Securities Markets in a Competitive Age an Empirical Analysis Of
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Economic Resources and Systems
Chapter 2 Economic Resources and Systems Section 2.2 Economic Systems Click here to advance to the next slide. Read to Learn The Main Idea Describe the three basic economic questions Scarcity of economic resources forces every each country must answer to make decisions country to develop an economic system that about using their resources. determines how resources will be used. Each economic system has its advantages and Contrast the way a market economy and a disadvantages. command economy answer the three economic questions. Key Concepts Key Terms Basic Economic Questions the study of how individuals and Different Types of Economies groups of individuals strive to satisfy economics their needs and wants by making choices 1 Key Terms Key Terms the amount of money given or economic the methods societies use to price asked for when goods and services systems distribute resources are bought or sold an economic system in which the amount of goods and services market economic decisions are made in the supply that producers will provide at economy marketplace various prices Key Terms Key Terms the amount or quantity of goods and an economic system in which a command demand services that consumers are willing central authority makes the key economy to buy at various prices economic decisions the point at which the quantity equilibrium mixed an economy that contains both demanded and the quantity supplied price economy private and public enterprises meet Basic Economic Questions Basic Economic Questions There are three basic What should be How should it Who should produced? be produced? share in what is Economic questions. -
Analysis of Securitized Asset Liquidity June 2017 an He and Bruce Mizrach1
Analysis of Securitized Asset Liquidity June 2017 An He and Bruce Mizrach1 1. Introduction This research note extends our prior analysis2 of corporate bond liquidity to the structured products markets. We analyze data from the TRACE3 system, which began collecting secondary market trading activity on structured products in 2011. We explore two general categories of structured products: (1) real estate securities, including mortgage-backed securities in residential housing (MBS) and commercial building (CMBS), collateralized mortgage products (CMO) and to-be-announced forward mortgages (TBA); and (2) asset-backed securities (ABS) in credit cards, autos, student loans and other miscellaneous categories. Consistent with others,4 we find that the new issue market for securitized assets decreased sharply after the financial crisis and has not yet rebounded to pre-crisis levels. Issuance is below 2007 levels in CMBS, CMOs and ABS. MBS issuance had recovered by 2012 but has declined over the last four years. By contrast, 2016 issuance in the corporate bond market was at a record high for the fifth consecutive year, exceeding $1.5 trillion. Consistent with the new issue volume decline, the median age of securities being traded in non-agency CMO are more than ten years old. In student loans, the average security is over seven years old. Over the last four years, secondary market trading volumes in CMOs and TBA are down from 14 to 27%. Overall ABS volumes are down 16%. Student loan and other miscellaneous ABS declines balance increases in automobiles and credit cards. By contrast, daily trading volume in the most active corporate bonds is up nearly 28%. -
The Professional Obligations of Securities Brokers Under Federal Law: an Antidote for Bubbles?
Loyola University Chicago, School of Law LAW eCommons Faculty Publications & Other Works 2002 The rP ofessional Obligations of Securities Brokers Under Federal Law: An Antidote for Bubbles? Steven A. Ramirez Loyola University Chicago, School of Law, [email protected] Follow this and additional works at: http://lawecommons.luc.edu/facpubs Part of the Securities Law Commons Recommended Citation Ramirez, Steven, The rP ofessional Obligations of Securities Brokers Under Federal Law: An Antidote for Bubbles? 70 U. Cin. L. Rev. 527 (2002) This Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Faculty Publications & Other Works by an authorized administrator of LAW eCommons. For more information, please contact [email protected]. THE PROFESSIONAL OBLIGATIONS OF SECURITIES BROKERS UNDER FEDERAL LAW: AN ANTIDOTE FOR BUBBLES? Steven A. Ramirez* I. INTRODUCTION In the wake of the stock market crash of 1929 and the ensuing Great Depression, President Franklin D. Roosevelt proposed legislation specifically designed to extend greater protection to the investing public and to elevate business practices within the securities brokerage industry.' This legislative initiative ultimately gave birth to the Securities Exchange Act of 1934 (the '34 Act).' The '34 Act represented the first large scale regulation of the nation's public securities markets. Up until that time, the securities brokerage industry4 had been left to regulate itself (through various private stock exchanges). This system of * Professor of Law, Washburn University School of Law. Professor William Rich caused me to write this Article by arranging a Faculty Scholarship Forum at Washburn University in the'Spring of 2001 and asking me to participate. -
Speculation in the United States Government Securities Market
