abu yahya's definitions
(FINANCE) a limited liability partnership (LLP), originally limited to 99 partners, and organized to trade securities under specialized guidelines. The first hedge funds were organized to be a counterparty to the riskiest forms of derivative transactions: writing exotic options or swaps in which the buyer transferred most risks (and potential gains) to the hedge fund, but then offsetting the risk with different derivatives.
The first hedge funds benefited (or thought they benefited) from the Black-Scholes formula used to calculate the value of options; supposedly a hedge fund manager could design an immensely complex portfolio consisting mainly of explosively volatile instruments , whose pieces were supposed to absorb each other's risk.
Hedge funds mainly avoided the consequences of the financial meltdown they helped create, racking up gains through the '00's that far exceeded the rest of the stock market.
The first hedge funds benefited (or thought they benefited) from the Black-Scholes formula used to calculate the value of options; supposedly a hedge fund manager could design an immensely complex portfolio consisting mainly of explosively volatile instruments , whose pieces were supposed to absorb each other's risk.
Hedge funds mainly avoided the consequences of the financial meltdown they helped create, racking up gains through the '00's that far exceeded the rest of the stock market.
The hedge fund used to play a major role in absorbing and structuring the risks associated with hedging risks associated with large portfolios, but they now are sophisticated gambling enterprises.
Hedge funds supply market liquidity for the most exotic of instruments.
Hedge funds supply market liquidity for the most exotic of instruments.
by Abu Yahya September 2, 2010
Get the hedge fund mug.(FINANCE) for a financial instrument, the person/institution who takes the opposite position. For example, in a credit default swap (CDS), the buyer is someone who needs insurance against the possibility that a borrower will default on a loan. In that case, the counterparty is whoever receives the CDS premiums, and pays out in the event of default.
The purpose of financial options is to minimize risk to the buyer; therefore, it creates potentially lucrative opportunities for the counterparty, because the counterparty takes on so much risk.
by Abu Yahya April 5, 2010
Get the counterparty mug.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 September 29, 2008
Get the capital mug.(ECONOMICS) when a government has to restructure spending by massively cutting social programs, development programs, and subsidies on basic necessities. Often accompanied by taxes increases, especially on lower incomes (since the poor cannot escape tax hikes).
Usually we use the term "austerity program" when the government in question has to backtrack on its ideological commitments. An example of this is France, after June 1982. The Socialist government of Mitterrand had just implemented a raft of major new social welfare programs, and was promptly forced to cut everything back when the deficit ballooned.
by Abu Yahya May 5, 2010
Get the austerity program mug.(ECONOMICS) A bank that is empowered to issue currency. In the USA, between 1863 (National Bank Act) and 1935, any bank with a federally issued charter (i.e., a national bank) was allowed to issue currency. After 1914, few did.
The US Treasury issued a small number of banknotes until 1971.
In the UK, banknotes of the Bank of England are legal tender; but the Royal Bank of Scotland is also a bank of issue.
Today, in almost every country of the world, the sole bank of issue is the central bank of that country.
The US Treasury issued a small number of banknotes until 1971.
In the UK, banknotes of the Bank of England are legal tender; but the Royal Bank of Scotland is also a bank of issue.
Today, in almost every country of the world, the sole bank of issue is the central bank of that country.
by Abu Yahya May 5, 2010
Get the bank of issue mug.(FINANCE) bonds issued by the treasury of a country.
In the USA, the US Department of the Treasury serves as the underwriter for the federal government; it floats bonds and short term securities ("paper"), which is then used by central banks around the world as hot money.
Includes
--the t-bill: short term (>91 days); discounted
--the treasury note: up to 10 years; coupons
--the treasury bond: longer than 20 years; coupons
In the USA, the US Department of the Treasury serves as the underwriter for the federal government; it floats bonds and short term securities ("paper"), which is then used by central banks around the world as hot money.
Includes
--the t-bill: short term (>91 days); discounted
--the treasury note: up to 10 years; coupons
--the treasury bond: longer than 20 years; coupons
by Abu Yahya May 5, 2010
Get the Treasury securities mug.(ECONOMICS) international bank created after World War 2 to coordinate currency stabilization. Main policy tool consists of lending money to central bank of countries facing a liquidity crisis.
In some cases, as when a member government is insolvent, the IMF will impose a structural adjustment program (SAP) requiring the government to jettison programs it has to serve the poor. For this reason, the IMF is often harshly criticized.
In some cases, as when a member government is insolvent, the IMF will impose a structural adjustment program (SAP) requiring the government to jettison programs it has to serve the poor. For this reason, the IMF is often harshly criticized.
It is often said that the IMF makes economic crises worse by imposing the same austerity program everywhere, thereby further reducing a member state's ability to pay its sovereign debt.
by Abu Yahya May 5, 2010
Get the IMF mug.