1) Fiat currency systems are unquantifiable, irreconcilable, and tentative since the total money supply is unknown and balances can be revoked at any time.
2) Fiat incentivizes constant debt accumulation since the total of all balances is negative. Savers' wealth is eroded by inflation while debtors benefit from new money.
3) Under fiat, the optimal strategy is to take on as much debt as possible to purchase hard assets and benefit from inflation and debt financing. Not taking on debt is considered reckless.
Fiat currency relies on government decree and centralized control of monetary policy. It allows new money to be created through lending by banks and increases the money supply. This risks inflation and externalizes the costs of defaults. In contrast, cryptocurrencies like Bitcoin use decentralized consensus protocols to control the money supply without reliance on political authority.
14 Outdated Investing 'Rules' You Don't Need To Follow AnymoreScott Tominaga
As the times change, so does the world of finance. Some investors are still stuck on “rules” of investing that have become obsolete, and sticking with these old adages may hurt you in the long run.
Why invent ? The top reason to invest is to see a return (profit) on the investment. Financial Security: Many people decide to learn more about investing because they want to feel secure financially. Lifestyle: Earning money through investing can help people afford a desired lifestyle so they can afford those things they ‘want’. Investing can also be a way for people to get their money working for them (instead of having to work for every dollar) to free up time to live the lifestyle they desire.
The document discusses various topics related to money markets, including:
1) Money market securities have an active secondary market because transactions can be arranged over phone and completed electronically, allowing for easy trading after initial sale.
2) A 15-year bond close to maturity would not be considered a money market instrument as it was originally issued for 15 years, while money market securities mature in one year or less.
3) Money markets have lower costs than banks due to fewer regulatory requirements around interest rates and reserve balances.
4) Money markets provide a place for short-term investing and borrowing to meet cash flow needs for governments, banks, and other large institutions.
This document summarizes the strategies and services of Singer Financial Group. They aim to create substantial and sustainable advantages for clients' financial portfolios through strategies that protect principal, retain gains, and guarantee income. They emphasize downside protection using "Finsurance" strategies that blend finance and insurance, such as equity-indexed annuities. Their goal is to help clients enjoy retirement without losing money or running out of money using a "Fortress Balance Sheet" approach.
Asset Class Spring/Summer Collection 2013Redington
This document discusses how pension funds and insurance companies need to access innovative investment ideas in order to meet their funding goals in the current challenging financial environment. The author's investment consultants identify the best ideas in the market, help develop them for clients' needs, and deliver them to clients. The publication, called Asset Class, aims to provide clients with the latest cutting-edge investment strategies and ideas being used or considered by other pension funds and insurance companies. It is organized according to the "7 Steps to Full Funding" framework to help clients make intelligent investment decisions and achieve strong results.
The document discusses stocks and bonds as the two main types of marketable securities, noting that while they have some similarities as financial instruments that enable investment, they differ significantly in aspects such as ownership structure, cash flow predictability, and risk level. Stocks represent ownership in a company and have uncertain dividends and capital appreciation, while bonds are essentially loans that guarantee periodic interest payments and return of principal, making them generally less risky than stocks.
A financial crisis can have wide-ranging effects. It begins when the value of assets like stocks, housing, or currencies suddenly decreases. This can lead to a recession if economic activity declines. Financial crises occur for reasons like risky lending, herd behavior, and regulatory failures. They can cause unemployment to rise as demand falls, leading to less production and spending in a recessionary spiral.
Fiat currency relies on government decree and centralized control of monetary policy. It allows new money to be created through lending by banks and increases the money supply. This risks inflation and externalizes the costs of defaults. In contrast, cryptocurrencies like Bitcoin use decentralized consensus protocols to control the money supply without reliance on political authority.
14 Outdated Investing 'Rules' You Don't Need To Follow AnymoreScott Tominaga
As the times change, so does the world of finance. Some investors are still stuck on “rules” of investing that have become obsolete, and sticking with these old adages may hurt you in the long run.
Why invent ? The top reason to invest is to see a return (profit) on the investment. Financial Security: Many people decide to learn more about investing because they want to feel secure financially. Lifestyle: Earning money through investing can help people afford a desired lifestyle so they can afford those things they ‘want’. Investing can also be a way for people to get their money working for them (instead of having to work for every dollar) to free up time to live the lifestyle they desire.
The document discusses various topics related to money markets, including:
1) Money market securities have an active secondary market because transactions can be arranged over phone and completed electronically, allowing for easy trading after initial sale.
2) A 15-year bond close to maturity would not be considered a money market instrument as it was originally issued for 15 years, while money market securities mature in one year or less.
3) Money markets have lower costs than banks due to fewer regulatory requirements around interest rates and reserve balances.
4) Money markets provide a place for short-term investing and borrowing to meet cash flow needs for governments, banks, and other large institutions.
This document summarizes the strategies and services of Singer Financial Group. They aim to create substantial and sustainable advantages for clients' financial portfolios through strategies that protect principal, retain gains, and guarantee income. They emphasize downside protection using "Finsurance" strategies that blend finance and insurance, such as equity-indexed annuities. Their goal is to help clients enjoy retirement without losing money or running out of money using a "Fortress Balance Sheet" approach.
