192 definitions by Abu Yahya
(FINANCE) the situation in which a derivatives trader with a short position is wrong about the behavior of the market. Having sold shares of stock he doesn't own, he is now compelled to buy them at a higher price than he sold them for (in order to reimburse whomever he borrowed the shares from).
If the short position was taken by writing naked options (i.e., issuing call options of stock the trader doesn't happen to have), then the trader has to buy shares of underlying stock in order to honor the options.
It's extremely expensive for traders to have to cover their shorts.
If the short position was taken by writing naked options (i.e., issuing call options of stock the trader doesn't happen to have), then the trader has to buy shares of underlying stock in order to honor the options.
It's extremely expensive for traders to have to cover their shorts.
The surprising stock rally came as a shock. Nicholas Leeson had been riding high, but now he was furiously covering shorts, and driving the share prices higher still. By closing bell, he was ruined.
by Abu Yahya May 5, 2010
In economics, (1) Materials or equipment used to produce goods (e.g., tools, parts, inventory, buildings, fixtures, hours of training); or (2) money that is used in a business venture. Capital is created by saving, rather than consuming, economic output. Over time, saving accumulates into capital; it also depreciates.
by Abu Yahya August 4, 2008
*noun*; a school of economic thought prevalent after World War 2; around 1980, Keynesianism was supposedly superseded by monetarism, and then by the rational expectations hypothesis. Theory is named for John M. Keynes (1881-1946), who argued against the then-mainstream view that the economy was "self correcting." Keynes' book introducing his economic theory was The General Theory of Employment, Interest, and Money (1936).
*Basic Concept*
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The basic concept of Keynesianism is that each economy has a level of aggregate demand, which does not respond to price or income levels in the same way that classical economics says it should. Rising income, for example, *does not* lead to a matching increase in consumption or business investment. Business investment is driven by investment opportunity, not {only by interest rates. Savings is driven by liquidity preference, not only by interest rates.
Keynes suggested that, for any economy, there was a marginal propensity to consume that was less than one. Hence, if the national income rose by 10%, consumption would rise by something less than 10%. This would lead to some production not being consumed, waste, and unemployment.
*What Keynesianism Says We Should Do*
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In 1936, when Keynes wrote *The General Theory*, most of the world was suffering from the Great Depression. Keynes recommended that the national government stimulation aggregate demand through a policy of deficit stimulus. In other words, the country should create adequate levels of aggregate demand by spending more than it took in as taxes (fiscal policy).
Also, Keynesianism held that aggregate demand could be stimulated *up to a point* by lowering interest rates (monetary policy).
*Application*
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In the USA and other large industrial countries, fiscal and monetary policy has been attempted often. After 1980, the Federal Reserve chair (Paul Volcker) was a monetarist, who claimed to reject Keynesianism. Nobel laureates in economics almost unanimously attacked Keynesianism as outmoded and wrong-headed, but governments continue to use fiscal stimulus and interest rate cuts in response to recessions.
*Basic Concept*
_______________________________________
The basic concept of Keynesianism is that each economy has a level of aggregate demand, which does not respond to price or income levels in the same way that classical economics says it should. Rising income, for example, *does not* lead to a matching increase in consumption or business investment. Business investment is driven by investment opportunity, not {only by interest rates. Savings is driven by liquidity preference, not only by interest rates.
Keynes suggested that, for any economy, there was a marginal propensity to consume that was less than one. Hence, if the national income rose by 10%, consumption would rise by something less than 10%. This would lead to some production not being consumed, waste, and unemployment.
*What Keynesianism Says We Should Do*
_______________________________________
In 1936, when Keynes wrote *The General Theory*, most of the world was suffering from the Great Depression. Keynes recommended that the national government stimulation aggregate demand through a policy of deficit stimulus. In other words, the country should create adequate levels of aggregate demand by spending more than it took in as taxes (fiscal policy).
Also, Keynesianism held that aggregate demand could be stimulated *up to a point* by lowering interest rates (monetary policy).
