Bankruptcy Notice of closure attached to the door of a Computer Shop outlet the day after its parent company declared "bankruptcy" (strictly, put into administration) in the United Kingdom Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Etymology The word bankruptcy is derived from Italian banca rotta, meaning "broken bench", which may stem from a custom of breaking a moneychanger's bench or counter to signify his insolvency, or which may be only a figure of speech. History In Ancient Greece, bankruptcy did not exist. In Islamic teaching, according to the Qur'an, an insolvent person was deemed to be allowed time to be able to pay out his debt. The Statute of Bankrupts of 1542 was the first statute under English law dealing with bankruptcy or insolvency. Bankruptcy is also documented in East Asia. Fraud Brazil
Economics in Excel - Microeconomics Principles Principles of Microeconomics: Study Guide Excel-based counterparts to all graphs in the chapters of Gwartney, Stroup, Sobel, and Macpherson Economics may be accessed below. For each chapter we provide an Excel workbook and a set of questions to guide users through the worksheets. The study guides are Word documents. The links to the individual workbooks and associated assignment sheets follow the chapter overviews below. Click on the chapter number here to move to the relevant part of this page: 1341718202324252627. A similar set of exercises based on chapters from Mankiw, Economics, is available here. Chapter 1. This material follows the text quite closely, using Excel workbooks to illustrate the graphical analysis that the text develops. Chapter 3. The Study Guide covers three related topics: Demand, Supply, and Market Equilibrium. This workbook examines demand. This workbook examines supply. This workbook examines market equilibrium. Chapter 4. Chapter 5. Chapter 17. Chapter 18.
Demand deposit Demand deposits, bank money or scriptural money are funds held in demand deposit accounts in commercial banks. These account balances are usually considered money and form the greater part of the narrowly defined money supply of a country. History In the United States, demand deposits arose following the 1865 tax of 10% on the issuance of state bank notes; see history of banking in the USA. In the U.S., demand deposits only refer to funds held in checking accounts (or cheque offering accounts) other than NOW accounts; however, in a 1970s and 1980s response to the 1933 promulgation of Regulation Q in the U.S., demand deposits in some cases came to allow easier access to funds from other types of accounts (e.g. savings accounts and money market accounts). Money supply Demand deposits are usually considered part of the narrowly defined money supply, as they can be used, via checks and drafts, as a means of payment for goods and services and to settle debts. See also
The Online Books Page: Archives and Indexes General -- Non-English Language -- Specialty There's a vast range of online literature beyond what we index individually on The Online Books Page. Below we list some of the major sources and indexes of free online texts, in all languages, both general and specialized. General These are large, general-purpose collections with substantial English-language listings. Large-scale repositories -- Significant indexes and search aids -- Significant smaller-scale archives Large-scale repositories These are big collections of texts, big enough to act as small library-like collections in their own right. Significant indexes and search aids The sites below primarily provide search engines, indexes or useful link lists for finding online books. Significant smaller-scale archives Everything else we see worth listing that doesn't fit in more specialized categories. Non-English Languages Tyler Jones's iLoveLanguages site has a comprehensive listing of various language and literature resources. Agriculture Audio
Systemic risk In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. It can be defined as "financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries". It refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure, which could potentially bankrupt or bring down the entire system or market. It is also sometimes erroneously referred to as "systematic risk". Explanation Systemic risk has been associated with a bank run which has a cascading effect on other banks which are owed money by the first bank in trouble, causing a cascading failure. Measurement of systemic risk
Simplicity First published Fri Oct 29, 2004; substantive revision Thu Feb 25, 2010 Most philosophers believe that, other things being equal, simpler theories are better. But what exactly does theoretical simplicity amount to? Syntactic simplicity, or elegance, measures the number and conciseness of the theory's basic principles. Ontological simplicity, or parsimony, measures the number of kinds of entities postulated by the theory. 1. There is a widespread philosophical presumption that simplicity is a theoretical virtue. We may assume the superiority ceteris paribus of the demonstration which derives from fewer postulates or hypotheses. Moving to the medieval period, Aquinas writes If a thing can be done adequately by means of one, it is superfluous to do it by means of several; for we observe that nature does not employ two instruments where one suffices (Aquinas 1945, p. 129). Compare this to the following passage from Einstein, writing 150 years later. (i) How is simplicity to be defined? 2.
