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"Presented by Congressman Ron Paul at "The Failure of the Keynesian State," the Mises Circle in Houston, sponsored by Jeremy S. Davis. Recorded Saturday, 23 January 2010. Includes introductory remarks by Mises Institute president Douglas E. French, and by Institute founder and chairman Llewellyn H. Rockwell, Jr.."
"Feb. 3 (Bloomberg) -- In some Underground stations in London, you are repeatedly reminded to “Mind the Gap” as you enter and exit the train. The aim is to reduce injuries occasioned by a structural anomaly that results in a large gap between the platforms and the trains.read complete article : Bull Market Can’t Last If You Mind the Gap: Mohamed A. El-Erian - Bloomberg.comJudging from market valuations, I sense quite a gap between consensus market expectations and key political and economic realities, especially in the U.S. If the gap isn’t bridged by the validation of the more optimistic expectations, investors may well find that January’s global equity sell-off was just a precursor to a disappointing year for several asset classes, including stocks. "
Labels: finance
"The most complete online offering of the literature of the Austrian School and libertarian ideas, including books, journal articles, and other writings, sorted by any method you choose" http://mises.org/literature.aspxread complete article : Literature :: Mises Institute
"Common Sense Economics, by L. Albert Hahn. Here is an excellent presentation of the Austrian Theory of the Business Cycle, which Hahn in his day (40s and 50s) regarded as common sense as compared with the wacky and upside down world of countercyclical policy. He is extremely articulate here, following up on Hayek's triangles and foreshadowing Garrison. This is a treasure - yesterday impossible to find and today everywhere at once. It reads like it was written last week.read complete article : Wonderful books added to literature - Jeffrey Tucker - Mises Economics BlogWe also have:
Compulsory Medical Care and the Welfare State, by Melchior Palyi
Studies in Economic Nationalism, by Michael A. Heilperin (similarly obscure but also great)
The Gold Standard and Its Future, by T.E. Gregory (a Rothbard favorite)
Money: It's Connexion with Rising and Falling Prices, by Edwin Cannan (part of a campaign to unleash Cannan on the world)
Wealth: A Brief Explanation of the Causes of Economic Welfare, by Edwin CannanProperty in a Human Economy, ed. Samuel L. Blumenfeld (some outstanding pieces here)
Risk, Uncertainty, and Profit, by Frank H. Knight (amazing that we didn't have this up already)
Tariffs: A Study in Method, T.E.G. Gregory "
Labels: finance
"Success at both investing and gambling, it turns out, has much to do with controlling emotions. And playing a little poker can help you recognize emotional traps that endanger your most important stack of chips -- your portfolio.read complete article : Poker has lessons for investors - washingtonpost.comThe psychological issues that drive investing and gambling decisions are "identical," says Andrew Lo, director of Massachusetts Institute of Technology's Laboratory for Financial Engineering.
Five common issues:….."
… 1) Greed, 2) overconfidence, 3) regret, 4) seeing patterns, 5) holding losers
Labels: finance
"THIS is bonus season in the financial world. That means, of course, that it is bonus-bashing season everywhere else. The righteously outraged have no shortage of arguments on their side, from the mind-boggling size of the bonuses to the fact that the banks were recently rescued with public money. But if they want to mix a bit of theory with their spleen they now have a book to help them: Daniel Pink’s “Drive: The Surprising Truth About What Motivates Us”. It seems that bankers are not just slaves to greed. They are also slaves to a discredited management theory: the idea that the best way to motivate people is to use performance-related rewards."read complete article : Schumpeter: Driven to distraction | The Economist
Labels: finance
"The psychological issues that drive investing and gambling decisions aren’t merely similar. They are “identical,” says Andrew Lo, director of the Massachusetts Institute of Technology Laboratory for Financial Engineering and one of the leaders in the field of behavioral finance (listen to our podcast with Lo). It’s easy to find investment professionals and professional poker players who agree. Says poker pro Daniel Negreanu, who holds four World Series of Poker bracelets and two World Poker Tour Championship titles: “Having emotional stability and emotional control is key to both investing and poker."read complete article : How Poker Can Make You a Better Investor - Kiplinger.com
Labels: finance
"Listen in as Senior Editor Bob Frick interviews Director of MIT's Laboratory for Financial Engineering. Andrew gives investors a little insight on how to manage their emotions in this post-crash environment."read complete article : Your Mind, Your Money: How to Avoid Bubbles - Kiplinger.com Podcast
Labels: finance
read complete article : My Investing Notebook: (Video) The Card Game: The Wizards of Consumer Lending
Labels: finance
read complete article : Online poker study: The more hands you win, the more money you lose"A new Cornell study of online poker seems counterintuitive: The more hands players win, the less money they're likely to collect - especially when it comes to novice players.
The likely reason, said Cornell sociology doctoral student Kyle Siler, whose study analyzed 27 million online poker hands, is that the multiple wins are likely for small stakes, and the more you play, the more likely you will eventually be walloped by occasional - but significant - losses.
This finding, Siler said, "coincides with observations in behavioral economics that people overweigh their frequent small gains vis-à-vis occasional large losses, and vice versa." In other words, players feel positively reinforced by their streak of wins but have difficulty fully understanding how their occasional large losses offset their gains.
The study, which was published online in December in the Journal of Gambling Studies and will be published in a forthcoming print edition later this year, also found that for small-stakes players, small pairs (from twos to sevens) were actually more valuable than medium pairs (eights through jacks)."
read complete article : Mises Audio/VideoEconomic Thought Before Adam SmithIntroduction Various Artists Economic Thought Before Adam Smith"
Acknowledgements Various Artists Economic Thought Before Adam Smith
1. The First Philosopher-Economists: the Greeks
1. The First Philosopher-Economists: the Greeks (continued)
The First Philosopher-Economists: the Greeks Various Artists Economic Thought Before Adam Smith
2. The Christian Middle Ages (continued)
The Christian Middle Ages Various Artists Economic Thought Before Adam Smith
3. From Middle Ages to Renaissance
3. From Middle Ages to Renaissance (continued)
From Middle Ages to Renaissance Various Artists Economic Thought Before Adam Smith
4. The Late Spanish Scholastics
4. The Late Spanish Scholastics (continued)
The Late Spanish Scholastics Various Artists Economic Thought Before Adam Smith
5. Protestants and Catholics (continued)
5. Protestants and Catholics (continued)
Protestants and Catholics Various Artists Economic Thought Before Adam Smith
"THE effect of free money is remarkable. A year ago investors were panicking and there was talk of another Depression. Now the MSCI world index of global share prices is more than 70% higher than its low in March 2009. That’s largely thanks to interest rates of 1% or less in America, Japan, Britain and the euro zone, which have persuaded investors to take their money out of cash and to buy risky assets.read complete article : Markets: Bubble warning | The EconomistFor all the panic last year, asset values never quite reached the lows that marked other bear-market bottoms, and now the rally has made several markets look pricey again. In the American housing market, where the crisis started, homes are priced at around fair value on the basis of rental yields, but they are overvalued by almost 30% in Britain and by 50% in Australia, Hong Kong and Spain."
Labels: finance
read complete article : FT.com / FTfm / Columnists - More respect for behavioural studies"From now on, the asset management industry is going to have to take more account of risk, according to the responses to FTfm in its informal survey of the industry. “The most important lesson is about managing risk”; “the crisis has highlighted the importance of managing risk in asset management, regardless of its nature”; “risk has to go back to the heart of the investment approach of a solid investment manager” – these are typical comments from the chief executives, chief investment officers and consultants who pondered the lessons of the past decade and forecast the challenges of the next for us.
