abu yahya's definitions
(ECONOMICS) An emergency in which a financial or government institution cannot meet its current obligations in an acceptable form of payment. Different from insolvency, which is where that same institution cannot be realistically expected to EVER meet its obligations.
A good example of the difference is a run on a bank, especially in the days before deposit insurance. A perfectly honest, well-run bank could have all of its books in order, and be paying its depositors in legal tender, when suddenly a panic strikes and everyone wants their deposits all at once. This is necessarily impossible, and forces the bank's officers to default on their debts.
Often, the bank could resume operation later when it was established that it held performing assets greater than deposits. More recently, liquidity crises have been a problem suffered by countries facing capital flight
A good example of the difference is a run on a bank, especially in the days before deposit insurance. A perfectly honest, well-run bank could have all of its books in order, and be paying its depositors in legal tender, when suddenly a panic strikes and everyone wants their deposits all at once. This is necessarily impossible, and forces the bank's officers to default on their debts.
Often, the bank could resume operation later when it was established that it held performing assets greater than deposits. More recently, liquidity crises have been a problem suffered by countries facing capital flight
In 1997, several countries in East Asia were stricken with a liquidity crisis. In many cases, such as Malaysia, the panicked response had nothing whatever to do with fundamentals; it was sheer herd mentality.
by Abu Yahya May 5, 2010
Get the liquidity crisis mug.A currency whose value is set by the currency markets; money whose exchange rate relative to other currencies is determined mainly or entirely by unrestricted trading in the currency. Most currencies are dirty float|dirty floats, which means that the government issuing them attempts to manage their traded value in some way; or else hard peg|hard pegs, in which the value is tied to something specific.
When a currency is floating, then its value may rise because the county is running a trade surplus, or it is running a capital account surplus. Floating currencies are not fiat money, although they are often confused for each other.
When a currency is floating, then its value may rise because the county is running a trade surplus, or it is running a capital account surplus. Floating currencies are not fiat money, although they are often confused for each other.
by abu yahya September 28, 2008
Get the floating currency mug.German, *noun*: "foundation"; a type of business organization dating from the late 19th century in which one or more companies are owned by a foundation. The foundation, in turn, is governed not by shareholders, but by whomever is chartered as a stakeholder in the firm, such as workers, financial planners, local residents of the town where the firm operates, and so on.
The biggest company owned by a foundation is Robert Bosch GmBH, which is 92% owned by Robert Bosch Stiftung (Stuttgart, Germany). Bertelsmann AG (Guetersloh, Germany) is owned by the Bertelsmann-Stiftung, which appears to possess the largest endowment of any German foundation; the affiliated company owns an enormous media empire.
Plural: Stiftungen
The biggest company owned by a foundation is Robert Bosch GmBH, which is 92% owned by Robert Bosch Stiftung (Stuttgart, Germany). Bertelsmann AG (Guetersloh, Germany) is owned by the Bertelsmann-Stiftung, which appears to possess the largest endowment of any German foundation; the affiliated company owns an enormous media empire.
Plural: Stiftungen
The prevalence of the *Stiftung* in German industry probably contributed to the excellence of German manufactures, since the affiliated companies were managed by engineers.
by Abu Yahya February 23, 2009
Get the Stiftung mug.World's 3rd largest company (2009 sales: $310 billion); 2nd largest oil company (after Royal Dutch Shell).
Founded by John D. Rockefeller in 1862 in Titusville, PA as Rockefeller & Andrews Oil. Using combination of trust agreement and a holding company based in NJ, grew to totally dominate oil production, transport, and retailing. Standard Oil incorporated 1870.
Trust agreements revoked (court order) 1892; SO holding company broken up 1911 into 35 entities, including: Exxon, Mobil, Chevron, ARCO, Conoco, and Amoco. Amoco and ARCO were absorbed by British Petroleum, while Conoco merged with Phillips, Chevron merged with Texaco, and Exxon merged with Mobil.
Apologies to Urban Dictionary for misspelling the company's name "Exxon Mobile" in the definition for BP, p.l.c..
Founded by John D. Rockefeller in 1862 in Titusville, PA as Rockefeller & Andrews Oil. Using combination of trust agreement and a holding company based in NJ, grew to totally dominate oil production, transport, and retailing. Standard Oil incorporated 1870.
Trust agreements revoked (court order) 1892; SO holding company broken up 1911 into 35 entities, including: Exxon, Mobil, Chevron, ARCO, Conoco, and Amoco. Amoco and ARCO were absorbed by British Petroleum, while Conoco merged with Phillips, Chevron merged with Texaco, and Exxon merged with Mobil.
Apologies to Urban Dictionary for misspelling the company's name "Exxon Mobile" in the definition for BP, p.l.c..
Exxon Mobil operates 37 oil refineries in 20 countries; in the USA, it owns and operates about 12,000 service stations.