Cascading failure An animation demonstrating how a single failure may result in other failures throughout a network. A cascading failure is a failure in a system of interconnected parts in which the failure of a part can trigger the failure of successive parts. Such a failure may happen in many types of systems, including power transmission, computer networking, finance and bridges. Cascading failures usually begin when one part of the system fails. Cascading failure in power transmission Cascading failure is common in power grids when one of the elements fails (completely or partially) and shifts its load to nearby elements in the system. This failure process cascades through the elements of the system like a ripple on a pond and continues until substantially all of the elements in the system are compromised and/or the system becomes functionally disconnected from the source of its load. Examples Cascading failure caused the following power outages: Cascading failure in computer networks
Fractional reserve banking Fractional-reserve banking is the practice whereby a bank holds reserves in an amount equal to only a portion of the amount of its customers' deposits to satisfy potential demands for withdrawals. Reserves are held at the bank as currency, or as deposits reflected in the bank's accounts at the central bank. Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow to a multiple (called the money multiplier) of the underlying reserves of base money originally created by the central bank. Fractional-reserve banking is the current form of banking in all countries worldwide. History Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time. How it works In most legal systems, a bank deposit is not a bailment. Economic function Formula
Margin (finance) Margin buying refers to the buying of securities with cash borrowed from a broker, using other securities as collateral. This has the effect of magnifying any profit or loss made on the securities. The securities serve as collateral for the loan. The variation margin or mark to market is not collateral, but a daily payment of profits and losses. The seller of an option has the obligation to deliver the underlying of the option if it is exercised. Additional margin is intended to cover a potential fall in the value of the position on the following trading day. SMA and portfolio margins offer alternative rules for U.S. and NYSE regulatory margin requirements. Enhanced leverage is a strategy offered by some brokers that provides 4:1 or 6:1+ leverage. Example 1 An investor sells a call option, where the buyer has the right to buy 100 shares in Universal Widgets S.A. at 90¢. Example 2 Futures contracts on sweet crude oil closed the day at $65. Example 3 (ROM + 1)(1/trade duration in years) - 1
Derivative (finance) Many money managers use derivatives for a variety of purposes, such as hedging — by taking a position in a derivative, losses on portfolio holdings may be minimized or offset by profits on the derivative. Likewise, derivatives can be used to gain quicker and more efficient access to markets; for example, it may be easier and quicker to purchase an S & P 500 futures contract than to invest in the underlying securities. Derivatives are a contract between two parties that specify conditions (especially the dates, resulting values and definitions of the underlying variables, the parties' contractual obligations, and the notional amount) under which payments are to be made between the parties. The most common underlying assets include commodities, stocks, bonds, interest rates and currencies, but they can also be other derivatives, which adds another layer of complexity to proper valuation. Still, even these scaled down figures represent huge amounts of money.
Bank run Depositors clamor to withdraw their savings from a bank in Berlin, 13 July 1931 A bank run (also known as a run on the bank) occurs in a fractional reserve banking system when a large number of customers withdraw their deposits from a financial institution at the same time and either demand cash or transfer those funds into government bonds, precious metals or stones, or a safer institution because they believe that the financial institution is, or might become, insolvent. As a bank run progresses, it generates its own momentum, in a kind of self-fulfilling prophecy (or positive feedback loop) – as more people withdraw their deposits, the likelihood of default increases, thus triggering further withdrawals. This can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy. Several techniques have been used to try to prevent or mitigate the effects of bank runs. History Bank runs have also been used to blackmail individuals or governments.
1907 : un « bank run » fondateur aux Etats-Unis La panique bancaire, c'est à l'heure actuelle ce que cherchent à éviter les autorités chypriotes et européennes en repoussant de jour en jour la réouverture des établissements bancaires de l'île. Rares mais potentiellement lourds de conséquences, les retraits massifs d'argent liquide ont refait surface avec la crise financière : Northern Rock, Bear Stearns, Wachovia... Pris au piège, ces établissements menacés de banqueroute dès le début du krach financier de 2008 ont vu leurs clients se précipiter aux guichets par peur de voir leurs économies s'envoler. A Chypre, cette crainte est si forte qu'une fermeture de tous les établissements bancaires a été décrétée par les autorités, et ce jusqu'à au moins mardi. Retour sur un épisode fondateur de l'économie américaine. A l'origine était le cuivre, ou plutôt, une sombre histoire de spéculation (déjà !) Mais c'est seulement lorsque la crise touche les fonds de placement que la situation se dégrade réellement. Audrey Fournier
Tea Party (mouvement politique) Un article de Wikipédia, l'encyclopédie libre. Manifestation de partisans du Tea Party à Washington devant le Capitole le 12 septembre 2009. Le Tea Party est un mouvement politique hétéroclite aux États-Unis, contestataire, de type libertarien qui s'oppose à l'État fédéral et ses impôts. Le Tea Party émerge au début de la présidence Obama, dans le contexte de la crise économique de 2008-2010 elle-même liée à la crise financière. Le mouvement critique notamment les dépenses gouvernementales faites sous l'administration Obama, tant celles qui soutiennent le système financier et la relance économique que celles qui fondent une protection sociale commune au niveau fédéral (Patient Protection and Affordable Care Act). Le Tea Party fait référence au Boston Tea Party qui fut une révolte politique à Boston (alors capitale de la Colonie de la baie du Massachusetts) contre le Parlement britannique, en 1773. FreedomWorks, dirigé par le républicain Dick Armey, contribue au financement du mouvement.