..
As John Belgrove of Hewitt Associates said in our survey, “behavioural finance disciplines are likely to become more dominant, respected and better developed” in the coming decade. Better developed is important, because in spite of the Nobel Memorial prize for economics awarded in 2002 to Daniel Kahneman (a psychologist), behavioural finance is still not sufficiently developed for it to be properly integrated with market theory."
Labels: finance
read complete article : Financial Advice Causes 'Off-loading' In The Brain"ScienceDaily (Mar. 27, 2009) — A study using functional magnetic resonance imaging (fMRI) shows that expert advice may shut down areas of the brain responsible for decision-making processes, particularly when individuals are trying to evaluate a situation where risk is involved."
Journal Reference:
Engelmann et al. Expert Financial Advice Neurobiologically 'Offloads' Financial Decision-Making under Risk. PLoS ONE, 2009; 4 (3): e4957 DOI: 10.1371/journal.pone.0004957
"This paper presents a simultaneous assessment of the relationship between economic performance and three groups of economic reforms: domestic finance, trade, and the capital account. Among these, domestic financial reforms, and trade reforms, are robustly associated with economic growth, but only in middle-income countries. In contrast, we do not find any systematic positive relationship between capital account liberalization and economic growth. Moreover, the effect of domestic financial reforms on economic growth in middle-income countries is explained by improvements in measured aggregate TFP growth, not by higher aggregate investment. We present evidence that variation in the quality of property rights helps explain the heterogeneity of the effectiveness of financial and trade reforms in developing countries. The evidence suggests that sufficiently developed property rights are a precondition for reaping the benefits of economic reform. Our results are robust to endogeneity bias and a number of alternative specifications."read complete article : Growth and Structural Reforms: A New Assessment
Labels: finance
"Over a fifth of parents admit to borrowing money from their children’s savings accounts, according to a new study.read complete article : FT.com / Banking & Savings - Parents borrow from their children’s savingsEngage Mutual Assurance, the child trust fund provider, says the majority of parents surveyed blame the recession for their gloomy financial outlook, forcing some to use their children’s savings to support day-to-day expenses.
Of the parents who borrow from their children, 44 per cent take out between £200 and £500 for up to five months, though 30 per cent say they “feel incredibly guilty” about doing so, the research found.
Although the majority plan to pay back the money once financial circumstances improve, Engage Mutual said the figures underscore the desperate reality many parents face as they resort to using their children’s savings as the last alternative.
Two thirds of parents say they have no other option"
a research paper on monetary happiness and pain that I wrote in 2009. The paper is broken into three parts:
1) Breadth component that synthesizes pre-twentieth century works in philosophy and psychology regarding man's behavior, such as acts of happiness, sadness, selfishness, greed, power, and interaction.
with society, through the works of Descartes, Hume, Berkeley, Locke, Freud, Jung, and Adler.
2) Depth component that focuses on modern recent academic development in the medical field of neuroscience and social behavioral fields within finance (behavioral finance) with regard to individuals' decision making, acts of greed and guilt, as well as judgment ability during gambling, and any risk-taking games.
3) Application component that takes modern facts and dramatic events of financial fraud, financial ignorance, Ponzi Schemes, and overall victimization from financial fraud that many times results in trauma, stress, and suicide.
Author: Francesca Bastagli
Series: Working Paper # 60
Download: http://www.ipc-undp.org/pub/IPCWorkingPaper60.pdf
| Alongside other initiatives in the area of social assistance, the adoption of conditional cash transfers (CCTs) represents an opportunity to develop inclusive social policy. At the same time, particular CCT features risk promoting the further residualisation and fragmentation of safety nets. Drawing on the experience of six countries in Latin America, this paper identifies the variations and recent trends in CCT parameter design and implementation. It then considers the contribution of CCTs to the potential transition from a largely absent or minimal safety net to a coordinated system of social policies. |
Labels: finance
“Todd Maclin, CEO of Commercial banking at JPMorgan Chase & Co, discusses the changing landscape of financial services in this lecture to an audience at the Anderson School of Management at UCLA in October 2009. Series: UCLA Anderson School of Management Distinguished Speaker Series [12/2009] [Business] [Show ID: 17609] “
Labels: finance
"Steven Fraser, a professor of American studies at Columbia University, has taught the cultural history of Wall Street for years, usually bringing his students up to the 1990s. But this fall, with the financial crisis providing an irresistible new coda to the course, he extended the timeline to include the drama, intrigue and pain of the past two years."
read complete article : Economic Crisis Is on Curriculum at Columbia and Elsewhere - NYTimes.com
Labels: education, finance, united states
by Olivier Blanchard Marianna Riggi: "In the 1970s, large increases in the price of oil were associated with sharp decreases in output and large increases in inflation. In the 2000s, even larger increases in the price of oil were associated with much milder movements. This column attributes the difference in the US to more flexible labour markets and more credible monetary policy during the Great Moderation."read complete article : The price of oil and the macroeconomy | vox - Research-based policy analysis and commentary from leading economists
Labels: finance, middle east, united states, world
Summary: The paper analyzes the U.A.E.'s liquidity management framework in the context of the 2008 global financial crisis and the measures taken by the Central Bank of the U.A.E. to ease liquidity pressures in the second half of 2008. Drawing also on an empirical analysis of data for 15 U.A.E. banks through end-2008, the paper emphasizes the importance of making available to banks additional instruments to manage their liquidity as well as to strengthen the monitoring of a more comprehensive set of liquidity risk indicators. As regards the former, the paper discusses the merits and scope for the U.A.E. to introduce a domestic bond market.
http://www.imf.org/external/pubs/cat/longres.cfm?sk=23419.0
Regards,
Tarek Hoteit
http://tarek.hoteit.org
Labels: finance
Adrian Blundell-Wignall discusses the origins of the financial crisis and requirements for reform at the New America Foundation:
"What caused the global financial crisis, and what direction should the policy reform agenda take? Why did residential mortgage-backed securities and credit default swaps explode from around 2004?
Adrian Blundell-Wignall, Deputy Director for Financial and Enterprise Affairs at the OECD, addresses these questions in his article "Origins of the Financial Crisis and Requirements for Reform," recently published in the Journal on Asian Economics. Please join the OECD and New America for a discussion of some of the new problems that are beginning to emerge as a result of the policies being used to deal with the crisis. "
Labels: finance
"Abstract:read complete article : SSRN-The Promise (and Limits) of Neuroeconomics by Jedediah Purdy
Neuroeconomics - the study of brain activity in people engaged in tasks of reasoning and choice - looks set to be the next behavioral economics: a set of findings about how people make decisions that casts both light and doubt on widely accepted premises about rationality and social life. This essay explains what is most exciting about the new field and lays out some specific research tasks for it.
By enabling researchers to view the mind at work, neuroeconomics calls into question the value of a methodological premise of twentieth-century empiricism, sometimes called positivism or behaviorism: that people are black boxes to one another, and scientific social inquiry must observe only their objective behavior, what they say and do. This premise came to the center of neoclassical economic method via the 1930s work of the economist Lionel Robbins, and it occasioned a methodological split in social inquiry. Positivists (most importantly, economists) follow the strictures of studying observable behavior, while interpretivists insist that we cannot understand social life without interpreting the minds and intentions of others, even though we cannot view them directly.
