Times Of Economic Stress Research Articles

Hedge Funds and the Financial Market: Written Testimony Submitted to the United States House Committee on Oversight and Government Reform

This document is a revised version of the written testimony submitted to the U.S. House Committee on Oversight and Government Reform in connection to the hearing held on November 13, 2008 on Hedge Funds and the Financial Crisis. Based upon my research on the activities of hedge funds, there are three important findings I would like to share with the Committee. First, hedge funds did not cause the financial crisis and are in fact helping to mitigate its damage and save taxpayers money. This may seem surprising, but in fact hedge funds have historically made markets more stable and helped their investors conserve wealth in times of economic stress. Second, hedge funds' short-selling activities have helped draw attention to the poor management and investment decisions of financial companies in recent years. Indeed, when hedge funds short-sell the stocks of unhealthy companies, they help to divert capital from companies that are fundamentally unstable. This not only prevents stock market bubbles from becoming much worse, but it helps to ensure that companies that make sound decisions are rewarded and are able to provide stable jobs for their employees. Finally, existing laws and regulations should be strictly enforced against hedge funds and their managers, but changing how hedge funds are regulated could actually undermine the interests of investors and increase economic instability. If hedge funds are significantly restricted in their ability to develop innovative investment strategies, or are required to reveal their strategies to competitors, we all stand to lose from the unique benefits that the funds bring to the economy.

The Bundesbank's Communications Strategy and Policy Conflicts with the Federal Government

In this paper we provide an estimate of the likelihood of conflict between the federal government and the Bundesbank for the 1989–1998 period. We rely on a novel proxy for the impact of public communication by Bundesbank officials on the probability of conflict, in addition to interest rate, exchange rate, money supply behavior, as well as electoral influences. The empirical evidence is consistent with the view that speeches by the Bundesbank president dealing with inflation and economic policy are a positive source of conflict in a probabilistic sense. Conflict was not a constant but flared up at times of economic stress and could be exacerbated by the “talking” of Bundesbank officials.

The Bundesbank's Communications Strategy and Policy Conflicts with the Federal Government

In this paper we provide an estimate of the likelihood of conflict between the federal government and the Bundesbank for the 1989‐1998 period. We rely on a novel proxy for the impact of public communication by Bundesbank officials on the probability of conflict, in addition to interest rate, exchange rate, money supply behavior, as well as electoral influences. The empirical evidence is consistent with the view that speeches by the Bundesbank president dealing with inflation and economic policy are a positive source of conflict in a probabilistic sense. Conflict was not a constant but flared up at times of economic stress and could be exacerbated by the “talking” of Bundesbank officials.

Rent Control in the New Lochner Era

CONTENTS I. Introduction II. Recent Developments III. The Takings Clause A. Fifth Amendment 1. Background Principles 2. Fractional Property B. Possessory Takings 1. General Rule 2. Rent Control C. Regulatory Takings 1. Economic Impact 2. Substantially Advancing Prong D. Unconstitutional Conditions 1. Discretionary Benefits and Relinquished Rights 2. Exactions 3. Individual Adjudicative Discretionary Actions E. Temporary vs Permanent Takings 1. Doctrinal Origins 2. Regulatory Delay IV. Due Process Clause A. The Theory of 1. Modern Standard for Confiscation 2. Particular Problems in Confiscation B. Preference for Takings Analysis V. Conclusion I. INTRODUCTION Housing is one of the necessities of life. (1) It also comprises a large share of most Americans' disposable income. Unlike other consumables, competition in supply and demand does not result in effective market restrictions on price. First, there is a limited supply of housing. The limit is both natural (there is a finite amount of land) and artificial (zoning restrictions limit housing supply). Second, consumers of rental housing do not have the same market power as do consumers of other goods. This is principally because substituting one product or brand for another, say at lease renewal time, exacts a high transaction cost--the considerable expense and inconvenience of relocating. Since rental housing is not fungible, each landlord is a demi-monopolist. (2) This is not meant as a pejorative, only to describe the owner's market power. The absence of a free market in rental housing (at least in an idealized sense) often leads to exploitation by housing providers. This is especially true in times of economic stress, when the nation's resources are devoted to more pressing needs (e.g., wartime), or during periods of high inflation and real estate speculation. It is during these times that government policy makers often consider restrictions on rent increases and other forms of tenant protection. (3) Of course, there are other means to overcome market inefficiencies in housing. Tax and cash subsidies can encourage housing production or assist with rent payments. Zoning incentives can do likewise. But federal and state governments are not as concerned with housing as they once were; the issue is currently perceived as one of local concern. As a result, municipalities are left holding the bag, so to speak, with a dwindling arsenal of regulatory means available to them in addressing housing shortages. Rent control is one of those still-remaining means. Rent controls were first enacted in the United States during World War I. Since then, the Supreme Court has considered the constitutionality of rent control at least a dozen times, upholding the challenged law on every occasion save one. (4) It is somewhat remarkable that even during periods of extraordinary judicial protection of property rights, rent control laws have nonetheless survived. This was true in the Lochner era, (5) as well as during the modern resurgence of property rights activism, at least at the Supreme Court. Despite long-standing judicial acceptance of rent regulation, the attack on rent control has been unrelenting. For some reason, rent control triggers greater emotional and ideological opposition than do most other forms of economic regulation. Virtually every constitutional theory has been tried. Most challenges are based on the takings and due process clauses, but the contracts clause (6) and even the first (7) and thirteenth amendments (8) and equal protection (9) have made their way into the opinions. Creative statutory claims have also been mounted, such as the argument that rent control is an illegal form of price fixing. …