*Application*
_______________________________________
In the USA and other large industrial countries, fiscal and monetary policy has been attempted often. After 1980, the Federal Reserve chair (Paul Volcker) was a monetarist, who claimed to reject Keynesianism. Nobel laureates in economics almost unanimously attacked Keynesianism as outmoded and wrong-headed, but governments continue to use fiscal stimulus and interest rate cuts in response to recessions.
Keynesianism held out the prospect that the state could reconcile the private ownership of the means of production with democratic management of the economy.
Adam Przeworski, *Capitalism and social democracy* (1986)
Adam Przeworski, *Capitalism and social democracy* (1986)
by Abu Yahya March 3, 2009
(AEROSPACE) French company created in 1970 from a massive consolidation of the French aerospace industry. Inherited and completed the French component of the Concorde SST, a supersonic jet transport. Aérospatiale was a partner in Airbus from the beginning.
Later, all of the partners in Airbus (except British Aerospace, which sold its stake in the consortium to the others) merged into a new, super-sized company called EADS. EADS is the parent company of Airbus, Eurocopter, and Arianespace.
Later, all of the partners in Airbus (except British Aerospace, which sold its stake in the consortium to the others) merged into a new, super-sized company called EADS. EADS is the parent company of Airbus, Eurocopter, and Arianespace.
Aérospatiale was one of the most technically brilliant companies of the late 20th century. It's all part of EADS now.
by Abu Yahya September 1, 2010
A person who refines political views to accommodate the prevailing winds; particularly, one who contrives self-serving excuses for political views now generally recognized to have been stupid.
In journalism, the current handwringer-in-chief is the New Yorker writer George Packer, whose book *The Assassins' Gate* has met with high praise from ... a subset of pundits I call trimmers... trimmers criticize ... the foolish president, but avoid unequivocal denunciations of this foolish war.
--John R, MacArthur, "Pro-War Liberals Frozen in the Headlights"
--John R, MacArthur, "Pro-War Liberals Frozen in the Headlights"
by Abu Yahya January 23, 2009
national income and product accounting; refers to the formal system of measuring capital accounts, current accounts, and gross domestic product.
National income and product accounting is the centerpiece of national economic
accounting in the United States. The NIPA's show the real and nominal value of output, the composition of output, and the distribution across types of income generated in its production.
Abraham & Mackie, *Beyond the Market,* p.40
accounting in the United States. The NIPA's show the real and nominal value of output, the composition of output, and the distribution across types of income generated in its production.
Abraham & Mackie, *Beyond the Market,* p.40
by Abu Yahya February 14, 2009
(HISTORY OF IRAN) More accurately known as Reza Shah; founder of the Pahlavi Dynasty (1925-1979), shah (emperor) of Iran from 1925 to his ouster in 1942 (by invading British and Russian armies).
Born, 1878; died, 1944. Originally in the regular Iranian Army, when the Iranian monarchy was bankrupted he contracted out to command a cossack division for the Anglo Persian Oil Company (British Petroleum). As a result, he actually had a lot of money and was able to become the prime minister (1922), and then depose the old Dynasty, the Qejars.
As Shah, he promised to revise the hated concession to Anglo Iranian Oil Company, but they managed to stall and thwart him with the help of the International Court of Justice. As a result, he turned to the Axis Powers. When World War II broke out, he offered some help to the Germans and Italians, so the British invaded and replaced him with his son, Shah Muhammad Reza.
Born, 1878; died, 1944. Originally in the regular Iranian Army, when the Iranian monarchy was bankrupted he contracted out to command a cossack division for the Anglo Persian Oil Company (British Petroleum). As a result, he actually had a lot of money and was able to become the prime minister (1922), and then depose the old Dynasty, the Qejars.
As Shah, he promised to revise the hated concession to Anglo Iranian Oil Company, but they managed to stall and thwart him with the help of the International Court of Justice. As a result, he turned to the Axis Powers. When World War II broke out, he offered some help to the Germans and Italians, so the British invaded and replaced him with his son, Shah Muhammad Reza.
Shah Reza Pahlavi is often compared with Ataturk, a contemporaneous dictator of Turkey. However, Reza Shah was much more reliant on a cooperative clergy than Ataturk was.
by Abu Yahya July 17, 2010