The limits of these two methods have restricted progress in understanding three critical issues for legal scholarship: 1) how people solve collective-action problems, 2) why some people are more susceptible than others to extremist political appeals, and 3) whether "commodification" creates a conflict between economic rationality and other values. I show how the progress already made in neuroeconomics could make each of these questions more tractable than it has recently seemed, with potentially significant payoffs.Accepted Paper Series "
Labels: finance
"Abstract:read complete article : SSRN-On an Evolutionary Foundation of Neuroeconomics by Burkhard Schipper
Neuroeconomics focuses on brain imaging studies mapping neural responses to choice behavior. Economic theory is concerned with choice behavior but it is silent on neural activities. We present a game theoretic model in which players are endowed with an additional structure - a simple nervous system - and interact repeatedly in changing games. The nervous system constrains information processing functions and behavioral functions. By reinterpreting results from evolutionary game theory (Germano, 2007), we suggest that nervous systems can develop to function well in exogenously changing strategic environments. We present an example indicating that an analogous conclusion fails if players can influence endogenously their environment. "
Labels: finance
"Since the assassination of prime minister Rafiq Hariri Lebanon faced many obstacles from economic to political and we've been through two wars. Summer 2008 the world's economy collapses and the once most powerful cities and countries are now having major economic problems. The price of Real estates went down, in Lebanon it became more expensive here are the reasons given to us by Violette Balaa an Economist "
New items in your series of interest:
* Working Paper No. 09/258: Institutional Factors and Financial Sector Development: Evidence from Sub-Saharan Africa
Author/Editor: Anayiotos, George C.; Toroyan, Hovhannes
Summary: The paper assesses the effects of certain institutional factors on financial sector development in Sub- Saharan Africa (SSA). Data Envelopment Analysis (DEA) is applied to determine the extent to which these institutions affect the financial sector, and to suggest which institutions play a more critical role in each country. Results suggest that institutional factors affect financial depth and access to financial services more than asset quality and profitability (measured by nonperforming loans (NPL) and return on equity (ROE). The results also suggest that depth of credit information has the strongest influence on the NPL ratio, and political stability affects access the most. Based on model findings, policy implications on prioritizing institutional reforms to enhance financial sector development are suggested for individual countries and for country groups.
http://www.imf.org/external/pubs/cat/longres.cfm?sk=23418.0
* Working Paper No. 09/259: From Lombard Street to Avenida Paulista: Foreign Exchange Liquidity Easing in Brazil in Response to the Global Shock of 2008-09
Author/Editor: Stone, Mark R.; Walker, W. Christopher; Yasui, Yosuke
Summary: The provision of foreign exchange liquidity by emerging market central banks during the global shock of 2008-09 departs from the domestic liquidity lender of last resort role described by Bagehot in his classic "Lombard Street." This paper documents and analyzes the foreign exchange liquidity providing measures of the Banco Central do Brasil (BCB) in response to varied market stresses. These measures appear to have reduced the relative onshore cost of dollar liquidity on impact and seemed to stabilize market expectations of exchange rate volatility. The results suggest that foreign exchange liquidity easing operations may become a standard central bank tool.
http://www.imf.org/external/pubs/cat/longres.cfm?sk=23417.0
* Working Paper No. 09/260: Improving Surveillance Across the CEMAC Region
Author/Editor: Iossifov, Plamen; Kinoshita, Noriaki; Takebe, Misa; York, Robert C.; Zhan, Zaijin
Summary: In this paper, we consider the design of the surveillance, and, in particular, the fiscal criteria in the Central African Economic and Monetary Community (CEMAC) with the view to ensuring they are consistent with internal and external sustainability. This consistency is important within a monetary union because fiscal policy is the primary instrument through which national governments can influence macroeconomic performance. We comment on how surveillance might be improved by broadening the region's current criteria through alternative fiscal indicators, some focus on the scope and nature of external shocks, and attention to the consistency of policies in assuring the viability of the union and its fixed exchange rate regime.
http://www.imf.org/external/pubs/cat/longres.cfm?sk=23421.0
***************************************************************
Join the discussion at the IMF's new policy Blog on the global economy: http://blog-imfdirect.imf.org/
TAKE A LOOK: For tracking globalization and its impact on individual economies, please see the new IMF Survey magazine online at http://www.imf.org/external/pubs/ft/survey/so/home.aspx News, views, and analysis from the IMF.
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Regards,
Tarek Hoteit
http://tarek.hoteit.org
Labels: finance
"Saudi Arabia's annual revenue from organizing pilgrimage to Islamic holy places tops $30 billion, an Arab newspaper reported on Sunday.read complete article : Saudi's annual revenue from pilgrimage tops $30 billion - paper | Top Russian news and analysis online | 'RIA Novosti' newswire"The figure covers travelling, accommodation and living expenses, as well as cost of animals for sacrifices," Gulf News, based in the United Arab Emirates, said.
According to the paper, the average cost of sacrificed animals averages $130 per pilgrim. Other expenses include purchases of gifts and spending on telecommunications.
Over two million Muslims have been visiting Mecca, Medina and other holy places in Saudi Arabia every Hajj season in recent years. Millions of Muslims also perform Umrah or "little pilgrimage" throughout the year, the paper said.
Saudi Arabia's revenues from pilgrimage to Islamic holy places account for about 7% of the country's gross domestic product, Gulf News said.
ABU-DHABI, November 29 (RIA Novosti) "
Labels: finance, middle east
"DUBAI — Dubai ruler Sheikh Mohammad bin Rashed al-Maktoum, who put his desert emirate onto the world map with a rapid development drive, now faces a debt crisis that could wreck his dream.read complete article : AFP: Dubai ruler's dream turns to debt nightmareJust two weeks after he vowed that Dubai will go ahead with its ambitious development projects, its main state-owned firm announced on Wednesday that it wants to halt debt repayments for six months."
Labels: finance, middle east
"Nov. 20 (Bloomberg) -- Brandon Adams, who teaches behavioral finance at Harvard University’s Department of Economics, says some of the best candidates for Wall Street trading jobs are the professional card players at FullTiltPoker.com and similar Web sites.read complete article : Harvard Poker Pro Says Texas Hold ‘Em Can Teach Traders to Fold - Bloomberg.com“They’ve essentially been the survivors in the system, a very difficult system where 95 percent of people lose money,” the 30-year-old Adams, who plays at the site, said in a telephone interview. “Anyone smart enough and disciplined enough to survive that system is probably going to do very well in the trading world.”"
Labels: finance
" http://www.pbs.org/nbr/site/features/...
PBS Airdate: November 24, 2009
Dr. Gregory Berns discusses his personal applications of behavioral finance and explores related ideas in further detail. Stay tuned for further segments from NBRs Your Mind and Your Money series designed to help investors make better investment decisions.
For more information visit:
http://www.pbs.org/nbr/site/features/special/mind_and_money/
Labels: finance
" ABSTRACT
We examine the evidence on episodes of large stances in fiscal policy,
both in cases of fiscal stimuli and in that of fiscal adjustments in OECD
countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more
likely to increase growth than those based upon spending increases. As for
fiscal adjustments those based upon spending cuts and no tax increases are
more likely to reduce deficits and debt over GDP ratios than those based upon
tax increases. In addition, adjustments on the spending side rather than on
the tax side are less likely to create recessions. We confirm these results with
simple regression analysis. "
download article "Large+changes+in+fiscal+policy_October_2009.pdf (application/pdf Object)
Labels: finance
read complete article : Regional and State Employment and Unemployment Summary"Regional and state unemployment rates were generally little changed or higher in October. Twenty-nine states and the District of Columbia recorded over-the-month unemployment rate increases, 13 states registered rate decreases, and 8 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia. The national unemployment rate rose to 10.2 percent in October, up 0.4 percentage point from September and 3.6 points from October 2008.