An empirical comparison of default risk forecasts from alternative credit rating philosophies

The New Basel Capital Accord will allow the determination of banks' regulatory capital requirements due to probabilities of default (PDs) which are estimated and forecasted from internal ratings. Broadly, two rating philosophies are distinguished: through the cycle versus point in time ratings. We employ a likelihood ratio backtesting of both types with respect to their probability of default forecasts and correlations derived from a nonlinear random effects panel model using data from Standard & Poor's. The implications for risk capital using these different philosophies are demonstrated. It is shown that Point in Time Ratings will exhibit much lower correlations and, thus, default probability forecasts should be more precise. As a consequence, Value-at-Risk quantiles of default distributions should be lower than those generated by Through the Cycle Ratings. Nevertheless, banks which use Point in Time Ratings may be punished in times of economic stress if the implied reduction of asset correlation is not taken into account.

THE RISE OF FUTURE FLOW ASSET SECURITIZATIONS

Since their debut in 1987, future flow asset securitizations (FFS) have found growing acceptance in markets worldwide. FFS are defined simply as the forward sale of hard currency receivables to be generated in the future through normal business operations by an exporter of goods or services. The most widely used receivables include export receivables for corporations, and credit card vouchers, electronic transfers, and paper‐based remittances for financial institutions. While companies in emerging markets have led the way in embracing FFS, the instrument's versatility has also made it valuable in industrialized countries where both companies and governments have begun to employ these structures for a variety of purposes.This article surveys the use of future flow asset securitizations in both emerging and highly developed markets, outlines its basic structure and applications, and evaluates the benefits of the structure to each party to the transaction. Among the most significant advantages in emerging markets is the financial discipline that countries and companies alike must practice in order to qualify for a future flow asset securitization. The authors present three cases where FFS have been employed successfully by companies in Brazil, Mexico, and Turkey.The risk management features of FFS make this instrument particularly valuable in times of economic stress. In fact, no investment‐grade FFS transactions have defaulted, despite volatile economic conditions in many countries where FFS have been issued. The authors predict that FFS will continue to find broad applications in a wide variety of markets.

Career Paths of Male Physical Therapist Students Entering a Female-Dominant Profession

Female-dominant professions, including physical therapy, are attractive to men for a variety of reasons. What is unknown, however, are some of the factors that enter into the career choices of male physical therapist students who enter a female-dominant profession. A qualitative study was undertaken that involved analysis of 20 interviews of male students. A theory, grounded in the data, was developed and is presented as a model for the development of the career paths of male physical therapist students. Gender stereotypes, reflected in the beliefs and knowledge of other health care professions and in attitudes about roles and responsibilities, influenced the initial physical therapy career choice as well as future career plans. Life experiences such as an orthopedic injury or interest in sports often led to the discovery of physical therapy as a career choice. However, most students did not know that physical therapy is a female-dominant profession when they first became interested in the profession. The model also provides insight into factors that affect students' future employment plans. Key Words: Career choice, Female-dominant profession, Gender, Physical therapy. INTRODUCTION Occupations may be segregated by gender if the particular attributes of the job are viewed as masculine or feminine and if the majority of workers are male or female.1 This gender segregation of professions may be a factor in the career choices made by both men and women. Although women are more likely to select a traditionally male-dominant career, men may be discouraged from selecting a female-dominant profession because of perceptions that the attributes of the job are feminine.2-5 Historically, physical therapy has been a profession consisting of a higher percentage of females than the percentage in the general population. The first physical therapy professional organization in the United States was called the American Women's Physical Therapy Association. Men did not begin to enter the profession in increasing numbers until after WW II.6 Today, men make up 30% of the membership of the American Physical Therapy Association.7 Previously, research has focused on the career development of women entering male-dominant professions.8-12 Kanter8,9 developed the classic theory of tokenism in which the minority women in dominant male groups are described as tokens. These tokens experience increased visibility, yet with isolation from male peers, they are subjected to increased performance pressure and react by underachieving. Kanter believed that if men were tokens in a female-dominant profession, they would experience similar pressure. However, in a study of male nurses, Heikes13 determined that the male token experience led to higher status in the profession. Snavely and Fairhurst14 found that male nurses did not respond to token pressure by under-achieving. Male nurses, teachers, librarians, and social workers actually felt pressure to move into more prestigious and higher-paying positions.15 Further research by Houser and Garvey16 showed that the support of significant others (especially men) was a powerful influence for a woman to enter a nontraditional field. Research into the male minority experience in a female-dominant profession and the reasons why men choose to enter such a profession indicates that these men may make career decisions or be influenced in their choice in a different way than men who enter a male-dominant field.13,15,17,18 Men enter gender-atypical careers in times of economic stress or upheaval, when jobs are not readily available in gender-typical fields, or when they perceive that opportunities for advancement are not available in gender-typical fields.19,20 For instance, men may more readily enter the female-dominant profession of nursing, if they perceive that jobs are readily available and that they will be able to rise quickly within the profession into various leadership positions. …