Asset Class Spring/Summer Collection 2013Redington
This document discusses how pension funds and insurance companies need to access innovative investment ideas in order to meet their funding goals in the current challenging financial environment. The author's investment consultants identify the best ideas in the market, help develop them for clients' needs, and deliver them to clients. The publication, called Asset Class, aims to provide clients with the latest cutting-edge investment strategies and ideas being used or considered by other pension funds and insurance companies. It is organized according to the "7 Steps to Full Funding" framework to help clients make intelligent investment decisions and achieve strong results.
The document discusses stocks and bonds as the two main types of marketable securities, noting that while they have some similarities as financial instruments that enable investment, they differ significantly in aspects such as ownership structure, cash flow predictability, and risk level. Stocks represent ownership in a company and have uncertain dividends and capital appreciation, while bonds are essentially loans that guarantee periodic interest payments and return of principal, making them generally less risky than stocks.
A financial crisis can have wide-ranging effects. It begins when the value of assets like stocks, housing, or currencies suddenly decreases. This can lead to a recession if economic activity declines. Financial crises occur for reasons like risky lending, herd behavior, and regulatory failures. They can cause unemployment to rise as demand falls, leading to less production and spending in a recessionary spiral.
This document discusses various investment strategies and asset classes for growing wealth over the long term, including equities, property, bonds, asset allocation funds, and the benefits of each. It emphasizes that investing for growth requires having exposure to growth assets like equities and property through a portfolio in order to beat inflation. It also stresses the importance of patience, planning, diversification, and a long-term perspective to achieve the best returns when investing.
Factoring involves the ongoing assignment of invoices for goods and services sold on open account terms from a client to a factoring company. This allows the client to receive immediate cash flow in exchange for the receivables. Factoring establishes a long-term relationship and can provide services like credit protection, collections, and financing. There are different types of factoring arrangements including recourse vs. non-recourse and disclosed vs. undisclosed. Clients typically receive 80% of the invoice value in advances. Factoring first emerged in the 1920s and is now a large global industry, particularly in developed countries.
1. New money is created through the issuance of new debt, not by printing currency. Getting others into debt allows for the "mining" of new fiat currency in the same way gold prospecting mines new gold.
2. There are no effective restraints on credit growth under the fiat system, and deflationary recessions are typically the only thing that curb excess lending and money supply expansion.
3. Inflation affects different goods and assets in varying ways, so it is better understood as a vector rather than a single rate. Scarce goods, real estate, education and healthcare increase faster than official inflation measures, while digital and mass-produced goods see less price growth.
BONDS GUIDE
Considered by many to be a vital element in any financial plan, bonds can be used to help you grow your wealth.
In this bonds guide we take a look at financial bonds: explaining how bonds work; the vital factors you should consider before making bonds investments; and strategies to consider when making bond investments.
The document discusses how accredited investors can become financial sponsors and earn high returns of up to 42% by lending money through crowdfunding platforms like Open Source Capital to fund real estate projects. As a financial sponsor, the investor would loan money to real estate owners/developers and receive a promote - a percentage of profits from reselling portions of the loan to other investors. An example is provided where a financial sponsor loans $100,000 at 15% interest, sells 90% of the loan for a 20% promote, and earns 42% overall compared to the 12% return for other investors. The document then provides details on the investment process, participants, criteria for sponsors, and how Open Source Capital sources, evaluates and manages
This document provides an introduction to investing and key concepts like risk and return. It explains that balancing risk and return is important for achieving financial goals. While higher risk investments offer potential for greater returns, they also carry more uncertainty. The document advocates diversifying investments across different asset classes like stocks, bonds, property and cash to reduce risk. It provides data showing how various asset classes have performed over time, with higher risk assets generally providing higher average returns but also more variability in returns. The key is choosing an appropriate mix of assets based on an individual's risk tolerance and time horizon.
Deloitte Report "Global Powers of Retail 2014"Oliver Grave
This document provides an overview and analysis of the global economic outlook and its implications for retailers. It discusses economic growth forecasts and challenges facing major economies like China, the United States, and Europe. For China, it notes a slowing economy and issues like debt from shadow banking that could impact sustained growth. The US is expected to see better growth in 2014 than 2013, assuming the Federal Reserve's tapering of monetary policy proceeds smoothly. Political uncertainties pose risks to predictions.
pl_najwieksze_sieci_handlowe_Global_Powers_of_ _Retailing_2014Blossom Out
This document provides an overview and analysis of the global economic outlook and its implications for retailers. It discusses near-term growth prospects for major economies like China, the United States, and Europe. For China, growth around 7-8% is expected but debt issues pose risks. The US is strengthening but Federal Reserve policy normalization presents uncertainty. Political decisions could significantly impact forecasts. Retailers face both opportunities and challenges depending on how individual countries and regions perform.
