abu yahya's definitions
(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. In economics, a monetary policy in which the value of the local currency is determined by the foreign exchange markets, with some intervention by the government (or its allies) in the event of excessive or dangerous movements.
Usually the term is applied when the country ignores long term shifts in value, but intervenes directly to avoid crises.
Usually the term is applied when the country ignores long term shifts in value, but intervenes directly to avoid crises.
Most of the nations in the world have neither a hard peg nor floating currency, but something in between--a dirty float, in which trade is under some restrictions.
by abu yahya June 24, 2008
Get the dirty floatmug. (FINANCE) a call option that is written by a party who possesses none of the underlying stock; a commitment to sell a fixed amount of something at a fixed price, of something one does not happen to have.
Writing an option means selling a certificate that guarantees the holder can buy a traded item for a guaranteed price (strike price). The person who writes the option is betting that the price of the underlying stock will go down (shorting a stock, AKA a short position). If the person writing the option is correct, then she makes money off the sale of the option, but does not have to worry about honoring the option, since it is out of the money and has no intrinsic value.
If the person writing the option is wrong, and the price of the underlying stock goes up, then she must buy the item at the higher spot price specifically to sell it at the low strike price ("short cover"). In rare cases, a person who makes this sort of error will actually drive the spot price much higher than it would have gone ordinarily.
Writing an option means selling a certificate that guarantees the holder can buy a traded item for a guaranteed price (strike price). The person who writes the option is betting that the price of the underlying stock will go down (shorting a stock, AKA a short position). If the person writing the option is correct, then she makes money off the sale of the option, but does not have to worry about honoring the option, since it is out of the money and has no intrinsic value.
If the person writing the option is wrong, and the price of the underlying stock goes up, then she must buy the item at the higher spot price specifically to sell it at the low strike price ("short cover"). In rare cases, a person who makes this sort of error will actually drive the spot price much higher than it would have gone ordinarily.
Naked option writing is quite risky because you can make only a limited amount of money. yet the risks are high.
by Abu Yahya April 15, 2010
Get the naked optionmug. (FINANCE) originally, a bond rated as not investment grade by a credit rating agency (e.g., Standard & Poor, Ernst & Young, or Moody's).
Later, a bond was a financial instrument deliberately created to have absurdly high levels of risk (of default), which was then priced in and "hedged" by a fund manager. Junk bonds are routinely used to finance leveraged buyouts.
Later, a bond was a financial instrument deliberately created to have absurdly high levels of risk (of default), which was then priced in and "hedged" by a fund manager. Junk bonds are routinely used to finance leveraged buyouts.
Michael Milken was the junk bond innovator who figured out how to make them an effective investment vehicle. Yes, he later went to jail for securities law violations.
by Abu Yahya September 1, 2010
Get the junk bondmug. (FINANCE) a company that exists for the sole purpose of owning a controlling interest in the several branches of a bank.
Owing to the interplay of US federal and state banking laws, it is often necessary for a bank to incorporate itself as a separate and distinct company in different states, or for different business functions (e.g., capital management, underwriting/investment banking, savings banking, etc.).
One of the exasperating benefits that bank holding companies get is a further limitation of liability. Often, the structure of the bank holding company is such that one of the firms owned (like Washington Mutual Bank, Inc.) can be insolvent, without resulting in the liquidation of the holding company.
Owing to the interplay of US federal and state banking laws, it is often necessary for a bank to incorporate itself as a separate and distinct company in different states, or for different business functions (e.g., capital management, underwriting/investment banking, savings banking, etc.).
One of the exasperating benefits that bank holding companies get is a further limitation of liability. Often, the structure of the bank holding company is such that one of the firms owned (like Washington Mutual Bank, Inc.) can be insolvent, without resulting in the liquidation of the holding company.
Practically every financial intermediary in the USA is now owned by a bank holding company. They're totally insidious!
by Abu Yahya May 5, 2010
Get the bank holding companymug. (IRANIAN HISTORY) Secret police of Iran during the reign of Shah Muhammad Reza (r.1941-1979); began operations in 1957, four years after Operation Ajax. Gen. Herbert Norman Schwarzkopf (father of Gen. Norman Schwarzkopf was a US Army liaison who trained SAVAK in intelligence tactics; additional training was provided by the Israeli military.
General Teymur Bakhtia, the main Iranian military officer involved in Operation Ajax, was rewarded with command of SAVAK; he was dismissed in 1961 because he was believed to be organizing a coup. Subsequently, the Shah had his own secret service to spy on the secret service.
SAVAK's activities to include gathering intelligence and neutralizing the regime's opponents. An elaborate system was created to monitor all facets of political life. For example, a censorship office was established to monitor journalists, literary figures, and academics throughout the country; it took appropriate measures against those who fell out of line. Universities, labor unions, and peasant organizations, among others, were all subjected to intense surveillance by SAVAK agents and paid informants. The agency was also active abroad, especially in monitoring Iranian students who publicly opposed Pahlavi rule.
General Teymur Bakhtia, the main Iranian military officer involved in Operation Ajax, was rewarded with command of SAVAK; he was dismissed in 1961 because he was believed to be organizing a coup. Subsequently, the Shah had his own secret service to spy on the secret service.
SAVAK's activities to include gathering intelligence and neutralizing the regime's opponents. An elaborate system was created to monitor all facets of political life. For example, a censorship office was established to monitor journalists, literary figures, and academics throughout the country; it took appropriate measures against those who fell out of line. Universities, labor unions, and peasant organizations, among others, were all subjected to intense surveillance by SAVAK agents and paid informants. The agency was also active abroad, especially in monitoring Iranian students who publicly opposed Pahlavi rule.
SAVAK mostly concentrated on Tudeh and populist organizations until the late 1960's, since the clergy was mostly aligned with the monarchy until 1964, when the regime started to redistribute endowments of land held by the religious orders.
by Abu Yahya July 19, 2010
Get the SAVAKmug. a{n alleged} miracle that serves no purpose or is actively evil. For example, in the Apocryphal New Testament, in the book *Protevangelion*, XI. Mary's immaculate conception has caused immense turmoil for Joseph and Mary, not merely because Joseph assumes Mary has conceived with another mortal, but also because she does so far too soon. This is therefore resolved by more miracles, that fail to convince anyone (xi.19). In XIII., Joseph has to get a midwife, and finds that time has stopped (so he can find her quickly?). But in the following chapter, the midwife is useless and Mary delivers miraculously too. So there was no point at all to the miracle.
Other examples: a story in the Talmud of a slain holy man's blood, which bubbled miraculously on the spot where he was killed. Nebuchadnezzar is said to arrive there after his conquest of Jerusalem and demand to know why the blood bubbles. When he finds out, he believes he has to appease the spirit of the holy man and so he "sacrifices" 80,000 people on the spot where the blood bubbles. Wouldn't God stop the bubbling just to get Nebuchadnezzar to stop murdering people there?
Other examples: a story in the Talmud of a slain holy man's blood, which bubbled miraculously on the spot where he was killed. Nebuchadnezzar is said to arrive there after his conquest of Jerusalem and demand to know why the blood bubbles. When he finds out, he believes he has to appease the spirit of the holy man and so he "sacrifices" 80,000 people on the spot where the blood bubbles. Wouldn't God stop the bubbling just to get Nebuchadnezzar to stop murdering people there?
If Bush was a perverse miracle sent from God to punish our nation for its wickedness, then would it not have been more godlike to make us less wicked--instead?
by Abu Yahya February 15, 2009
Get the perverse miraclemug.