Exxon Mobil mostly evaded any significant financial responsibility for the 1989 Exxon Valdez tanker crash, the 2nd worst oil spill in US history (since eclipsed by the 2010 Deepwater Horizon blowout. That disaster cost the company about $4.5 billion, paid out over 20 years (or roughly 2% of profits over that time period).
Exxon Mobil mostly evaded any significant financial responsibility for the 1989 Exxon Valdez tanker crash, the 2nd worst oil spill in US history (since eclipsed by the 2010 Deepwater Horizon blowout. That disaster cost the company about $4.5 billion, paid out over 20 years (or roughly 2% of profits over that time period).
by Abu Yahya July 18, 2010
Get the Exxon Mobil mug.the current account balance; the net flow of liquid assets to the citizens of a particular country. The external balance includes the trade balance, net foreign factor income, and net foreign aid *received*. Usually the main cause of an external deficit is a trade deficit.
by Abu Yahya February 14, 2009
Get the external balance mug.(FINANCE) a type of financial derivative; a certificate that gives the owner the right to buy (or sell) a fixed amount of a specific thing for a specific price (the strike price).
An option to buy something else is called a call option; an option to sell something else is called a put option. An option has a strike price, which is the price at which you are entitled to buy (or sell) the underlying commodity, or stock, or foreign currency, or whatever.
Options allow the owner to speculate in the possibility that market prices will change in a certain direction, without actually spending the value of the underlying item. For example, suppose WTI crude is $85.75/bbl. In order to make $1000 off of a $0.25 increase in the price, you ordinarily would need to own 4000 bbls of crude, which you can't afford. So, instead, you buy a call option for 4000 bbls with a strike price of $85.75/bbl (i.e., exactly what it is now). This option will cost a tiny amount of money. If the price goes up to $86.00/bbl, you don't own the oil, but your options are now worth $1000 to somebody who wants to buy that oil.
An option with intrinsic value (for example,a call option whose strike price is less than the spot price) is "in the money." An option with no intrinsic value is "out of the money."
An option to buy something else is called a call option; an option to sell something else is called a put option. An option has a strike price, which is the price at which you are entitled to buy (or sell) the underlying commodity, or stock, or foreign currency, or whatever.
Options allow the owner to speculate in the possibility that market prices will change in a certain direction, without actually spending the value of the underlying item. For example, suppose WTI crude is $85.75/bbl. In order to make $1000 off of a $0.25 increase in the price, you ordinarily would need to own 4000 bbls of crude, which you can't afford. So, instead, you buy a call option for 4000 bbls with a strike price of $85.75/bbl (i.e., exactly what it is now). This option will cost a tiny amount of money. If the price goes up to $86.00/bbl, you don't own the oil, but your options are now worth $1000 to somebody who wants to buy that oil.
An option with intrinsic value (for example,a call option whose strike price is less than the spot price) is "in the money." An option with no intrinsic value is "out of the money."
BILL: So, options are just like gambling, am I right?
ANNA: For most people. But if you're already in the business of buying or selling a particular thing, an option can protect you against a bad price movement.
BILL: But options on stocks? I mean, unless a company wants to reward its own executives, or something?
ANNA: Well, you might need options on stocks to hedge risk, if you're a fund manager. That way you can focus on long-run investing.
ANNA: For most people. But if you're already in the business of buying or selling a particular thing, an option can protect you against a bad price movement.
BILL: But options on stocks? I mean, unless a company wants to reward its own executives, or something?
ANNA: Well, you might need options on stocks to hedge risk, if you're a fund manager. That way you can focus on long-run investing.
by Abu Yahya April 5, 2010
Get the option mug.*noun*; a concept central to the idea of Keynesian economics. Under this theory, business cycles (recessions, depressions, booms, recoveries) are caused by a failure of total demand across the entire economy to match total output.
Aggregate demand is not merely influenced by people's ability to buy what they produce; it is also influenced by the marginal propensity to consume (MPC). If the MPC is less than 1, then an increase in national income will be matched by a smaller increase in aggregate demand, causing unemployment to rise and prices to fall.
Aggregate demand is not merely influenced by people's ability to buy what they produce; it is also influenced by the marginal propensity to consume (MPC). If the MPC is less than 1, then an increase in national income will be matched by a smaller increase in aggregate demand, causing unemployment to rise and prices to fall.
...When we say that the expectation of an increased demand, i.e. a raising of the aggregate demand function, will lead to an increase in aggregate output, we really mean that the firms, which own the capital equipment, will be induced to associate with it a greater aggregate employment of labour
J.M. Keynes, *The General Theory of Employment, Interest, and Money* (1936), Ch.4
J.M. Keynes, *The General Theory of Employment, Interest, and Money* (1936), Ch.4
by Abu Yahya March 3, 2009
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