In October, nonfarm payroll employment increased in 28 states and the District of Columbia, decreased in 21 states, and remained unchanged in 1 state. The largest over-the-month increase in employment occurred in Texas (+41,700), followed by Michigan (+38,600), California (+25,700), North Carolina (+12,100), and Pennsylvania (+10,600). Michigan experienced the largest over-the-month percentage increase in employment (+1.0 percent), followed by the District of Columbia (+0.8 percent), Montana (+0.7 percent), Oklahoma (+0.6 percent), and Utah (+0.5 percent). The largest over-the-month decrease in employment occurred in New York (-15,300), followed by Florida (-8,500), Georgia (-7,500), Virginia (-7,100), and South Carolina (-5,800). Wyoming (-0.9 percent) experienced the largest over-the-month percentage decrease in employment, followed by Idaho and Nevada (-0.4 percent each), and South Carolina (-0.3 per- cent). Over the year, nonfarm employment decreased in all 50 states and in- creased in the District of Columbia. The largest over-the-year percentage de- creases occurred in Arizona (-6.9 percent), Michigan (-6.4 percent), Nevada (-6.0 percent), Georgia (-5.6 percent), and Wyoming (-5.5 percent)."
Labels: finance, united states
"BEIRUT: The Fraser Institute’s annual Index of Economic Freedom in the Arab World ranked Lebanon in second place in 2009 among 15 Arab countries included in the survey, up from fifth place in 2008 and fourth place in 2007, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group. The index measures the degree of economic freedom in each country on the basis of 18 variables divided into five broad factors of economic freedom."read complete article : The Daily Star - Business Articles - Lebanon ranks second in Arab world in economic freedom
Labels: finance, lebanon, middle east
"BEIRUT: Figures released by the central bank of Lebanon show that the number of credit and debit cards issued in Lebanon reached 1.61 million cards at the end of September 2009, constituting a 1.3 percent decrease from end-June 2009, a 2.7 percent rise in the first 9 months of the year and a 4.2 percent rise on a yearly basis, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group. Resident cardholders accounted for 97.2 percent of total cards issued in Lebanon."read complete article : The Daily Star - Business Articles - Number of credit, debit cards reach 1.6 million in Lebanon
read complete article : Money Trickles North as Mexicans Help Relatives - NYTimes.com"MIAHUATLÁN, Mexico — During the best of the times, Miguel Salcedo’s son, an illegal immigrant in San Diego, would be sending home hundreds of dollars a month to support his struggling family in Mexico. But at times like these, with the American economy out of whack and his son out of work, Mr. Salcedo finds himself doing what he never imagined he would have to do: wiring pesos north.
Unemployment has hit migrant communities in the United States so hard that a startling new phenomenon has been detected: instead of receiving remittances from relatives in the richest country on earth, some down-and-out Mexican families are scraping together what they can to support their unemployed loved ones in the United States. "
Labels: finance, united states, world
UChannel: " Alan Greenspan, President, Greenspan Associates LLC; Former Chairman, Federal Reserve Board
Presider: Peter G. Peterson, Founder and Chairman, Peter G. Peterson Foundation; Chairman Emeritus, Council on Foreign Relations
(Oct 15, 2009 at the Council on Foreign Relations. C. Peter McColough Series on International Economics) "
Labels: finance
"Abstract:read complete article : SSRN-A Survey of Behavioral Finance by Nicholas Barberis, Richard Thaler
Behavioral finance argues that some financial phenomena can plausibly be understood using models in which some agents are not fully rational. The field has two building blocks: limits to arbitrage, which argues that it can be difficult for rational traders to undo the dislocations caused by less rational traders; and psychology, which catalogues the kinds of deviations from full rationality we might expect to see. We discuss these two topics, and then present a number of behavioral finance applications: to the aggregate stock market, to the cross-section of average returns, to individual trading behavior, and to corporate finance. We close by assessing progress in the field and speculating about its future course"
Labels: finance
"(Reuters) - When it comes to managing the business cycle, Keynesian and laissez-faire economics have failed rather spectacularly, their prescriptions leading to increasingly violent bubbles and busts. For this reason there have been calls for a 'new economics.' To get there, perhaps we just need to rediscover forgotten economists like Hyman Minsky and Ludwig von Mises."read complete article : COLUMN-For 'new economics' look to old economists: Rolfe Winkler - Forbes.com
Labels: finance
" Social issues have never taken up so much corporate and CEO attention since the world wars.Income inequalities, public health, labour unrest, climate change, poverty, ethics, values, the role of business ... all that kind of thing.read complete article : World Economic Forum India Summit to ponder over social issues- Special Report-The Sunday ET-Features-The Economic Times
Suddenly, corporate social responsibility has come to acquire a brand new meaning. It’s not about the Gates Foundation any more, it’s about bankers bonuses. It’s about climate change, green technology, social justice. Developmental and behavioural economics is edging out the discredited mathematical and pure market economics. "
Abstract:
"We review recent developments in neuroeconomics and their implications for economics. The paper consists of six sections. Following the Introduction, the second section enumerates the different research methods that neuroscientists use evaluates their strengths and limitations for analyzing economic phenomena. The third section provides a review of basic findings in neuroscience that we deemed especially relevant to economics, and proposes a two-dimensional dichotomization of neural processes between automatic and controlled processes on the one hand, and cognitive and affective processes on the other. Section four reviews general implications of neuroscience for economics. Research in neuroscience, for example, raises questions about the usefulness of many economic constructs, such as 'time preference' and 'risk preference'. It also suggests that, contrary to the assumption that humans are likely to possess domain-specific intelligence - to be brilliant when it comes to problems that the brain is well evolved for performing and flat-footed for problems that lie outside of the brains existing specialized functions. Section 5 provides more detailed discussions of four specific applications: intertemporal choice, decision making under risk and uncertainty, game theory, and labor-market discrimination. Section 6 concludes by proposing a distinction between two general approaches in applying neuroscience to economics which we term 'incremental' and 'radical'. The former draws on neuroscience findings to refine existing economic models, while the latter poses more basic challenges to the standard economic understanding of human behavior."
Download: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=590965
read complete article : Press Release: SEC Launches Investor.gov; 2009-224; Oct. 22, 2009“Agency's First-Ever Web Site Devoted Exclusively to Investor Education
Washington, D.C., Oct. 22, 2009 — The Securities and Exchange Commission today launched its first-ever Web site devoted exclusively to investor education, providing investors with in-depth information and "top tips" on how to invest wisely, plan for the future, and avoid being scammed.
By visiting www.investor.gov, investors can access information in a user-friendly format that is specifically tailored to their needs. The site includes sections specifically for those just getting started investing, for those saving for a child's education, and for those planning for retirement. It also has a detailed "Seniors Care Package" section for senior citizens and caretakers."
Labels: education, finance, united states
Author/Editor: Loko, Boileau; Diouf, Mame Astou
Summary: This paper studies the main determinants of total factor productivity (TFP) growth using principal component analysis and a dynamic panel data model and, through a case study, explores key areas where accelerated reforms in the Maghreb countries would boost TFP gains. The results reveal that reforms targeted at attracting foreign direct investment and rationalizing government size, shifting resources from low-productivity sectors to higher ones, and encouraging women to enter the work force, could accelerate TFP gains. Equally important are reforms aimed at strengthening human capital, increasing the volume of trade, and improving the business environment.
