairman and CEO of Real Rate Financial and Electronic Exchange Technologies. He holds several U.S. patents related to inflation adjusting financial instruments including the inflation adjusting bond known as the Treasury TIPs.
He blogs monthly at TheSpellmanReport.com.
Stanford University: Ph.D., Economics 1971
Stanford University: M.A., Economics 1969
University of Michigan: MBA., Business Administration 1964
University of Michigan: BBA, Business Administration 1964
Media Appearances (8)
Commentary: New Cabinet, Trump’s regulatory policy can revive economy
To motivate that higher output when the Great Recession hit in 2008, borrowing rates were pushed down to a minimal level in the U.S. and a negative rate in the Euro zone. We (the lender) will pay you (the borrower) to borrow. So please do so, and please spend the funds on something to create output and jobs.
Trump’s Cabinet knows what it takes to succeed
Daily Times online
Borrowing costs are reduced to encourage more borrowing and more spending on investment products that yield positive returns. But if the private sector doesn’t snap up the bait, governments can step in to be both the borrower and spender.
Op-Ed: Hooray! Some of Trump’s Cabinet Picks Lack Experience in Government Work
"The world is watching as President Donald Trump lurches into motion, and for many, the early signs suggest a blend of hubris and incompetence that is creating chaos in the nation’s most elevated executive office."
The Keynesian Dead End: A Watershed Moment
The Spellman Report online
In the midst of the Great Depression, John Maynard Keynes set out in his book, The General Theory of Employment, Interest and Money, the idea — radical at the time — that a struggling economy benefits when governments borrow and spend.
Students My Be Affected by Government Hitting Debt Ceiling
The Daily Texan online
“If we blow past our credit limit and keeping on spending, in the short run, income is generated, but in the long run, the debt can’t be paid,” Spellman said. “It’s a sanity check to get us to understand the effect of short-term benefits of spending versus the long-term implications of having debt and to start thinking serious about these implications.”
High Noon at the D.C. Corral: The Debt Ceiling Showdown
Texas Enterprise | Big Ideas in Business online
“Businesses are so frightened they won’t do anything,” says Spellman. “Corporations’ accumulated cash on their balance sheets is at a record high, while they’re not spending on investment.”
Are Non-Bank Lenders Reshaping the Financial Landscape?
Austin American-Statesman online
Yet despite the optimistic signs, Spellman suggested traditional bank lending was on the front end of what would become a slow, inexorable decline. Non-bank lenders would secure an ever-increasing share of the market for business and consumer loans, the University of Texas finance professor said.
The Deficit Takes a Big Bite Out of Our Economy
Texas Enterprise | Big Ideas in Business online
Spellman pictures a worst-case scenario in which they’re no longer willing to buy U.S. Treasuries. “The real tipping point would be the day when Treasuries go to market Monday morning, and there’s a failed auction. No one wants to be the last man buying this stuff. Then you start to become Argentina.”
Sample Talks (1)
The Economy and Financial Markets: Yesterday, Today and Tomorrow
A four-part lecture series on the economy: 1) The Sinking of the Financial Titanic: What did it hit, why did it go down so quickly and can it happen again? 2) Why Economists Missed the Biggest Economic and Financial Disintegration since the Depression, 3) The Bailouts: The Solution or the Next Problem?, and 4) The Economic and Financial Morass: What is needed for a recovery?
- Workshop Leader
From "Real Estate Markets: Risks, Rewards, and the Role of Regulation," 42nd Annual Bank Structure Conference.
The announcement of a bank loan by a borrowing firm has been shown to have a positive effect on the market value of the borrower’s claims. This is consistent with a lender’s implied endorsement of the borrower––an endorsement that has value to the borrower. In this paper, we investigate whether the lender is able to extract a premium loan rate or certification premium in return. We find empirical evidence that in the absence of collateral reputable lenders are able to exact a certification premium.
Why does forbearance for insolvent banks occur? We offer an explanation based on stockholders' ability to appeal to the courts for reversal and monetary damages after the regulator has initiated a receivership action.