Forfaiting is a method of trade finance that allows exporters to sell their medium-term foreign accounts receivable at a discount on a non-recourse basis to specialized finance firms called forfaiters. This eliminates the risk of non-payment for the exporter once goods have been delivered. It is suitable for exports of capital goods, commodities, and large projects with credit terms of 180 days to seven years. While it has a higher cost than commercial loans, forfaiting eliminates risk for exporters and allows them to offer medium-term financing in higher risk markets. Exporters work with forfaiters to structure deals and deliver goods, then the forfaiter collects payments from importers and assumes
Niinue is a marketplace investment platform that enables Kenya's middle class to invest in short, medium, and long-term opportunities. It uses debt-equity crowdfunding to allow investors to make small investments in startups and growing companies, spreading their risk across multiple ventures. By pooling capital from many investors and investing in scalable companies, Niinue aims to generate high returns for investors while also providing capital to entrepreneurs.
Interest Rates Explained 2024 What You Need to Know.docxAmit Kumar
Have you ever wondered why the stock market jumps on news about inflation, or why a government's decision to change interest rates sends the financial world into a frenzy? It's a complex dance, but at the heart of it lies the relationship between interest rates and the stock market. Understanding this connection is like decoding a secret language that can help you make smarter investment decisions. Get ready to explore how interest rate shifts shape businesses, consumer behaviour, and ultimately, the prices of stocks you see on the ticker.
From global economic trends to your own portfolio, interest rates hold surprising sway. Let's start with a timeline of major turning points in interest rate history – those moments that sent shockwaves through the markets…
Imagine you've taken out a loan to buy a house. The interest rate on that loan is essentially the extra cost you pay for borrowing the money. Let's say your interest rate increases. Now, your monthly payments go up, leaving you with less disposable income to spend elsewhere. This is just one-way interest rates touch our lives.
The Bigger Picture
At its core, an interest rate is the "price" of borrowing money. Banks charge interest on loans they give out, and they may offer interest on money you deposit with them. Governments even charge interest on bonds they issue! It's a crucial lever in the financial system, influencing how much businesses and consumers spend, save, and invest.
A truly unique example comes from Sweden. In 2009, to encourage borrowing and boost the economy during a financial crisis, the central bank implemented a negative interest rate policy. This meant people actually paid the bank to hold onto their money! While this might sound strange, it incentivized people to spend or invest their cash, which could stimulate economic activity. This policy wasn't without drawbacks, and Sweden eventually moved away from negative rates. But it serves as a fascinating illustration of how central banks can use interest rates as unconventional tools.
Types of Interest Rates
You'll often hear terms like:
• Repo Rate: The central bank (like India's RBI) sets this rate, at which it lends to commercial banks. Changes to the repo rate ripple through the economy.
• Reverse Repo Rate: The rate the central bank pays on banks' deposits with it. This helps manage the flow of money.
• Bank Lending Rates: Rates banks set on loans to businesses and individuals (mortgage rates, car loans, etc.)
Key takeaway: Interest rates are not one-size-fits-all. They play different roles, impacting our pockets and the broader economy.
Now that we understand what interest rates are, let's explore how changes in these rates can send ripple effects through the stock market.
How Interest Rates Affect the Stock Market
Businesses and Interest Rates
Businesses, the backbone of the stock market, feel the impact of interest rates in several ways:
Read full article at newspatron or download PDF.
The document discusses the mortgage markets and the financial crisis. It covers topics like fixed-rate versus adjustable-rate mortgages, the subprime mortgage market, securitization of mortgages, and the housing bubble that contributed to the financial crisis. The crisis occurred as risky mortgages were made, packaged into securities, and spread widely through the financial system. When the housing market declined, it exposed problems and caused instability in financial markets.
Tag Young Professionals - Merrill Lynch PresentationMelanie Brandt
The document provides an overview of strategies for achieving a healthy financial life, including budgeting, investing, retirement savings, and financing a home. It discusses developing a budget and paying down high-interest debt. It also covers topics like buying vs renting a home, creating an investment portfolio based on goals and risk tolerance, saving for retirement through vehicles like 401ks and IRAs, and tips for young investors like starting to save early.
A bond has a negative yield when the investor collects less money when the bond is mature than they paid to buy the bond. In short, the bond issuer is paid for issuing the bond.
https://youtu.be/N5z6eAsUx1s
9 Mortgage MarketsCHAPTER OBJECTIVESThe specific objectives of.docxblondellchancy
9 Mortgage Markets
CHAPTER OBJECTIVES
The specific objectives of this chapter are to:
· ▪ provide a background on mortgages,
· ▪ describe the common types of residential mortgages,
· ▪ explain the valuation and risk of mortgages,
· ▪ explain mortgage-backend securities, and
· ▪ explain how mortgage problems led to the 2008- 2009 credit crisis.
9-1 BACKGROUND ON MORTGAGES
A mortgage is a form of debt created to finance investment in real estate. The debt is secured by the property, so if the property owner does not meet the payment obligations, the creditor can seize the property. Financial institutions such as savings institutions and mortgage companies serve as intermediaries by originating mortgages. They consider mortgage applications and assess the creditworthiness of the applicants.
