192 definitions by abu yahya

(FINANCE) hilarious term used for over a century in the trading of stocks, commodities, etc. A way in which someone who controls much of the outstanding shares of stock can make a lot of money while ruining those who are betting against the stock.

A "short" is traditionally someone with expertise in shorting a stock, i.e., managing to borrow shares and sell them in anticipation of a decline in value. Obviously, if there are many people shorting a particular stock at any given time, and if they are wrong about the future, then a steep rise in value if the share price will not only cause them to lose money, it will force panic purchases of stock as the traders attempt to cover their shorts. If the instigator of the squeeze is successful, he will have a corner, and drive the price of the stock up to absurd levels.

An unsuccessful squeeze of shorts in a copper trust triggered the Crisis of 1907. That, in turn, triggered the Aldrich–Vreeland Act (May 1908).
The brokers, after awhile, commenced to borrow large amounts of the stock. This convinced the insiders that there was a big short interest somewhere, and they got together in order to squeeze the shorts... They never awakened to the fact that the {president of the company} had sold out on them... {and were totally ruined}

Henry Clews, Victor Niederhoffer, *Fifty Years in Wall Street*, p.149
by Abu Yahya April 05, 2010
(FINANCE) a financial instrument whose value is tied to something else; for example,

* a futures contract (future)

* an option

* a swap

In each of these examples, the value of the derivative is related in some way to the price of something else. When the market price of (say) an ounce of gold goes from $1000/oz to $1050/oz, the return to the owner of 1 oz. of actual gold is 5%. But for the owner of a call option or a future, the return is much, much greater than that.

A derivative can be used to multiply risk AND potential profits to speculators; but it can be used for the counterparty to minimize risk by locking in prices, or by hedging against risk.
The economic crisis of 2008 has really focused attention on the financial derivative market.
by Abu Yahya April 05, 2010
the gap between revenues and expenditures for a government (over a given period of time); often referred to as an internal deficit or public deficit.
The public deficit accumulates over each time period (usually a year) into what is known as the public debt.

According to Keynesian and Neo-Keynesian economic theory, fiscal deficits are usually the most effective tool for stimulating economic activity; the actual choice of how the money is spent is less important.
In the USA, most states are not allowed to run fiscal deficits. In other federal republics, such as India and Argentina, they are allowed and frequently account for much of those countries' internal deficits.
by Abu Yahya February 14, 2009
(1) The strategy by the world's economic elites of imposing an extremely neoliberal economic regime on communities they control, using some form of shock: a natural disaster, a coup d'etat, a war, a financial crisis, etc. Once the community has been crippled by this first shock, the economic "reforms" are imposed suddenly, creating a secondary blow. Then, as the community begins to recover and fight back, the authorities use torture and police brutality to (literally) shock the community a third time.

(2) title of a book by Naomi Klein describing def. 1

(Please see disaster capitalism.)
Ms. Klein's 2007 book described the rise of disaster capitalism in mostly poor countries: Chile (after 1973), Argentina (after 1989), Poland (after 1993), and Sri Lanka (after 2004). But in 2009, the super rich were able to inflict the shock doctrine on the richest countries of the world, including Germany, France, and Italy.

The 2008 financial crisis was entirely a product of the richest 1% of the human race; but soon after, national governments scrambled to punish the remaining 99% for the crisis instead, by slashing public services and imposing austerity programs.
by Abu Yahya July 10, 2010
(FINANCE) a person or entity that lends money to someone else by creating securities and selling them. In commercial milieux, this is investment banking, and the most famous investment bank is Goldman Sachs. Another major investment bank is Morgan Stanley.

Most major countries have a ministry of the treasury, or ministry of finance, that issues bonds for the government and is responsible for selling them to raise money for government borrowing. These are treasury securities.
Peter Warburg was an underwriter who helped "design" the Usonian federal reserve system.
by Abu Yahya May 05, 2010
(FINANCE) a situation in which an investor owns financial instruments (shares, bonds, financial derivatives, etc.) that will make the most money IF some other thing declines in value.

Therefore, one always has to take a short position on something in particular. A short position on gold means the investor expects gold to decline in value in the near future, and has bought various things to make money if it does.

Some ways to take a short position on X include:

(1) buying a put option on X

(2) writing a call option on X

(3) borrowing X and selling it (shorting a stock)

#3 is the classical way to take a short position. It was dangerous because a skillful trader could squeeze the shorts using a corner.
BILL: I guess you took a bath when the stock market tanked, huh?

ANA: Nope. I took a short position on all of the nine largest banks. Did rather well, thank you very much.

BIL: Sweet!
by Abu Yahya April 05, 2010
AEI
(acronym) American Enterprise Institute; an extremely powerful thinktank associated with the Conservative Movement.
The AEI is extremely well-connected, and much favored by business interests.
by Abu Yahya May 29, 2009

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