Authorized for public release by the FOMC Secretariat on 2/25/2020 Se t m e 1, 958 p e b r 1 1 To Members of the Federal Open Market Committee and Presidents of Federal Reserve Banks not presently serving on the Federal Open Market Committee From R. G. Rouse, Manager, System Open Market Account Attached for your information is a copy of a confidential memorandum we have prepared at this Bank on speculation in the United States Government securities market. Authorized for public release by the FOMC Secretariat on 2/25/2020 C O N F I D E N T I AL -- (F.R.) SPECULATION IN THE UNITED STATES GOVERNMENT SECURITIES MARKET 1957 - 1958* MARKET DEVELOPMENTS Starting late in 1957 and carrying through the middle of August 1958, the United States Government securities market was subjected to a vast amount of speculative buying and liquidation. This speculation was damaging to mar- ket confidence,to the Treasury's debt management operations, and to the Federal Reserve System's open market operations. The experience warrants close scrutiny by all interested parties with a view to developing means of preventing recurrences. The following history of market events is presented in some detail to show fully the significance and continuous effects of the situation as it unfolded. With the decline in business activity and the emergence of easier Federal Reserve credit and monetary policy in October and November 1957, most market elements expected lower interest rates and higher prices for United States Government securities. There was a rapid market adjustment to these expectations. -
The Structure of the Securities Market–Past and Future, 41 Fordham L
University of California, Hastings College of the Law UC Hastings Scholarship Repository Faculty Scholarship 1972 The trS ucture of the Securities Market–Past and Future William K.S. Wang UC Hastings College of the Law, [email protected] Thomas A. Russo Follow this and additional works at: http://repository.uchastings.edu/faculty_scholarship Part of the Securities Law Commons Recommended Citation William K.S. Wang and Thomas A. Russo, The Structure of the Securities Market–Past and Future, 41 Fordham L. Rev. 1 (1972). Available at: http://repository.uchastings.edu/faculty_scholarship/773 This Article is brought to you for free and open access by UC Hastings Scholarship Repository. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of UC Hastings Scholarship Repository. For more information, please contact [email protected]. Faculty Publications UC Hastings College of the Law Library Wang William Author: William K.S. Wang Source: Fordham Law Review Citation: 41 Fordham L. Rev. 1 (1972). Title: The Structure of the Securities Market — Past and Future Originally published in FORDHAM LAW REVIEW. This article is reprinted with permission from FORDHAM LAW REVIEW and Fordham University School of Law. THE STRUCTURE OF THE SECURITIES MARIET-PAST AND FUTURE THOMAS A. RUSSO AND WILLIAM K. S. WANG* I. INTRODUCTION ITHE securities industry today faces numerous changes that may dra- matically alter its methods of doing business. The traditional domi- nance of the New York Stock Exchange' has been challenged by new markets and new market systems, and to some extent by the determina- tion of Congress and the SEC to make the securities industry more effi- cient and more responsive to the needs of the general public. -
The Actual Problems of Assets Securitization in Commercial Organizations
ISSN 0798 1015 HOME Revista ESPACIOS ! ÍNDICES ! A LOS AUTORES ! Vol. 39 (Nº22) Year 2018. Page 28 The Actual Problems of Assets Securitization in Commercial Organizations Los problemas actuales de titulación de activos en organizaciones comerciales Tatiana M. KOVALEVA 1; Oleg A. KHVOSTENKO 2; Alla G. GLUKHOVA 3; Evgeny V. MOZHAROVSKY 4 Received: 03/02/2018 • Approved: 02/03/2018 Contents 1. Introduction 2. Methodology 3. Results 4. Conclusions Bibliographic references ABSTRACT: RESUMEN: The goal of the article is to develop theoretical El objetivo del artículo es desarrollar disposiciones provisions of assets securitization in the Russian teóricas de titulización de activos en la Federación de Federation, to analyze the problems and prospects of Rusia, para analizar los problemas y las perspectivas its development. The main result of the research is de su desarrollo. El principal resultado de la the development of suggestions for expansion of the investigación es el desarrollo de sugerencias para la objects of securitized assets through the mechanisms expansión de los objetos de los activos titulizados a of securitization of income from personal income tax. través de los mecanismos de titulización de los Keywords: securitization, financial risks, personal ingresos del impuesto a la renta personal. income tax, risk management Palabras clave: titulización, riesgos financieros, impuesto a la renta personal, gestión de riesgos 1. Introduction 1.1. Establishing a context During the last ten years the financial market of the Russian Federation has changed a lot as far as the formation of different financial instruments aimed at improving efficiency is concerned. Securitization of assets has occupied an important position among the instruments of financing. -
The Effectiveness of Short-Selling Bans