Author/Editor: Christiansen, Lone Engbo; Prati, Alessandro; Ricci, Luca Antonio; Tressel, Thierry
Summary: This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the special access to official external financing, and the role of shocks. In addition to more standard factors, we find that domestic financial liberalization is associated with higher current account balances and net foreign asset positions, while capital account liberalization is associated with lower current account balances and net foreign asset positions and with more appreciated real exchange rates. Negative exogenous shocks tend to raise (reduce) the current account in countries with closed (opened) capital accounts. Finally, foreign aid is progressively absorbed over time through net imports, and is associated with a more depreciated real exchange rate in the long-run.
"Summary: We compile a historical dataset covering nearly 40 years of booms and busts in the commodity terms of trade of over 150 countries. We discuss the characteristics of these events and their effects on macroeconomic performance and, in particular, compare the most recent commodity-price cycle with its historical precedents."
Author/Editor: Spatafora, Nikola ; Tytell, Irina
http://www.imf.org/external/pubs/cat/longres.cfm?sk=23307.0
Labels: finance
"Summary: This paper examines the impact of macroeconomic and financial sector policy announcements in the United States, the United Kingdom, the euro area, and Japan during the recent crisis on interbank credit and liquidity risk premia. Announcements of interest rate cuts, liquidity support, liability guarantees, and recapitalization were associated with a reduction of interbank risk premia, albeit to a different degree during the subprime and global phases of the crisis. Decisions not to reduce interest rates and bail out individual banks in an ad hoc manner had adverse repercussions, both domestically and abroad. The results are robust to controlling for the surprise content of announcements and using alternative measures of financial distress."
Author/Editor: A�t-Sahalia, Yacine; Andritzky, Jochen R.; Jobst, Andreas; Nowak, Sylwia Barbara; Tamirisa, Natalia T.
http://www.imf.org/external/pubs/cat/longres.cfm?sk=23293.0
Labels: finance
" Nicolas Sarkozy unveiled a report into the usefulness of gross domestic product as an economic indicator. The study, from a panel chaired by Joseph Stiglitz, a Nobel-prize-winning economist, was commissioned by the French president last year. It suggests that GDP could be improved by including factors that contribute towards individual well-being, such as holidays, and relying less on pure measures of market output." See article "Economics focus: Measuring what matters | The Economist
Report by the Commission on the Measurement of Economic Performance and Social Progress. Available at www.stiglitz-sen-fitoussi.fr.
"A Sept. 10 report from the Census Bureau shows that the child poverty rate rose to 19.0% in 2008, from 18% in 2007. That translates to 14.1 million children living in poverty in the richest nation on earth.read complete article : Child poverty: a lost decadeIn 2008, more than one in three - 35.3% - of all people living in poverty were children. EPI projects that with the continuing deterioration in the labor market, by 2009 a quarter of all children in this country will be living in poverty and by 2010 the child poverty rate will be 26.6%.
This would represent an increase of 10.4 percentage points from 2000 to 2010 – truly a lost decade. "
"The Lebanese authorities on Saturday charged businessman Salah Ezzedine, dubbed the “Lebanese Madoff” in the local media, with embezzlement. Mr Ezzedine’s case involves hundreds of millions of dollars and has been called a Ponzi scheme by several officials."read complete article : FT.com / Middle East - Lebanon charges Ezzedine with embezzlement
A sealed door to one of Salah Ezzedine's insitutions in Beirut
found this in the Yahoo Behavioral Finance newsletter posted by Vijaya Prasad in an answer to one user asking for behavioral finance reference material:
Labels: finance
"A shroud of mystery surrounding the bankruptcy of a top Lebanese financier was growing on Friday as his list of alleged victims, mainly Muslim Shiites, also does.read complete article : AFP: Mystery shrouds Lebanon's 'Madoff' caseSalah Ezzedine, a Shiite from southern Lebanon in his 50s who has been dubbed the "Bernard Madoff" of his country, was arrested earlier this week when he filed for bankruptcy.
Reports surfaced that he had squandered more than 1.5 billion dollars (1.05 billion euros) of his clients' money."
"The chief executive of Wells Fargo gave notice that the bank would “shortly” return $25 billion in bail-out money. Of the big banks that were helped by the Troubled Asset Relief Programme, only Wells Fargo, Bank of America and Citigroup have yet to repay. John Stumpf said his bank would not need to raise extra equity and would pay back the money in a “shareholder-friendly way” that would not dilute investors’ stock." (Business this week: 29th August - 4th September 2009 newsletter)
Labels: finance, united states
"The head of Behavioural Finance at Barclays Wealth says hot-brained humans often buy and sell right when they shouldn't" - Online video and audio: programmes and multimedia | The Economist
”
Labels: finance
"An Egyptian businesswoman, on the run for 22 years, has gone on trial on charges of a multi-million dollar fraud.read complete article : Al Jazeera English - Middle East - Egypt tries woman over Ponzi schemeHoda Abdel Moneim, 62, nicknamed The Iron Lady, appeared in court on Sunday, two days after being captured re-entering Egypt through Cairo airport."
Labels: finance, middle east
"Avinash Dixit of Princeton University talks to Romesh Vaitilingam about game theory in economics: its emergence and development after the Second World War, particularly from the 1970s onwards; its applications in business, public policy and daily life; and the future research agenda. The interview was recorded in Princeton in August 2009."read complete article : Game theory: emergence, applications and prospects | vox - Research-based policy analysis and commentary from leading economists
Labels: finance
49th Edition: A Review of Trends and Activity in the Investment Company Industry by ICI .PDF download: 2009_factbook.pdf (application/pdf Object)
table of contents:
Section 1: Overview of U.S.-Registered Investment Companies
Investment Company Assets in 2008
Americans' Continued Reliance on Investment Companies Continues
Role of Investment Companies in Financial Markets
Section 2: Recent Mutual Fund Trends
Developments in Mutual Fund Flows
Section 3: Exchange-Traded Funds
Closed-End Fund Preferred Shares
Section 5: Mutual Fund Fees and Expenses
Trends in Mutual Fund Fees and Expenses
Shareholder Demand for Lower-Cost Funds
Section 6: Characteristics of Mutual Fund Owners
Individual and Household Ownership
Where Individuals Purchase and Own Mutual Funds
Section 7: The Role of Mutual Funds in Retirement and Education Savings
Individual Retirement Accounts
Distributions from Defined Contribution Plans and IRAs
Section 1: U.S. Mutual Fund Totals
Section 2: Closed-End Funds, Exchange-Traded Funds, and Unit Investment Trusts
Section 3: U.S. Long-Term Mutual Funds
Section 4: U.S. Money Market Mutual Funds
Section 5: Additional Categories of U.S. Mutual Funds
Section 6: Institutional Investors in the U.S. Mutual Fund Industry
Appendix A: How mutual Funds and investment companies Operate
The Origins of Pooled Investing
The Different Types of U.S. Investment Companies
The Organization of a Mutual Fund
Fund Entities and Service Providers
Appendix B: ICI Statistical Releases and Research Publications
"The Federal Reserve Board on Wednesday warned consumers about fraudulent solicitations that appear to be made with the approval or involvement of the Federal Reserve, Federal Reserve officials, or other U.S. government officials. These solicitations promise bogus financial services or large sums of money in exchange for either payment or personal information that can then be used to access a consumer's bank account.read complete article : FRB: Press Release--Federal Reserve Board alerts public to instances of fraudulent solicitations directed at consumers--August 26, 2009The Federal Reserve is advising consumers that it has no involvement in these solicitations. Consumers are strongly urged to verify the legitimacy of potential service providers before entering into a business transaction. Individuals seeking help with repairing their credit history, avoiding home mortgage foreclosure, finding mortgage refinance options, or managing their credit card debt should do business only with reputable service providers. Information related to these issues may be found on the Federal Reserve Board's website at: http://www.federalreserve.gov/consumerinfo.
