abu yahya's definitions
Capital investment in a foreign country that takes the form of purchases of securities (stocks, bonds, and commercial paper) in the companies of firms based in that country. Contrast to FDI.
by abu yahya September 28, 2008
Get the portfolio investmentmug. (FINANCE) business entity formed to pool money provided by investors in order to buy majority stakes in existing companies. A common practice is to then "take the company private," so that it no longer has shares trading on the stock market. The company is then restructured, so that it has entirely different management practices, or a different business strategy. Afterward, the PE fund will most likely re-sell the company on the stock market in a sponsored IPO.
Private equity funds are usually limited liability partnerships (LLPs), which gives them special privileges of nondisclosure; most are organized in the State of Delaware. PEF's have sponsors, or "principals," who are responsible for organizing the fund and recruiting other investors.
Among the best-known PE funds are Blackstone Group*, Kohlberg Kravis Roberts (KKR)*, Goldman Sachs Capital Partners*, Carlyle Group, Permira, Apollo Management, Providence Equity, TPG Capital, Warburg Pincus, and Cerberus. Companies marked with an asterisk (*) are publically listed corporations; most PE funds are pivately managed. The selection above includes the largest ones by capital under management.
Private equity funds are usually limited liability partnerships (LLPs), which gives them special privileges of nondisclosure; most are organized in the State of Delaware. PEF's have sponsors, or "principals," who are responsible for organizing the fund and recruiting other investors.
Among the best-known PE funds are Blackstone Group*, Kohlberg Kravis Roberts (KKR)*, Goldman Sachs Capital Partners*, Carlyle Group, Permira, Apollo Management, Providence Equity, TPG Capital, Warburg Pincus, and Cerberus. Companies marked with an asterisk (*) are publically listed corporations; most PE funds are pivately managed. The selection above includes the largest ones by capital under management.
The private equity fund first appeared in the 1970's as a result of changes to ERISA. Institutional investors, usually pension funds, could be legal partners in an LLP; they also required a place to park assets with very high rates of return.
In the USA, PE funds have long been sinecures for the most powerful political dynasties: the Rockefellers, the Romneys, the Bushes, and others.
In the USA, PE funds have long been sinecures for the most powerful political dynasties: the Rockefellers, the Romneys, the Bushes, and others.
by Abu Yahya September 1, 2010
Get the private equity fundmug. The idea that, if you mitigate the consequences of a particular type of accident, then that type of accident will necessarily occur much more frequently, more than negating the initial benefit.
The CF assumes that human nature is perverse and seeks to equalize consequences. Hence, improved automotive technologies such as air bags, ABS, space frames, etc. will be offset (or more than offset) by careless driving, leading to increased highway fatalities.
FALSIFICATION: Empirical evidence shows that, while reducing consequences increases risky behavior, overall safety/health outcomes are better. Insurance companies with a stake in reducing claims verify this.
More generally, the CF confuses all forms of risk-taking, such as faster highway speeds, with fecklessness. Increased speed and convenience (for motorists) has utility; and there is no principle in welfare economics that says risk-taking will increase by an amount sufficient to offset the safety measures.
The CF assumes that human nature is perverse and seeks to equalize consequences. Hence, improved automotive technologies such as air bags, ABS, space frames, etc. will be offset (or more than offset) by careless driving, leading to increased highway fatalities.
FALSIFICATION: Empirical evidence shows that, while reducing consequences increases risky behavior, overall safety/health outcomes are better. Insurance companies with a stake in reducing claims verify this.
More generally, the CF confuses all forms of risk-taking, such as faster highway speeds, with fecklessness. Increased speed and convenience (for motorists) has utility; and there is no principle in welfare economics that says risk-taking will increase by an amount sufficient to offset the safety measures.
The massively overrated book *Freakanomics* (Dubner & Leavitt) includes many examples of the curmudgeon's fallacy.
by Abu Yahya October 16, 2008
Get the curmudgeon's fallacymug. in economics, the net income from assets that are owned by foreigners. The citizens of a country will own assets that are physically located overseas (for example, real estate in another country, shares of foreign stock, or even labor performed while an expatriate), and those assets earn income. At the same time, foreigners likewise earn income on assets located in ones' own country.
If domestically-owned assets located abroad earn more income than domestic assets owned by foreigners, then there will be a net flow of income from overseas. This is a collateral benefit to running a trade surplus, especially over several years.
An example might be the United Kingdom (UK) during the 19th century. Prior to the 1880's, the UK exported far more than it imported. With the foreign money, it bought assets in the economies of other countries, such as the USA, Continental Europe, and the future Commonwealth of Nations. These assets naturally earned a lot of income, as they accumulated over many decades. The income from these assets was so large that, after the 1880's, the UK ran a trade deficit but still had a current account surplus.
In the case of the UK, the current account surplus from the NFFI was still large enough that the UK could continue to buy foreign assets that earned income, even as its trade deficit grew during the early 20th century.
If domestically-owned assets located abroad earn more income than domestic assets owned by foreigners, then there will be a net flow of income from overseas. This is a collateral benefit to running a trade surplus, especially over several years.