An Academic View: The Effectiveness of Short-Selling Bans Travis Whitmore Securities Finance Research, State Street Associates Introduction As the COVID-19 virus continues At the same time, regulators have reacted to tighten its grip on the by stiffening regulations to try and protect markets from further price declines. One such world – causing wide spread response, which is common during periods lockdowns and large-scale of financial turmoil, has been to impose disruptions to global supply chains short-selling bans. At the time of writing this, short-selling bans have been implemented in – governments, central banks, and seven countries with potentially more following regulators have been left with little suit. South Korea banned short selling in three choice but to intervene in financial markets, including its benchmark Kospi Index, markets. Central banks have for six months. As stock markets plunged across Europe in late March, Italy, Spain, already pulled out all the stops. France, Greece, and Belgium temporarily halted short selling on hundreds The US Federal Reserve slashed interest of stocks.2 rates to near zero and injected vast amounts of liquidity into the financial system with In this editorial, we discuss the impact “a $300 billion credit program for employers” of short-selling bans on markets and if it and “an open-ended commitment” of will be effective in stemming asset price quantitative easing, meaning unlimited declines resulting from the economic fallout buy back of treasuries and investment from COVID-19. To form an objective view, grade corporate debt. Governments have we review empirical findings from past started to pull on the fiscal policy lever academic studies and look to historical as well, approving expansive stimulus event studies of short-selling bans. -
RATIONING and ALLOCATING RESOURCES Price Rationing
Chapter 4 Demand and Supply Applications Prepared by: Fernando & Yvonn Quijano © 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair Demand and Supply Applications 4 Chapter Outline The Price System: Rationing and Allocating Resources Price Rationing Constraints on the Market and Alternative Rationing Mechanisms Prices and the Allocation of Resources Price Floors Applications Supply and Demand Analysis: An Oil Import Fee Supply and Demand and Market Efficiency Consumer Surplus Producer Surplus Competitive Markets Maximize the Sum of Producer and Consumer Surplus Potential Causes of Deadweight CHAPTER 4: Demand and Supply and 4: Demand CHAPTER Loss from Under- and Overproduction Looking Ahead © 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 2 of 23 THE PRICE SYSTEM: RATIONING AND ALLOCATING RESOURCES price rationing The process by which the market system allocates goods and services to consumers when quantity demanded exceeds quantity supplied. Applications CHAPTER 4: Demand and Supply and 4: Demand CHAPTER © 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 3 of 23 THE PRICE SYSTEM: RATIONING AND ALLOCATING RESOURCES PRICE RATIONING Applications CHAPTER 4: Demand and Supply and 4: Demand CHAPTER FIGURE 4.1 The Market for Lobsters © 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 4 of 23 THE PRICE SYSTEM: RATIONING AND ALLOCATING RESOURCES When supply is fixed or something for sale is unique, its price is demand determined. Price is what the highest bidder is willing to pay. In 2004, the highest bidder was willing to pay $104.1 million for Picasso’s Boy Applications with a Pipe. -
Brokerage, Market Fragmentation, and Securities Market Regulation
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: The Industrial Organization and Regulation of the Securities Industry Volume Author/Editor: Andrew W. Lo, editor Volume Publisher: University of Chicago Press Volume ISBN: 0-226-48847-0 Volume URL: http://www.nber.org/books/lo__96-1 Conference Date: January 19-22, 1994 Publication Date: January 1996 Chapter Title: Brokerage, Market Fragmentation, and Securities Market Regulation Chapter Author: Kathleen Hagerty, Robert L. McDonald Chapter URL: http://www.nber.org/chapters/c8101 Chapter pages in book: (p. 35 - 62) 2 Brokerage, Market Fragmentation, and Securities Market Regulation Kathleen Hagerty and Robert L. McDonald 2.1 Introduction A striking fact about the organization of modem financial markets-and one of the great interest to market regulators and exchanges-is the prevalence of market fragmentation, that is, multiple mechanisms or locations for trading a security. A share of common stock, for example, may be traded on one of many organized exchanges, through dealers away from an exchange, in another country, or indirectly through a derivative financial contract, which in turn may be traded on an exchange or through a dealer. To the extent that securities markets provide a central trading location serv- ing to minimize the search cost of finding a counterparty, fragmentation is a puzzle. On the other hand, market participants often have private information, either about the “true value” of the traded security, or about their trading mo- tives.’ In markets with asymmetric information, informed traders earn a profit at the expense of the uninformed traders2 Therefore there is clearly an incen- tive to create mechanisms that mitigate (for at least some subset of partici- pants) costs created by the existence of private information. -
The Federal Reserve's Response to the 1987 Market Crash
