Secrets of Finances and Payday Loans

Foucault, Kadan and Kandel (2005) develop a model for a limit order market where there are only strategic liquidity traders and the choice between limit and market orders depends only on their degree of impatience. This model focuses on one of the dimensions of liquidity, namely immediacy. Traders who want to trade as soon as [...]

Geopolitical risks like war and terror can create stress scenarios for all risky asset classes. The geopolitical situation has a strong impact on the risk aversion of investors. The events of September 11, 2001, provide a tragic example after which investors bought safe haven assets such as government bonds and gold at the cost of [...]

Market participants often cite changes in investors’ risk appetite as a possible explanation for developments in global financial markets that cannot be explained by changes of market fundamentals. Indeed, financial crises often seem to coincide with abrupt shifts in market sentiment from risk tolerance to risk avoidance. While fundamentals undoubtedly remain of significant importance, these [...]

Most money managers are astute salespeople. They have slick brochures and charts showing why they are better than the competition. They are not above using guilt and intimidation to keep you with them. They will also influence you to keep your money in their area of expertise. In the current decade, real estate prospects are [...]

Money managers will handle your stock investments for a fee. This fee is in addition to the commissions and spreads you must pay a broker. Money managers cannot execute stock transactions. Some money management fees are a percentage of the value of your account. A money manager takes his fee whether your account increases or [...]

In the R&D world, when a new idea is proposed, it is standard practice to look for the fatal flaw. A fatal flaw is a condition that is certain to preclude, or that has a high likelihood of precluding, exercise of the option. Its existence in effect negates ownership of the option. That flaw can [...]

A third explanation for humanity’s history of rotten economic performance may be failure to understand value. Modern economic theory has conclusively shown that value cannot be created when the returns of economic endeavor fail to exceed the cost of capital. This knowledge has been derived from efficient capital markets linked by rapid communications. Under these [...]

It is equally useful to examine the transformation processes by which these assets are converted to value. Consider first a hypothetical example of how important a seemingly mundane intellectual asset such as validated test procedures can be. Professor Stern, who teaches chemistry at a small college in Delaware, has synthesized and patented a new molecule, [...]

Broadly speaking, transfer payments are taxes paid by one sector of a population that are transferred as income to another sector. Today, the term is synonymous with welfare—income taxes paid by the working population are transferred to the poor, the aged, and the disabled, usually to ensure a decent standard of living to all citizens. [...]