The mortgage represents the difference between the down payment and the value to be paid for the property. The mortgage contract specifies the mortgage rate, the maturity, and the collateral that is backing the loan. The originator charges an origination fee when providing a mortgage. In addition, if it uses its own funds to finance the property, it will earn profit from the difference between the mortgage rate that it charges and the rate that it paid to obtain the funds. Most mortgages have a maturity of 30 years, but 15-year maturities are also available.
9-1a How Mortgage Markets Facilitate the Flow of Funds
WEB
www.mbaa.org
News regarding the mortgage markets.
The means by which mortgage markets facilitate the flow of funds are illustrated in Exhibit 9.1. Financial intermediaries originate mortgages and finance purchases of homes. The financial intermediaries that originate mortgages obtain their funding from household deposits. They also obtain funds by selling some of the mortgages that they originate directly to institutional investors in the secondary market. These funds are then used to finance more purchases of homes, condominiums, and commercial property. Overall, mortgage markets allow households and corporations to increase their purchases of homes, condominiums, and commercial property and thereby finance economic growth.
Institutional Use of Mortgage Markets Mortgage companies, savings institutions, and commercial banks originate mortgages. Mortgage companies tend to sell their mortgages in the secondary market, although they may continue to process payments for the mortgages that they originated. Thus their income is generated from origination and processing fees, and not from financing the mortgages over a long-term period. Savings institutions and commercial banks commonly originate residential mortgages. Commercial banks also originate mortgages for corporations that purchase commercial property. Savings institutions and commercial banks typically use funds received from household deposits to provide mortgage financing. However, they also sell some of their mortgages in the secondary market.
Exhibit 9.1 How Mortgage Markets Facilitate t ...
This document discusses key aspects of savings, investment, and the financial system. It introduces how savings and investment are related through the savings-investment identity. Private investment is mostly done using other people's money obtained through stock sales or borrowing. Borrowers are charged an interest rate. The financial system helps facilitate investment by reducing transaction costs, risk, and improving liquidity through various financial assets like loans, bonds, stocks and bank deposits.
This document discusses various topics related to personal finance, including the meaning of personal finance, areas of personal finance like income, spending, savings, investments and protection. It explains the importance of personal finance and financial literacy. It describes different sources of income and spending. It discusses the differences between savings and investments. It also covers asset classes like equity, gold, debt, real estate, mutual funds and types of financing like equity financing and debt financing.
The Real Estate Property Investing is to demystify the world of real estate investing as a strategy to help readers increase their personal finances and dispel certain beliefs around investing.
Essential of Technology Entrep. & Innovation-Chapter ten financing strategy ...Motaz Agamawi
In chapter ten, we are introducing the concepts of the financial strategy including the dept and equity alternatives.
This course provide the students with a conceptual knowledge regarding the essentials for management practices of a technology-based organization, and the evolution of technology. The topics covered in this course would include: • Introduction to the concept of entrepreneurship. • What entrepreneurs do and their importance to economy • How to seize business opportunity; • Know the process of creativity and difference between invention and innovation • Know how innovation is important as a dimension of entrepreneurship • Critical factors in managing technology; including • The Time Factor (Osborn effect) • Technology Push and Market Pull • The S-Curve of Technology • Technology and Product Life Cycle • The Chain Equation of Technology Innovation • Price Knowledge Gape Relation • Difference between Entrepreneurship and Stewardship Management • Difference between technology leader and followers • Competition and Competitiveness Concepts. • The process of the technological innovation; • Who are the customers; and • How to optimize cost and find finance for your projects • Demonstrate the importance of business plan, including the marketing and financial plans and how to prepare it. • Know the structure and management of a technology organization
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This document discusses various investment strategies and asset classes for growing wealth over the long term, including equities, property, bonds, asset allocation funds, and the benefits of each. It emphasizes that investing for growth requires having exposure to growth assets like equities and property through a portfolio in order to beat inflation. It also stresses the importance of patience, planning, diversification, and a long-term perspective to achieve the best returns when investing.
Factoring involves the ongoing assignment of invoices for goods and services sold on open account terms from a client to a factoring company. This allows the client to receive immediate cash flow in exchange for the receivables. Factoring establishes a long-term relationship and can provide services like credit protection, collections, and financing. There are different types of factoring arrangements including recourse vs. non-recourse and disclosed vs. undisclosed. Clients typically receive 80% of the invoice value in advances. Factoring first emerged in the 1920s and is now a large global industry, particularly in developed countries.
1. New money is created through the issuance of new debt, not by printing currency. Getting others into debt allows for the "mining" of new fiat currency in the same way gold prospecting mines new gold.
2. There are no effective restraints on credit growth under the fiat system, and deflationary recessions are typically the only thing that curb excess lending and money supply expansion.
3. Inflation affects different goods and assets in varying ways, so it is better understood as a vector rather than a single rate. Scarce goods, real estate, education and healthcare increase faster than official inflation measures, while digital and mass-produced goods see less price growth.