Individuals who have or suspect they have been a victim of a scam should contact local law enforcement agencies. Information related to how to identify a fraud or scam may be found on the Federal Reserve Board's Consumer Help Center website at: http://www.federalreserveconsumerhelp.gov."
Labels: finance, united states
read complete article : After a 30-Year Run, Rise of the Super-Rich Hits a Wall - NYTimes.com"The rich have been getting richer for so long that the trend has come to seem almost permanent.
They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.
But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon."
Labels: finance, society, united states
"MY STORY starts with a theory that Ronald Reagan and Margaret Thatcher sold us. It is called "supply-side economics", and it claims that economic growth depends, first, on the rich (not the poor) being rewarded with tax cuts; and second, on markets being freed from regulation…."read complete article : Falling out of love with market myths - opinion - 25 July 2009 - New Scientist
Labels: finance
from PQ Media :: Press Releases"While Growth Will Slow to 10.2% in 2009, Word-of-Mouth is on Pace to Remain among the Fastest Growing Segments of the Media and Communications Industry This Year
From Only a $300 Million Blip in the Marketing Services Sector in 2003, Word-of-Mouth Spending is Expected to Reach $3 Billion in 2013"
Labels: finance
Jobs Picture for August 7, 2009
Recovery Act has significant impact, but long-term unemployment at 70-year high
by Heidi Shierholz with research assistance from Kathryn Edwards and Andrew Green
“ The July employment report released this morning by the Bureau of Labor Statistics detailed the 19th month of the recession, showing an additional 247,000 jobs lost in July, but unemployment was little changed, declining 0.1 percentage points to 9.4%. The pain in the real economy is continuing to deepen, but much more slowly than it had been.” read remaining article
Labels: finance
(thanks Michelle at HuffDuffer)
“Financial institutions are a pillar of civilized society, supporting people in their productive ventures and managing the economic risks they take on. The workings of these institutions are important to comprehend if we are to predict their actions today and their evolution in the coming information age. The course strives to offer understanding of the theory of finance and its relation to the history, strengths and imperfections of such institutions as banking, insurance, securities, futures, and other derivatives markets, and the future of these institutions over the next century." Robert Shiller Yale ECON 252
| Finance and Insurance as Powerful Forces in Our Economy and Society | video audio transcript |
| The Universal Principle of Risk Management: Pooling and the Hedging of Risks | video audio transcript |
| Technology and Invention in Finance | video audio transcript |
| Portfolio Diversification and Supporting Financial Institutions (CAPM Model) | video audio transcript |
| Insurance: The Archetypal Risk Management Institution | video audio transcript |
| Efficient Markets vs. Excess Volatility | video audio transcript |
| Behavioral Finance: The Role of Psychology | video audio transcript |
| Human Foibles, Fraud, Manipulation, and Regulation | video audio transcript |
| Guest Lecture by David Swensen | video audio transcript |
| Debt Markets: Term Structure | video audio transcript |
| Stocks | video audio transcript |
| Real Estate Finance and Its Vulnerability to Crisis | video audio transcript |
| Banking: Successes and Failures | video audio transcript |
| Guest Lecture by Andrew Redleaf | video audio transcript |
| Guest Lecture by Carl Icahn | video audio transcript |
| The Evolution and Perfection of Monetary Policy | video audio transcript |
| Investment Banking and Secondary Markets | video audio transcript |
| Professional Money Managers and Their Influence | video audio transcript |
| Brokerage, ECNs, etc. | video audio transcript |
| Guest Lecture by Stephen Schwarzman | video audio transcript |
| Forwards and Futures | video audio transcript |
| Stock Index, Oil and Other Futures Markets | video audio transcript |
| Options Markets | video audio transcript |
| Making It Work for Real People: The Democratization of Finance | video audio transcript |
| Learning from and Responding to Financial Crisis, Part I (Guest Lecture by Lawrence Summers) | video audio transcript |
| Learning from and Responding to Financial Crisis, Part II (Guest Lecture by Lawrence Summers) |
Labels: finance
"How important is nutrition to economic development? This column shows that the introduction of the potato can explain 22% of the rise in population and 47% of the rise in urbanization during the 18th and 19th centuries."Potatoes, the fruit of the earth | vox - Research-based policy analysis and commentary from leading economists
"Difficult economic times can be the breeding ground for increased fraudulent activities. In July 2009, the Financial Crimes Enforcement Network (www.fincen.gov) published its 12th edition of The SAR Activity Review — By the Numbers. SARs (Suspicious Activity Reports) are one key aspect of FinCEN’s efforts related to its responsibility for regulatory administration of the Bank Secrecy Act of 1970. Many different financial industries such as banks, credit unions, insurance companies, check-cashing services, broker/dealers, and casinos are required to complete and file SARs."Look Out for Suspicious Activities | Big Fat Finance Blog
Labels: finance
"When we talk about inequality in the United States, we usually have a couple of different things in mind. We think immediately of income inequality. Inequalities of important life outcomes come to mind (health, housing, education), and, of course, we think of the inequalities of opportunity that are created by a group's social location (race, urban poverty, gender). But a fundamental form of inequality in our society is a factor that influences each of these: inequalities of wealth across social groups."UnderstandingSociety: Wealth inequality
Labels: finance
Public Not Desperate About Economy or Personal Finances: Section 2: Causes and Consequences of the Financial Crisis - Pew Research Center for the People & the PressGreed Is … More Prevalent
“With so much attention focused on the risky practices of financial institutions as a factor in the economic crisis, many Americans see the leaders of those businesses as greedier today than they were in the past. Some six-in-ten say those executives are greedier, while 37% say they are about the same as they have always been. There are only slight partisan differences in these opinions, but those who say they are struggling in this economy are significantly more likely to see more greed today.
Solid majorities of Republicans and Democrats (62% each) say they see financial leaders as more greedy today than in the past; 60% of independents share this view. Significant differences, though, are evident among those who describe themselves as professional class, working class or struggling. Slightly more than half of those who define themselves as professionals (54%) say that leaders of financial institutions are greedier today. That increases to 61% of those who describe themselves as working class and nearly three-quarters (74%) of those who see themselves as struggling.”
also see 2001 research paper, “Risky Business: Americans see greed, cluelessness behind dot-coms’ comeuppance” :
“Most Americans (67%) agree that this is a major reason behind dot-coms financial woes. But Americans between age 18 and 29 are less likely to blame greed than their elders are. Fully 78% of those between 50 and 64 say investors’ risky behavior is a major cause of the downturn, while 58% of Americans between 18 and 29 feel this way. Some 21% of Americans think investors’ risky behavior is only a minor factor in dotcoms’ fading fortunes. Young Americans are much more likely to say this than older Americans. One-third (34%) of those in the 18-29 age group say investors’ risky behavior”
Labels: finance, united states
The study and investigation of high-tech and economic crimes can involve focusing on a wide array of information. Topics and data sources can range from being extremely limited to all-encompassing in scope. This list of websites represents a collection of Internet resources which provide information on a wide range of topics pertinent to the study and investigation of white collar crime."