An example might be the United Kingdom (UK) during the 19th century. Prior to the 1880's, the UK exported far more than it imported. With the foreign money, it bought assets in the economies of other countries, such as the USA, Continental Europe, and the future Commonwealth of Nations. These assets naturally earned a lot of income, as they accumulated over many decades. The income from these assets was so large that, after the 1880's, the UK ran a trade deficit but still had a current account surplus.
In the case of the UK, the current account surplus from the NFFI was still large enough that the UK could continue to buy foreign assets that earned income, even as its trade deficit grew during the early 20th century.
by Abu Yahya February 14, 2009
Get the foreign factor incomemug. Of or related to the United States of America; term coined by Frank Lloyd Wright to refer to his new ideal for architecture. This word is preferable to "American" since there are dozens of countries in North and South America. In some Latin American countries, such as Brazil, the use of "American" to refer to US nationals is considered offensive and officially discouraged.
While Canadians and Usonians share a common heritage and close proximity, there are some subtle cultural differences.
by Abu Yahya October 16, 2008
Get the Usonianmug. (FINANCE) when a private equity fund sells a company it has taken private to another fund. Usually financed with junk bonds.
The secondary buyout became a hot trend in the period 2005-2008, partly because other segments of the equities markets were doing so poorly. The hedge funds were willing to buy the junk bonds because they believed they had mastered the risk control; but the deals themselves were absurd.
The whole purpose of a leveraged buyout is to restructure the target company so profits from its resale can be used to pay for the deal. But if a capital management firm has already issued the junk bonds to finance a restructuring, there's little hope of another takeover artist squeezing any more profit out of restructuring. The whole point is to scam the markets.
The secondary buyout became a hot trend in the period 2005-2008, partly because other segments of the equities markets were doing so poorly. The hedge funds were willing to buy the junk bonds because they believed they had mastered the risk control; but the deals themselves were absurd.
The whole purpose of a leveraged buyout is to restructure the target company so profits from its resale can be used to pay for the deal. But if a capital management firm has already issued the junk bonds to finance a restructuring, there's little hope of another takeover artist squeezing any more profit out of restructuring. The whole point is to scam the markets.
The sudden popularity of the secondary buyout never made any sense, except as a scam. As a vehicle for peddling exotic financial derivatives, it was mildly interesting, but there was no common sense to the idea of two consecutive takeover artists doing LBO's of the same company. One of them had to be incompetent for there to be any reason for it.
by Abu Yahya September 1, 2010
Get the secondary buyoutmug. *noun*; series of programs enacted by the administration of Franklin D. Roosevelt (1933-1945) in response to the Great Depression. This definition refers to the New Deal in US history (as opposed to the current "New Deal" in Great Britain).
The main architects of the New Deal were Harry Hopkins, Henry A. Wallace, and Harold L. Ickes. The chief prigrams were:
--- The Works Progress Administration (WPA);
--- the Public Works Administration (PWA);
--- the Agricultural Adjustment Administration (AAA).
These were set up to address industrial and farming failures.
Other programs addressed a long-standing need:
--- the Civilian Conservation Corps (CCC);
--- the Tennessee Valley Authority (TVA), which introduced electrical power infrastructure to much of the impoverished rural South;
--- the Civil Works Administration (CWA), which supplied electrical power generation;
--- the Federal Depository Insurance Corporation (FDIC), which provides insurance for bank accounts;
--- the Securities Exchange Commission (SEC);
--- the Social Security Administration (SSA);
Legislation included:
--- the National Labor Relations Act (NLRA), or Wagner Act, which gave most workers the right to organize;
--- the National Industrial Recovery Act (NIRA), which was struck down in 1935 by the US Supreme Court;
--- the Fair Labor Standards Act (FLSA), which set basic working standards.
The New Deal's main impact was to establish basic protections for workers, consumers, and farmers. While some of these protections could have been better designed, they perform an indispensable function. In terms of actual fiscal policy, the New Deal was far too small to hasten the end of the Great Depression itself.
The main architects of the New Deal were Harry Hopkins, Henry A. Wallace, and Harold L. Ickes. The chief prigrams were:
--- The Works Progress Administration (WPA);
--- the Public Works Administration (PWA);
--- the Agricultural Adjustment Administration (AAA).
These were set up to address industrial and farming failures.
Other programs addressed a long-standing need:
--- the Civilian Conservation Corps (CCC);
--- the Tennessee Valley Authority (TVA), which introduced electrical power infrastructure to much of the impoverished rural South;
--- the Civil Works Administration (CWA), which supplied electrical power generation;
--- the Federal Depository Insurance Corporation (FDIC), which provides insurance for bank accounts;
--- the Securities Exchange Commission (SEC);
--- the Social Security Administration (SSA);
Legislation included:
--- the National Labor Relations Act (NLRA), or Wagner Act, which gave most workers the right to organize;
--- the National Industrial Recovery Act (NIRA), which was struck down in 1935 by the US Supreme Court;
--- the Fair Labor Standards Act (FLSA), which set basic working standards.
The New Deal's main impact was to establish basic protections for workers, consumers, and farmers. While some of these protections could have been better designed, they perform an indispensable function. In terms of actual fiscal policy, the New Deal was far too small to hasten the end of the Great Depression itself.
by Abu Yahya March 6, 2009
Get the New Dealmug.