BONDS GUIDE
Considered by many to be a vital element in any financial plan, bonds can be used to help you grow your wealth.
In this bonds guide we take a look at financial bonds: explaining how bonds work; the vital factors you should consider before making bonds investments; and strategies to consider when making bond investments.
The document discusses how accredited investors can become financial sponsors and earn high returns of up to 42% by lending money through crowdfunding platforms like Open Source Capital to fund real estate projects. As a financial sponsor, the investor would loan money to real estate owners/developers and receive a promote - a percentage of profits from reselling portions of the loan to other investors. An example is provided where a financial sponsor loans $100,000 at 15% interest, sells 90% of the loan for a 20% promote, and earns 42% overall compared to the 12% return for other investors. The document then provides details on the investment process, participants, criteria for sponsors, and how Open Source Capital sources, evaluates and manages
This document provides an introduction to investing and key concepts like risk and return. It explains that balancing risk and return is important for achieving financial goals. While higher risk investments offer potential for greater returns, they also carry more uncertainty. The document advocates diversifying investments across different asset classes like stocks, bonds, property and cash to reduce risk. It provides data showing how various asset classes have performed over time, with higher risk assets generally providing higher average returns but also more variability in returns. The key is choosing an appropriate mix of assets based on an individual's risk tolerance and time horizon.
Deloitte Report "Global Powers of Retail 2014"Oliver Grave
This document provides an overview and analysis of the global economic outlook and its implications for retailers. It discusses economic growth forecasts and challenges facing major economies like China, the United States, and Europe. For China, it notes a slowing economy and issues like debt from shadow banking that could impact sustained growth. The US is expected to see better growth in 2014 than 2013, assuming the Federal Reserve's tapering of monetary policy proceeds smoothly. Political uncertainties pose risks to predictions.
pl_najwieksze_sieci_handlowe_Global_Powers_of_ _Retailing_2014Blossom Out
This document provides an overview and analysis of the global economic outlook and its implications for retailers. It discusses near-term growth prospects for major economies like China, the United States, and Europe. For China, growth around 7-8% is expected but debt issues pose risks. The US is strengthening but Federal Reserve policy normalization presents uncertainty. Political decisions could significantly impact forecasts. Retailers face both opportunities and challenges depending on how individual countries and regions perform.
Forfaiting is a method of trade finance that allows exporters to sell their medium-term foreign accounts receivable at a discount on a non-recourse basis to specialized finance firms called forfaiters. This eliminates the risk of non-payment for the exporter once goods have been delivered. It is suitable for exports of capital goods, commodities, and large projects with credit terms of 180 days to seven years. While it has a higher cost than commercial loans, forfaiting eliminates risk for exporters and allows them to offer medium-term financing in higher risk markets. Exporters work with forfaiters to structure deals and deliver goods, then the forfaiter collects payments from importers and assumes
Niinue is a marketplace investment platform that enables Kenya's middle class to invest in short, medium, and long-term opportunities. It uses debt-equity crowdfunding to allow investors to make small investments in startups and growing companies, spreading their risk across multiple ventures. By pooling capital from many investors and investing in scalable companies, Niinue aims to generate high returns for investors while also providing capital to entrepreneurs.
Interest Rates Explained 2024 What You Need to Know.docxAmit Kumar
Have you ever wondered why the stock market jumps on news about inflation, or why a government's decision to change interest rates sends the financial world into a frenzy? It's a complex dance, but at the heart of it lies the relationship between interest rates and the stock market. Understanding this connection is like decoding a secret language that can help you make smarter investment decisions. Get ready to explore how interest rate shifts shape businesses, consumer behaviour, and ultimately, the prices of stocks you see on the ticker.
From global economic trends to your own portfolio, interest rates hold surprising sway. Let's start with a timeline of major turning points in interest rate history – those moments that sent shockwaves through the markets…
Imagine you've taken out a loan to buy a house. The interest rate on that loan is essentially the extra cost you pay for borrowing the money. Let's say your interest rate increases. Now, your monthly payments go up, leaving you with less disposable income to spend elsewhere. This is just one-way interest rates touch our lives.
The Bigger Picture
At its core, an interest rate is the "price" of borrowing money. Banks charge interest on loans they give out, and they may offer interest on money you deposit with them. Governments even charge interest on bonds they issue! It's a crucial lever in the financial system, influencing how much businesses and consumers spend, save, and invest.
A truly unique example comes from Sweden. In 2009, to encourage borrowing and boost the economy during a financial crisis, the central bank implemented a negative interest rate policy. This meant people actually paid the bank to hold onto their money! While this might sound strange, it incentivized people to spend or invest their cash, which could stimulate economic activity. This policy wasn't without drawbacks, and Sweden eventually moved away from negative rates. But it serves as a fascinating illustration of how central banks can use interest rates as unconventional tools.
Types of Interest Rates
You'll often hear terms like:
• Repo Rate: The central bank (like India's RBI) sets this rate, at which it lends to commercial banks. Changes to the repo rate ripple through the economy.