Labels: finance, united states
2008 Complaint and Inquiry Statistics - U.S. BBBU.S. Inquiry Statistics
U.S. Complaints Statistics
U.S. Statistics Sorted by Industry
Canadian Inquiry Statistics
Canadian Complaints Statistics
Canadian Statistics Sorted by Industry
Combined US/Canada Inquiry Statistics
Combined US/Canada Complaints Statistics
Combined US/Canada Statistics Sorted by Industry "
Labels: finance, united states
from SEC: Complaint Data in Graphs and Tables
Complaint Type
FY 2007 Totals
FY 2006 Totals
Change
Rank in 2006
1
Spam: Unwanted Emails or Faxes
1,755
1,950
Down 10.00%
2
2
Advance Fee Fraud - security related
1,706
2,099
Down 18.72%
1
3
Manipulation of securities, prices or markets
899
953
Down 5.67%
3
4
Account records: Errors or omissions
800
773
Up 3.49%
5
5
Transfer of Account
781
806
Down 3.10%
4
6
Delivery of funds or proceeds
763
666
Up 14.56%
7
7
Account closing: Problems w/ redemption, liquidation or closing
641
719
Down
10.85%6
8
Short selling
604
631
Down 4.28%
8
9
Theft of funds or securities
499
570
Down 12.46%
n/a
10
Misrepresentations: Inaccurate or incomplete disclosures
458
426
Up 7.51%
n/a
Labels: finance, united states
Extract from executive summary:
“ From the submissions, IC3 referred 72,940 complaints of crime to federal, state, and local law enforcement agencies around the country for further consideration. The vast majority of cases were fraudulent in nature and involved a financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was $264.6 million with a median dollar loss of $931.00 per complaint. This is up from $239.1 million in total reported losses in 2007. Other significant findings related to an analysis of referrals include:
* Non-delivered merchandise and/or payment was, by far, the most reported offense, comprising 32.9% of referred complaints. Internet auction fraud accounted for 25.5% of referred complaints. Credit/debit card fraud made up 9.0% of referred complaints. Confidence fraud, computer fraud, check fraud, and Nigerian letter fraud round out the top seven categories of complaints referred to law enforcement during the year.
*Of those complaints reporting a dollar loss, the highest median losses were found among check fraud ($3,000), confidence fraud ($2,000), Nigerian (west African, 419, Advance Fee) letter fraud ($1,650).
* Among perpetrators, 77.4% were male and half resided in one of the following states: California, New York, Florida, Texas, District of Columbia, and Washington. The majority of reported perpetrators (66.1%) were from the United States; however, a significant number of perpetrators where also located in the United Kingdom , Nigeria , Canada , China, and South Africa.
* Among complainants, 55.4% were male, nearly half were between the ages of 30 and 50 and one-third resided in one of the four most populated states: California, Florida, Texas, and New York. While most were from the United States (92.4%), IC3 received a number of complaints from Canada, United Kingdom, Australia, India, and France.
*Males lost more money than females (ratio of $1.69 dollars lost per male to every $1.00 dollar lost per female). This may be a function of both online purchasing differences by gender and the type of fraudulent schemes by which the individuals were victimized.
* E-mail (74.0%) and webpages (28.9%) were the two primary mechanisms by which the fraudulent contact took place.”
click here for the full report
Labels: finance, society, technology, united states, world
list of articles between 2003 and 2009 on white collar crime from the FBI.
2009 articles listed below
06/30/09 ONLINE AUCTION FRAUD: Don't Let it Happen to You
06/24/09 A MAJOR CRACKDOWN: On Health Care Fraud
06/19/09 PONZI SCHEME INDICTMENTS: Five Charged in $7 Billion Ploy
06/02/09 BACK TO BASICS: The Director on the Financial Crisis
04/27/09 MORTGAGE FRAUD SCAM: 'Dream Homes' Turn into Nightmare
04/17/09 WORK-AT-HOME SCAMS: Job One: Don't Take the Bait
04/01/09 SPEAR PHISHERS: Angling to Steal Your Financial Info
03/09/09 SEEKING VICTIMS: In the Stanford Financial Group Case
03/03/09 DON'T PUT YOUR HEALTH: In the Hands of Crooks
Labels: finance, united states
"With all the news lately about a massive Ponzi scheme that allegedly defrauded investors of $50 billion, you may be wondering about the difference between this and a pyramid scheme.The terms are often used interchangeably, but there is a difference. A Ponzi scheme is basically a passive investment scheme. You pay in your money, wait and eventually get a return on your investment. All the organizers ask for is your money. You can recruit other people to invest, but you don't have to"
“This chart from the US Securities and Exchange Commission shows how quickly one of these schemes will run out of potential investors. Note that after just a dozen levels or so, you would need more people than the entire population of the world to keep things going.”
--- taken from from Ponzi vs. pyramid @ Koster Blog
Labels: finance
Top Fraud Schemes according to the FBI:
High Yield Investment Fraud Ponzi Schemes Pyramid Schemes Advanced Fee Schemes Foreign Currency Fraud Broker Embezzlement Hedge Fund Related Fraud Late Day Trading"
Federal Bureau of Investigation - Securities Fraud Awareness & Prevention Tips
Labels: finance, society, united states
THE BILLIONAIRES
“What makes you sell? If you are like most people you think you have solid reasons for selling decisions. But, in reality, you may be rationalizing knee-jerk impulses after the fact. This type of behavior is found among top professional investors as well as retail-level investors.
Half of all investment decisions are about selling. Yet virtually all the investment advice we receive or materials we read are concerned with buying. One big reason is that we are wired for buying.” -Mike Ervolini, 07.22.09
read complete article : http://www.forbes.com/2009/07/22/ervolini-sell-odean-intelligent-investing-buying.html
Labels: finance
Origin of the phrase Ponzi Scheme in light of the $50 Billion dollar one recently from YouTube/Hot for Words
“The Economic Report of the President is an annual report written by the Chairman of the Council of Economic Advisors. It overviews the nation's economic progress using text and extensive data appendices. The Economic Report of the President is transmitted to Congress no later than ten days after the submission of the Budget of the United States Government. Supplementary reports can be issued to the Congress which contain additional and/or revised recommendations. Documents are available in ASCII text and Adobe Portable Document Format (PDF), with many of the tables also available for separate viewing and downloading as spreadsheets in xls and comma delimited formats”
Download entire 2009 report as a single PDF file (5.4 MB, PDF)
Statistical Data for 2009 http://www.gpoaccess.gov/eop/tables09.html
from the Housing and Financial Market chapter: chart above shows “measures of consumer confidence from both the Reuters/ University of Michigan survey and the Conference Board survey, which reveal substantial pessimism among consumers in the recent data. In fact, in October 2008 the Conference Board measure of confidence reached the lowest level ever seen in the index’s 51-year history”.
from Education and Labor chapter: chart above: “For most people, a strong motivation to obtain additional years of
schooling is the labor market return they expect to receive. Indeed, according to Chart 8-1, adults with a bachelor’s or an advanced degree earn considerably more than adults with a high school degree?
Labels: finance, united states
“Abstract:
Finance professionals, who are regularly exposed to notions of volatility, seem to confuse mean absolute deviation with standard deviation, causing an underestimation of 25% with theoretical Gaussian variables. In some fat tailed markets the underestimation can be up to 90%. The mental substitution of the two measures is consequential for decision making and the perception of market variability”
SSRN eLibrary. Retrieved July 25, 2009, from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=970480.