PRELIMINARY YPFS DISCUSSION DRAFT | MARCH 2020 The Federal Reserve’s Response to the 1987 Market Crash Kaleb B Nygaard1 March 20, 2020 Abstract The S&P500 lost 10% the week ending Friday, October 16, 1987 and lost an additional 20% the following Monday, October 19, 1987. The date would be remembered as Black Monday. The Federal Reserve responded to the crash in four distinct ways: (1) issuing a public statement promising to provide liquidity as needed, “to support the economic and financial system,” (2) providing support to the Treasury Securities market by injecting in-high- demand maturities into the market via reverse repurchase agreements, (3) allowing the Federal Funds Rate to fall from 7.5% to 7.0%, and (4) intervening directly to allow the rescue of the largest options clearing firm in Chicago. Keywords: Federal Reserve, stock market crash, 1987, Black Monday, market liquidity 1 Research Associate, New Bagehot Project. Yale Program on Financial Stability. [email protected]. PRELIMINARY YPFS DISCUSSION DRAFT | MARCH 2020 The Federal Reserve’s Response to the 1987 Market Crash At a Glance Summary of Key Terms The S&P500 lost 10% the week ending Friday, Purpose: The measure had the “aim of ensuring October 16, 1987 and lost an additional 20% the stability in financial markets as well as facilitating following Monday, October 19, 1987. The date would corporate financing by conducting appropriate be remembered as Black Monday. money market operations.” Introduction Date October 19, 1987 The Federal Reserve responded to the crash in four Operational Date Tuesday, October 20, 1987 distinct ways: (1) issuing a public statement promising to provide liquidity as needed, “to support the economic and financial system,” (2) providing support to the Treasury Securities market by injecting in-high-demand maturities into the market via reverse repurchase agreements, (3) allowing the Federal Funds Rate to fall from 7.5% to 7.0%, and (4) intervening directly to allow the rescue of the largest options clearing firm in Chicago. -
2020 Briefing Paper
2020 International Student Summit Restarting the Global Economy Post COVID-19: A Model G7+5 Summit Background Briefing Paper “The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be.” - Kristalina Georgieva, Managing Director, International Monetary Fund COVID-19’s Impact on the Global Economy The novel coronavirus which emerged in late 2019 and early 2020 has become one of the largest public health crises in modern human history. The virus, a contagious airborne disease, is known to transmit between humans in close proximity. In order to slow the spread of the virus, public health experts in the United States and across the world have called for the suspension of large gatherings, use of masks or face coverings, and increased physical distancing when appropriate. These public health recommendations have fundamentally altered social and economic relationships for billions around the world. Immediate responses to the coronavirus have varied by country, as public health infrastructure initially struggled to respond to the virus. In some countries with strong, centralized government institutions like China, full community lockdowns were put into place with extreme limitations on movement, commerce, and other areas of public life. In other countries, national and local governments attempted to limit the spread of the virus through a patchwork of recommendations and local ordinances. Although responses varied between countries, the virus, and subsequent public health responses, undoubtedly changed the global economic landscape. In March 2020, as outbreaks in Italy and Spain surged and outbreaks began in the United States, the reality of a global pandemic set in. -
Supply, Demand, and Market Equilibrium
Supply, Demand, and Market Equilibrium Overview In this lesson, students will gain an understanding of how the forces of supply and demand influence prices in a market economy. Students will be presented with concepts related to supply and demand through a teacher- led power point and will then practice with these concepts individually. Three short simulations will help to enrich the students’ understanding of supply and demand throughout the lesson. Grade 10 NC Essential Standards for Founding Principles: Civics and Economics • FP.E.1.3 - Explain how supply and demand determine equilibrium price and quantity produced • FP.E.1.4 - Analyze the ways in which incentives and profits influence what is produced and distributed in a market system Essential Questions • What is demand? • How do changes in price affect the quantity demanded? • What factors in the economy other than price change demand? • What is supply? • How do changes in price affect the quantity supplied? • What factors in the economy other than price change supply? • What is a surplus? What is a shortage? • How do consumers and markets react to both shortages and surpluses? • What is equilibrium price? How do changes in supply and demand affect equilibrium price? Materials • “Supply and Demand” PowerPoint, available in Carolina K-12’s Database of K-12 Resources: o http://k12database.unc.edu/?s=supply+demand o Some school districts block the ability to download PPT files via the database. If you are unable to open the accompanying PPT, or cannot locate it, you can send an email request for the file to [email protected] • LCD projector • Handout 1: Demand Practice, attached (answers located in accompanying Power Point) • Handout 2: Supply Practice, attached (answers located in accompanying Power Point) • Handout 3: Supply and Demand Practice, attached (answers located in accompanying Power Point) • Sample EOC Questions and Answer Key, attached Duration 2 block periods Procedure Introduction to Supply and Demand 1.