• Reverse Repo Rate: The rate the central bank pays on banks' deposits with it. This helps manage the flow of money.
• Bank Lending Rates: Rates banks set on loans to businesses and individuals (mortgage rates, car loans, etc.)
Key takeaway: Interest rates are not one-size-fits-all. They play different roles, impacting our pockets and the broader economy.
Now that we understand what interest rates are, let's explore how changes in these rates can send ripple effects through the stock market.
How Interest Rates Affect the Stock Market
Businesses and Interest Rates
Businesses, the backbone of the stock market, feel the impact of interest rates in several ways:
Read full article at newspatron or download PDF.
The document discusses the mortgage markets and the financial crisis. It covers topics like fixed-rate versus adjustable-rate mortgages, the subprime mortgage market, securitization of mortgages, and the housing bubble that contributed to the financial crisis. The crisis occurred as risky mortgages were made, packaged into securities, and spread widely through the financial system. When the housing market declined, it exposed problems and caused instability in financial markets.
Tag Young Professionals - Merrill Lynch PresentationMelanie Brandt
The document provides an overview of strategies for achieving a healthy financial life, including budgeting, investing, retirement savings, and financing a home. It discusses developing a budget and paying down high-interest debt. It also covers topics like buying vs renting a home, creating an investment portfolio based on goals and risk tolerance, saving for retirement through vehicles like 401ks and IRAs, and tips for young investors like starting to save early.
A bond has a negative yield when the investor collects less money when the bond is mature than they paid to buy the bond. In short, the bond issuer is paid for issuing the bond.
https://youtu.be/N5z6eAsUx1s
9 Mortgage MarketsCHAPTER OBJECTIVESThe specific objectives of.docxblondellchancy
9 Mortgage Markets
CHAPTER OBJECTIVES
The specific objectives of this chapter are to:
· ▪ provide a background on mortgages,
· ▪ describe the common types of residential mortgages,
· ▪ explain the valuation and risk of mortgages,
· ▪ explain mortgage-backend securities, and
· ▪ explain how mortgage problems led to the 2008- 2009 credit crisis.
9-1 BACKGROUND ON MORTGAGES
A mortgage is a form of debt created to finance investment in real estate. The debt is secured by the property, so if the property owner does not meet the payment obligations, the creditor can seize the property. Financial institutions such as savings institutions and mortgage companies serve as intermediaries by originating mortgages. They consider mortgage applications and assess the creditworthiness of the applicants.
The mortgage represents the difference between the down payment and the value to be paid for the property. The mortgage contract specifies the mortgage rate, the maturity, and the collateral that is backing the loan. The originator charges an origination fee when providing a mortgage. In addition, if it uses its own funds to finance the property, it will earn profit from the difference between the mortgage rate that it charges and the rate that it paid to obtain the funds. Most mortgages have a maturity of 30 years, but 15-year maturities are also available.
9-1a How Mortgage Markets Facilitate the Flow of Funds
WEB
www.mbaa.org
News regarding the mortgage markets.
The means by which mortgage markets facilitate the flow of funds are illustrated in Exhibit 9.1. Financial intermediaries originate mortgages and finance purchases of homes. The financial intermediaries that originate mortgages obtain their funding from household deposits. They also obtain funds by selling some of the mortgages that they originate directly to institutional investors in the secondary market. These funds are then used to finance more purchases of homes, condominiums, and commercial property. Overall, mortgage markets allow households and corporations to increase their purchases of homes, condominiums, and commercial property and thereby finance economic growth.
Institutional Use of Mortgage Markets Mortgage companies, savings institutions, and commercial banks originate mortgages. Mortgage companies tend to sell their mortgages in the secondary market, although they may continue to process payments for the mortgages that they originated. Thus their income is generated from origination and processing fees, and not from financing the mortgages over a long-term period. Savings institutions and commercial banks commonly originate residential mortgages. Commercial banks also originate mortgages for corporations that purchase commercial property. Savings institutions and commercial banks typically use funds received from household deposits to provide mortgage financing. However, they also sell some of their mortgages in the secondary market.
Exhibit 9.1 How Mortgage Markets Facilitate t ...
This document discusses key aspects of savings, investment, and the financial system. It introduces how savings and investment are related through the savings-investment identity. Private investment is mostly done using other people's money obtained through stock sales or borrowing. Borrowers are charged an interest rate. The financial system helps facilitate investment by reducing transaction costs, risk, and improving liquidity through various financial assets like loans, bonds, stocks and bank deposits.
This document discusses various topics related to personal finance, including the meaning of personal finance, areas of personal finance like income, spending, savings, investments and protection. It explains the importance of personal finance and financial literacy. It describes different sources of income and spending. It discusses the differences between savings and investments. It also covers asset classes like equity, gold, debt, real estate, mutual funds and types of financing like equity financing and debt financing.
The Real Estate Property Investing is to demystify the world of real estate investing as a strategy to help readers increase their personal finances and dispel certain beliefs around investing.
