Abu Yahya's definitions
(FINANCE) Used either as a noun: a situation in which a trader controls the supply of a traded item, such as shares of stock, supplies of a commodity, etc.
Or else, used as a verb: to obtain control over the supply of a thing, so that one can drive the price up to extremely high levels.
Cornering the market for anything (or getting a corner) is extremely difficult and requires not only immense amounts of money (usually borrowed for the purpose), but also timing and the ability to bluff opponents.
A corner is ultimately a long position in the sense that it is a direct attack on investors taking a short position.
Or else, used as a verb: to obtain control over the supply of a thing, so that one can drive the price up to extremely high levels.
Cornering the market for anything (or getting a corner) is extremely difficult and requires not only immense amounts of money (usually borrowed for the purpose), but also timing and the ability to bluff opponents.
A corner is ultimately a long position in the sense that it is a direct attack on investors taking a short position.
The corner must be timed very precisely, because it cannot last for more than a very short time. Even when the the price of the thing (like, say, silver) goes up to very, very high levels, more supplies cannot come onto the market or the corner will be lost.
At the same time, there has to be a target of the corner--some group of people who have to buy the cornered item no matter how high the price goes (otherwise, the quantity demanded will just go to zero). For this reason, corners are nearly always part of an attempt to squeeze the shorts.
At the same time, there has to be a target of the corner--some group of people who have to buy the cornered item no matter how high the price goes (otherwise, the quantity demanded will just go to zero). For this reason, corners are nearly always part of an attempt to squeeze the shorts.
by Abu Yahya April 5, 2010
Get the Cornermug. *noun*; a method of representing the economy as the sum of many identical individuals and firms, each represented by a system of mathematical equations. The Rational Expectations Hypothesis (REH) takes its name from the premise that economic actors, i.e., everyone, do not make consistent errors about the present or future behavior of markets.
REH was devised mainly as a rebuke to Keynesian economics, and in particular, the strategy of fiscal policy or monetary policy.
According to the REH, fiscal policy does not alter aggregate demand because the "average" person recognizes that her lifetime income is not increasing--so she needs to save rather than spend the stimulus money, in anticipation of higher taxes in the future.
At the same time, monetary policy does not work because it relies on lowering interest rates to make more money available; more money means inflation, but people have to be deceived into thinking prices for their product are going up, so they will expand production. According to REH, people or firms will figure this out, and see increased demand as mere inflation. Instead of increasing output and employment, they'll want to raise prices so they can meet their future bills.
According to REH, both monetary and fiscal policy rely on illusions to work; and since people (on average) will make rational estimates o the future, they will defeat these illusions.
REH was devised mainly as a rebuke to Keynesian economics, and in particular, the strategy of fiscal policy or monetary policy.
According to the REH, fiscal policy does not alter aggregate demand because the "average" person recognizes that her lifetime income is not increasing--so she needs to save rather than spend the stimulus money, in anticipation of higher taxes in the future.
At the same time, monetary policy does not work because it relies on lowering interest rates to make more money available; more money means inflation, but people have to be deceived into thinking prices for their product are going up, so they will expand production. According to REH, people or firms will figure this out, and see increased demand as mere inflation. Instead of increasing output and employment, they'll want to raise prices so they can meet their future bills.
According to REH, both monetary and fiscal policy rely on illusions to work; and since people (on average) will make rational estimates o the future, they will defeat these illusions.
The rational expectations hypothesis states that we can break the realization of a return into an expected return that depends on the current information set and an unexpected component that depends only on new information.
by Abu Yahya March 3, 2009
Get the rational expectations hypothesis mug. (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
Get the Aérospatialemug.