(ECONOMICS) money that is used by a business to buy fixed capital or circulating capital. For a very new company or a company expanding extremely quickly, finance capital can sometimes be used to pay workers (before revenues overtake operating costs).
Finance capital can be borrowed from a commercial bank, raised by an investment bank (through an issue of stock; see initial public offering) or though a bond issue, commercial paper, or even a repurchase agreement.
Finance capital can be borrowed from a commercial bank, raised by an investment bank (through an issue of stock; see initial public offering) or though a bond issue, commercial paper, or even a repurchase agreement.
by Abu Yahya September 24, 2010
(FINANCE) a financial derivative whose underlying asset is a stock. The simplest kinds include the equity swap and the option.
As opposed to currency derivatives, interest rate derivatives, commodity derivatives, and so on. An equity swap typically involves an "equity side" of the transaction AND something else, like interest rates or oil prices.
Equity derivatives can be written on indices (e.g., the S&P 500, the FTSE-100, NASDAQ) as well as on stocks. In fact, they are often bought "out of the money" by mutual fund managers as insurance against a catastrophic decline in the fund value.
As opposed to currency derivatives, interest rate derivatives, commodity derivatives, and so on. An equity swap typically involves an "equity side" of the transaction AND something else, like interest rates or oil prices.
Equity derivatives can be written on indices (e.g., the S&P 500, the FTSE-100, NASDAQ) as well as on stocks. In fact, they are often bought "out of the money" by mutual fund managers as insurance against a catastrophic decline in the fund value.
One other reason that poison pills are back in favor is the growth of synthetic equity derivative swap transactions, where a “short party” agrees to pay a “long party” the cash flows from a particular amount of a target company’s stock. In exchange, the long party agrees to pay a fee and to cover any decrease in the market value of the stock ... Through such transactions, a long party can suddenly become a significant stockholder of a target company without warning.
--Dykema Gossett & Andrew H. Connor "The poison pill resurgence," Lexology (15 March 2010)
--Dykema Gossett & Andrew H. Connor "The poison pill resurgence," Lexology (15 March 2010)
by Abu Yahya April 15, 2010
(ECONOMICS) adjusted for the time of year the data refer to.
Economic statistics are often reported as rates of change from month to month, or quarter to quarter. However, some months, such as November and December, have very high retail sales, while May through September have very high home sales. For this reason, data is sometimes "seasonally adjusted" to offset ordinary seasonal variations.
The US Federal Reserve System reports changes in GDP from quarter to quarter in annualized form; so, for example, during the last quarter of 2004, US GDP was (about) $3,044.6 billion. But it was reported as an annualized (and seasonally adjusted) $11734.9. If you divide that by 4 you get 2957.8, which reflects the fact that the Fed shaved 86.8 billion off its estimate of economic activity for 2004Q4 and reallocated it to Q1 & Q2.
The reason the Fed (and everyone else) does this is to measure economic change separately from the usual seasonal change in business activity.
Economic statistics are often reported as rates of change from month to month, or quarter to quarter. However, some months, such as November and December, have very high retail sales, while May through September have very high home sales. For this reason, data is sometimes "seasonally adjusted" to offset ordinary seasonal variations.
The US Federal Reserve System reports changes in GDP from quarter to quarter in annualized form; so, for example, during the last quarter of 2004, US GDP was (about) $3,044.6 billion. But it was reported as an annualized (and seasonally adjusted) $11734.9. If you divide that by 4 you get 2957.8, which reflects the fact that the Fed shaved 86.8 billion off its estimate of economic activity for 2004Q4 and reallocated it to Q1 & Q2.
The reason the Fed (and everyone else) does this is to measure economic change separately from the usual seasonal change in business activity.
BILL: Hey! This data on GDP growth is way different from that data.
ANNA: That's because one set of data is seasonally adjusted. The Fed tweaked the numbers so economic growth from quarter to quarter reflects changing economic conditions, instead of ordinary yearly cycles.
BILL: You mean it's not an evil plot?
ANNA: It's an evil plot to make you forget about Christmas shopping season and labor day white sales.
BILL: Gasp! You mean the Fed is behind the War on Christmas?????
ANNA: That's because one set of data is seasonally adjusted. The Fed tweaked the numbers so economic growth from quarter to quarter reflects changing economic conditions, instead of ordinary yearly cycles.
BILL: You mean it's not an evil plot?
ANNA: It's an evil plot to make you forget about Christmas shopping season and labor day white sales.
BILL: Gasp! You mean the Fed is behind the War on Christmas?????
by Abu Yahya September 08, 2010
(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 05, 2010
(FINANCE) a bond issued by the US Department of the Treasury. Unlike longer-term bonds, with regular scheduled interest payments, a T-bill is purely discounted. In other words, the lender--the person buying the bond--pays a price lower than the face value of the bond. When the bond matures (after, say, 91 days), then the buyer is paid the face value.
The yield on the T-bill is usually very low; for example, yesterday 13-week T-bill rates were 4.01%. Their price is set at auction.
The yield on the T-bill is usually very low; for example, yesterday 13-week T-bill rates were 4.01%. Their price is set at auction.
People usually suppose that the Federal Reserve System sets interest rates, but this only applies to the federal funds rate. The rates on other treasury securities, like T-bills, are set by auction.
by Abu Yahya May 14, 2010
the net purchase of financial assets in a country by foreigners. Put another way, the capital account balance is the net influx of money from overseas investors. It includes net purchases of domestic financial assets by foreigners minus net purchases of foreign financial assets by domestic citizens.
The capital account balance over short periods of time (e.g., a fortnight) is extremely volatile; over a period of a year, however, it usually offsets the current account balance. For example, in all years since 1980, the USA has run a large-to-huge current account deficit, but in most years it has run a capital account surplus that is almost as big as the current account deficit.
The capital account balance over short periods of time (e.g., a fortnight) is extremely volatile; over a period of a year, however, it usually offsets the current account balance. For example, in all years since 1980, the USA has run a large-to-huge current account deficit, but in most years it has run a capital account surplus that is almost as big as the current account deficit.
The capital account balance often permits a huge trade deficit to persist over several decades without a significant fall in the exchange rate of a nation's currency.
by Abu Yahya February 14, 2009
(ECONOMICS) Persons unemployed 15 weeks or longer, as a percent of the civilian labor force.
The US Bureau of Labor Statistics regularly publishes six estimates of unemployment. The others are U-2, U-3, U-4, U-5, and U-6. Eurostat publishes one monthly estimate of unemployment for the European Union, which is approximately midway between U-3 and U-4.
The unemployment statistics for the USA are collected through a monthly Current Population Survey (CPS) (also known as the household survey) and an establishment survey.
The US Bureau of Labor Statistics regularly publishes six estimates of unemployment. The others are U-2, U-3, U-4, U-5, and U-6. Eurostat publishes one monthly estimate of unemployment for the European Union, which is approximately midway between U-3 and U-4.
The unemployment statistics for the USA are collected through a monthly Current Population Survey (CPS) (also known as the household survey) and an establishment survey.
Analysts use U-1 as a measure of the proportion of people that can no longer replace employment earnings with unemployment insurance or savings.
by Abu Yahya July 16, 2010