Essential of Technology Entrep. & Innovation-Chapter ten financing strategy ...Motaz Agamawi
In chapter ten, we are introducing the concepts of the financial strategy including the dept and equity alternatives.
This course provide the students with a conceptual knowledge regarding the essentials for management practices of a technology-based organization, and the evolution of technology. The topics covered in this course would include: • Introduction to the concept of entrepreneurship. • What entrepreneurs do and their importance to economy • How to seize business opportunity; • Know the process of creativity and difference between invention and innovation • Know how innovation is important as a dimension of entrepreneurship • Critical factors in managing technology; including • The Time Factor (Osborn effect) • Technology Push and Market Pull • The S-Curve of Technology • Technology and Product Life Cycle • The Chain Equation of Technology Innovation • Price Knowledge Gape Relation • Difference between Entrepreneurship and Stewardship Management • Difference between technology leader and followers • Competition and Competitiveness Concepts. • The process of the technological innovation; • Who are the customers; and • How to optimize cost and find finance for your projects • Demonstrate the importance of business plan, including the marketing and financial plans and how to prepare it. • Know the structure and management of a technology organization
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Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
Assessment and Planning in Educational technology.pptxKavitha Krishnan
In an education system, it is understood that assessment is only for the students, but on the other hand, the Assessment of teachers is also an important aspect of the education system that ensures teachers are providing high-quality instruction to students. The assessment process can be used to provide feedback and support for professional development, to inform decisions about teacher retention or promotion, or to evaluate teacher effectiveness for accountability purposes.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Thinking of getting a dog? Be aware that breeds like Pit Bulls, Rottweilers, and German Shepherds can be loyal and dangerous. Proper training and socialization are crucial to preventing aggressive behaviors. Ensure safety by understanding their needs and always supervising interactions. Stay safe, and enjoy your furry friends!
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
2. Fiat Balances are:
1- Unquantifiable:
● Nobody knows exactly how much fiat exists, and there is significant
disagreement over the correct method for calculating the fiat supply.
● M0, M1, M2, M3.
● There is no clear-cut answer on which measure actually constitutes
money, as the nature of fiat is to conflate future fiat with present fiat.
● We use M2 as World Bank data allows consistent measurement, and
growth rates are more important for us than aggregate quantities.
1
3. 2- Irreconcilable
● You cannot run the numbers on fiat. There is no way of
keeping track of all liabilities, assets, and issuance. There
is no hard limit on how much debt is issued and no easy
way to track it in real time.
2
4. 3- Tentative and revocable
● Your local node, and the master node can revoke any
balance at any time.
● There is no final clearance in the fiat monetary system.
3
5. 4- Negative:
● Only monetary system where the sum of all balances at any point
in time is negative.
● This monetization of debt incentivizes the creation of more
monetary tokens. This means that the fiat economic system is
highly geared toward the creation of more debt, and fiat users
are incentivized to get into debt as much as possible.
● Because of the enormous incentive to accumulate debt, and the
fact that the native token is not physical or scarce in any real
sense, financial institutions constantly generate negative
balances for their clients.
4
6. Fiat is a tiered system:
● Low tier users: physical paper money. Majority of users,
positive fiat balances.
● High level users: have digital fiat in bank accounts, and
can borrow fiat. Majority of global wealth and income:
usually negative balances. The better off you are, the more
debt you can secure.
5
7. ● Holders of positive balances are constantly being robbed
through inflation.
● Holders of negative balances are always insecure, ~2
missed loan repayments away from devastating
bankruptcy and a loss of collateral.
● Financial security, in the sense of having a stable amount
of liquid wealth saved for the future, is no longer available
in the current system.
● Fiat has effectively destroyed savings as a financial
instrument, with enormously negative consequences.
6
8. Fiat Savings
● Saving is the deferral of consumption from the present to the
future.
● Holding durable goods is the first form of saving.
● With the development of money, it became the most efficient
medium of saving. Liquid, fungible that can be exchanged for
other goods.
● The harder the money, the better it is for saving, the more it
incentivizes us to save
7
9. ● Human progress is the ability to hold harder money. The
harder the money, the lower our time preference, the more
savings are available to invest, the higher our productivity.
● The pinnacle saving technology was the gold coin. Great
salability across space and time.
● Anyone could save what they earn, spend it anywhere and
know the value would be held across time.
● Gold only increases in supply by 1-2%.
8
10. ● Then fiat came along and set back monetary technology
back millennia. Supply growth rate around 7% in the best
cases. Up to several hundred % in the worst cases?
● Now saving became much more complicated:
● Cash loses value.
● So investors turned to stock in the 1920s, which caused the
stock market crash.
● We can think of the stock market crash as the easy money
trap discussed in TBS.
9
11. ● 1934 separation of commercial banking from investment
banking
● But you cannot offer riskless returns that exceed inflation
● It worked briefly, and exceptionally, after WW2, as the world
adopted the dollar causing its value to increase and
finance government deficits and inflation.
● But this broke down with inflation.