Labels: finance
Abstract:
The ratio of total household debt to aggregate personal income in the United States has risen from an average of 0.6 in the 1980s to an average of 1.0 so far this decade. In this paper we explore the causes and consequences of this dramatic increase. Demographic shifts, house price increases, and financial innovation all appear to have contributed to the rise. Households have become more exposed to shocks to asset prices through the greater leverage in their balance sheets, and more exposed to unexpected changes in income and interest rates because of higher debt payments relative to income. At the same time, an increase in access to credit and higher levels of assets should give households, on average, a greater ability to smooth through shocks. We conclude by discussing some of the risks associated with some households having become very highly indebted relative to their assets.
Labels: finance, society, united states
Larry DeWitt (2009) writes
“Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded. Its structure, logic, and mode of operation have nothing in common with Ponzi schemes or chain letters or pyramid schemes.
The first modern social insurance program began in Germany in 1889 and has been in continuous operation for more than 100 years. The American Social Security system has been in continuous successful operation since 1935. Charles Ponzi's scheme lasted barely 200 days.”
read full article about the history of ponzi schemes and its relationship with social security.
Labels: finance
Paul B. Farrell writes:
“ARROYO GRANDE, Calif. -- Bush's nudger-in-chief, Hank Paulson, is a far superior nudger than Obama's new behavioral economists, Richard Thaler and Cass Sunstein, co-authors of "Nudge."
Why? In large part because behavioral economics is in a war with the classical economics that has driven American capitalism since Adam Smith in 1776, on through Milton Friedman, Reaganomics, Bush, Paulson and conservative political ideology.”
full text here: http://www.foxbusiness.com/story/nudgers-theory-fatal-flaw/
Labels: finance
OVER 730,000 counts of suspected financial wrongoing were recorded in America last year, according to recent data from the Treasury Department's Financial Crimes Enforcement Network. Institutions such as banks, insurers and casinos are required by law to report suspicious activities to federal authorities under 20 categories. Financial institutions filed nearly 13% more reports of fraud compared with 2007, accounting for almost half of the increase in total filings. The number of mortgage frauds alone rose by 23% to almost 65,000. But not all categories saw an increase: incidents suspected terrorist financing fell. Just under half of all filings are related to money laundering, a proportion that is little changed in over a decade.
Shutterstock
Labels: finance
The efficient-markets hypothesis has underpinned many of the financial industry’s models for years. After the crash, what remains of it?
Labels: finance
Almost a year after A.I.G.’s collapse, despite a tidal wave of outrage, there still has been no clear explanation of what toppled the insurance giant. The author decides to ask the people involved—the silent, shell-shocked traders of the A.I.G. Financial Products unit—and finds that the story may have a villain, whose reign of terror over 400 employees brought the company, the U.S. economy, and the global financial system to their knees.
Thanks WestPan
Labels: finance
Bibliography of an article by Susan Weiner, “Behavioral Finance – A Three-Part Model for Client Relationships”
Complexity Theory and Adaptive Systems
Gribbin, John. Deep Simplicity. New York: Random House, 2004.
Strogatz, Steven. SYNC: The Emerging Science of Spontaneous Order. New York: Hyperion, 2003.
Taleb, Nassim. Fooled by Randomness. New York: TEXERE LLC, 2001.
Taleb, Nassim. The Black Swan: The Impact of the Highly Improbable. New York: Random House, 2007.
Wiener, Norbert. Cybernetics and Society. Boston MA: Houghton Mifflin, 1954.
Behavioral Finance and Investor Psychology
Ariely, Dan. Predictably Irrational. New York: HarperCollins, 2008.
Brafman, Ori. Rom. Sway. New York: Doubleday, 2008.
Gigerenzer, Gerd. Adaptive Thinking: Rationality in the Real World. New York: Oxford University Press, 2000.
Gilbert, Daniel. Stumbling on Happiness. New York: Knopf, 2006.
Gilovich, Thomas. How We Know What Isn’t So. New York: The
Free Press, 1991.Kahneman, Daniel; Tversky, Amos. Choices, Values and Frames. New York: Russell Sage Foundation. Cambridge University Press, 2000.
Peterson, Richard. Inside the Investor’s Brain: The Power of Mind Over Money. New Jersey: John Wiley & Sons Inc., 2007.
Plous, Scott. The Psychology of Judgment and Decision Making. New York: McGraw-Hill Series in Social Psychology, McGraw-Hill, Inc., 1993.
Politser, Peter. Neuroeconomics. New York: Oxford University Press,
2008.Swartz, Barry. The Paradox of Choice. New York: HarperCollins, 2004.
Taylor, Jill Bolte. My Stroke of Insight. New York: Viking, 2008.
Thaler, Richard; Sunstein, Cass. Nudge. New Haven: Yale University Press, 2008.
Intersection of Theory and Practice
Bookstaber, Richard. Markets, Hedge Funds, and the Perils of Financial Innovation: A Demon of Our Own Design. NewJersey:John Wiley & Sons, 2007.
Ellis, Charles. Investment Policy: How to Win the Loser’s Game. Homewood, IL: Business One Irwin, 1993.
Hughes Jr., James. Family Wealth: Keeping It in the Family – How Family Members and Their Advisors Preserve Human, Intellectual, and Financial Assets for Generations. New York: Bloomberg Press, 2004.
Swensen, David. Unconventional Success: A Fundamental Approach to Personal Investment. New York: Free Press, 2005.
Labels: finance
"WASHINGTON, July 15 (Reuters) - Lebanon's economic growth is likely to reach 4 percent in 2009, half the pace of last year, as the economy remains relatively unaffected by the global financial crisis, the International Monetary Fund on Wednesday."Lebanon to grow 4 pct, avoids worst of crisis-IMF | Markets | Markets News | Reuters
"Financial institutions are a pillar of civilized society, supporting people in their productive ventures and managing the economic risks they take on. The workings of these institutions are important to comprehend if we are to predict their actions today and their evolution in the coming information age. The course strives to offer understanding of the theory of finance and its relation to the history, strengths and imperfections of such institutions as banking, insurance, securities, futures, and other derivatives markets, and the future of these institutions over the next century."You Tube Playlist for 26 courses
Labels: finance
"OH, FOR A MAGIC PILL THAT COULD EASE SOME of the pain of the financial "disease" that defined the past year. Barring that, how about "maximizing emotional comfort" within the market? [rev] William Waitzman That is part of what a financial-personality assessment, being introduced in the U.S. by Barclays Wealth, aims to do. "People who are most liable to become emotionally engaged with their investments are most likely to buy at the top and sell at the bottom," says Greg Davies, head of the wealth manager's behavioral-finance team, and author of the 57-question survey."
Labels: finance
Robert H. Frank writes,
“IF asked to identify the intellectual founder of their discipline, most economists today would probably cite Adam Smith. But that will change. Economists’ forecasts generally aren’t worth much, but I’ll offer one that even my youngest colleagues won’t survive to refute: If we posed the same question 100 years from now, most economists would instead cite Charles Darwin…..Growing evidence suggests that Darwin’s view tracks economic reality much more closely.”
Labels: finance
"AN INTERVIEW WITH BURTON MALKIEL: The influential author of the 1973 bestseller; A Random Walk Down Wall Street, again makes the case for low-cost index funds."
"The markets have averaged an annual rate of return of [about] 9 ½% since 1926. But average investors don't make anything like that, because they tend to get in at the top and out at the bottom." --Burton Malkiel
Labels: finance