10
12. ● After 1971, bonds became the saving vehicle: Easy money trap
again
● A common measure of the creditworthiness of any entity is the
ratio of its EBITDA (Earnings Before Interest, Taxes, Depreciation,
and Amortization) to its interest payments. Governments are rated
far higher than what this ratio would indicate for them had they
been operating in the free market. For example, a corporate
borrower with an EBITDA/interest ratio of 2.5 would be ranked BB−,
but the U.S. government has this ratio, and it is rated AAA. To justify
its AAA rating without fiat privilege, the U.S. government would
need to have an EBITDA twenty times larger than its interest
payment. Its income would need to be eight times higher than
what it currently is, or expenditures eight times smaller.
11
13. ● Monetizing bonds just created a massive boon for
government and corporations to borrow, leading to an
increase in bonds, and returns that cannot beat inflation
by late 2000's, arguably much earlier.
● The stock index became the new savings account post-
2009.
● But saving is not investing!
12
14. ● Investing is a cash outflow, while savings are held on a
balance sheet.
● Cash is acquired for salability, investments for cash flow.
● Investments involve risk
● People would keep a cash balance they would like to have
with certainty, and would risk their investment funds in
search of returns.
13
15. ● The problem with fiat is that simply maintaining the wealth
you already own requires significant active management
and expert decision-making. You need to develop
expertise in portfolio allocation, risk management, stock
and bond valuation, real estate markets, credit markets,
global macro trends, national and international monetary
policy, commodity markets, geopolitics, and many other
arcane and highly specialized fields in order to make
informed investment decisions that allow you to maintain
the wealth you already earned.
14
16. ● You effectively need to earn your money twice with fiat,
once when you work for it, and once when you invest it to
beat inflation. The simple gold coin saved you from all of
this before fiat. Why should a doctor, athlete, engineer,
entrepreneur, or accountant who is successful in their field
have to develop expertise in these many fields just to
maintain the wealth they already produced and earned
freely on the market?
15
17. ● Given the rate of monetary inflation financing wasteful
government spending and the high fees charged by the
investment management industry, only a small minority of
investors can reliably beat monetary inflation.
The vast majority must continue to work harder and earn
more to not lose wealth.
16
18. But fiaters often counter:
● Economic growth compensates for inflation. That is no
different from a thief stealing some of your cows and
telling you but that's not theft because the cows
reproduced and you still have more cows today. I have
more cows because I grew them.
17
19. ● As interest rates drop to negative territory, it is very difficult
to find investments that can beat inflation. Even lending to
highly incompetent governments now comes with a
negative nominal return, effectively expropriating investors
while also subjecting them to serious risks.
18
20. Fiat Debt
● The correct and successful financial strategy under the fiat standard
is to constantly take on as much debt as possible, be meticulous
about making all payments on time, and use the debt to buy hard
assets that generate future returns.
Doing this successively improves your credit score and allows you to
borrow at lower rates, while you store your wealth in goods that
cannot be inflated as easily as fiat. The fiat system thus taxes savers
and subsidizes borrowers.
The fiat standard encourages everyone to live fragile lives and take
substantial financial risks. The alternative is a slow, continuous
bleeding of wealth.
19
21. ● Businesses that are more reckless in taking on debt are more likely to
fail than those that do not, but they are also far more likely to grow
and drive competitors out.
● In the fiat standard, those who choose to hold positive balances are
robbed as the purchasing power of their fiat is eroded by all the debt
others are creating. Those who are in debt, on the other hand, get to
benefit from some of the seigniorage. Not taking on debt is reckless
financial irresponsibility. Irish economist Richard Cantillon described
the redistributive impact of inflation as benefiting the people who
receive the newly created money first at the expense of those who
receive it later. In the modern fiat standard, the beneficiaries of the
Cantillon effect are the borrowers, and savers are the victims.
Spending less than you earn and keeping savings on hand are simply
no longer optimal financial strategies; they are expensive luxuries
most cannot afford.
20
22. ● The path to financial success under the fiat standard lies
in acquiring hard assets. Financing these acquisitions with
debt is even more profitable. Not only is inflation likely to
devalue the loan for the asset more than it devalues the
asset, but as the lender and borrower are partaking in fiat
mining, there is enough benefit in the mining seigniorage
to make the purchase cheaper for the borrower. The most
profitable route, however, comes from being able to issue
fiat and get others into debt.
21
23. ● Under the fiat standard, every business model degenerates
into interest rate arbitrage. The purpose behind setting up
business is increasingly less about making money from
serving customers but establishing a creditor relationship with
them.
● The consequence of fiat balances being negative is that
everyone is constantly in debt. Your homeownership is
contingent on you fulfilling your financial obligations for
decades. Your future depends on you and many others
fulfilling financial obligations in a timely manner. Your future
uncertainty is higher than what it would be if you could place
your wealth in a hard money, and that causes a rise in time
preference. Everyone is less peaceful and more insecure.
22
24. ● The age-old wisdom of every grandmother has been
turned on its head. Instead of saving for the possibility of a
rainy day, fiat makes you borrow against all of your future
sunny days.
● The Narrow Bank shows us why the entire system relies on
depriving people of financial security
23