Single Mothers in Russia: Household Strategies for Coping with Poverty

During the 1990s, the proportion of female-headed households as well as their poverty risk has increased rapidly. Seven rounds of the Russian Longitudinal Monitoring Survey (RLMS) are used to investigate the role that household living arrangements play in single-mother family income dynamics and the major factors that affect the income status of mother-only families in Russia. Enhanced earning power of the single parent as well as a higher level of child benefits increases the likelihood that the single parent family lives separately from other relatives. Increasingly single mothers are choosing to co-reside with other relatives or adults in times of economic stress.

Social security and social networks among the urban poor in Pakistan

This paper is based on the urban case studies undertaken during a study of social safety nets and social networks and their role in poverty alleviation among low-income communities in Pakistan. A participatory assessment approach was adopted and findings reflect the perceptions of the urban poor themselves, disaggregated on the basis of age, gender and occupation. It was found that official safety net programmes fail to reach the poorest. Instead people rely on informal social networks of exchange and reciprocity during times of economic stress. However, the coping mechanisms of the poor do not always represent sustainable survival strategies. Some customary forms of obligations such as dowry, can constitute an obstacle to social development. Social networks are not always harmonious or undifferentiated, while some can be both oppressive and exploitative. It is argued, therefore, that to understand and build positively on the experience and life chances of the urban poor, the processes which undermine their ability to sustain or improve their circumstances and assure their long-term security must be addressed. It is suggested that the concept of social security provides the basis for a more flexible policy framework for responding to the particular characteristics of urban poverty than one which relies exclusively on the individual or collective coping strategies of the urban poor themselves, topped up with targeted social safety nets which often fail to hit the mark.

Farm Wives' Business and Household Decision Involvement in Times of Economic Stress

The purpose of the study was to examine the involvement of 263 farm wives in decision‐making discussions about periodic and continuous business decisions and household decisions during times of economic stress. The operating hypothesis that the perceptions of the decision maker would contribute to the explanation of variance in decision discussion involvement over and above the variance explained by the contextual factors was supported in three two‐step regression analyses. The satisfaction about the way money concerns are discussed was positively related to involvement in decision discussions for all three decision content areas. Perceptions concerning the tendency to set new goals increased the involvement in periodic and continuous farm decisions. Perceptions about the amount of respect received increased involvement in periodic farm and household decision discussions, and perceived income adequacy negatively influenced involvement in continuous farm decision discussions. The number of years farming influenced household decision discussions and off‐farm work influenced involvement in continuous farm decision discussions.

Modern Discipline: Its historical context in the colonial Chesapeake

This study examines the development of Western society’s modern way of life and demonstrates how consumerism and its behavioral correlates actively shaped and created behavior in an industrializing society. This essay reviews some of the ideas regarding the symbolic uses of material goods and describes the historical context in which goods related to a modern discipline appeared in 18th-century Annapolis, Maryland. During times of economic stress or within a competitive system, or when the existing social order is being threatened, goods and their meanings will create overt distinctions between groups and standardize behavior in order to reinforce and strengthen the social hierarchy.

Financing Agriculture in a Changing Environment: The Results of a Regional Research Effort

Agricultural finance research conducted during the 1985–90 period under research project NC-161, Financing Agricultural in a Changing Environment: Macro, Market, Policy and Management Issues, is summarized. This research advanced the knowledge base at the farm, institutional, and policy levels relative to the financing of agriculture during times of economic stress and rapid institutional change. Advances were particularly significant in the ares of loan policies for troubled borrowers, merger of financial institutions, resolution of high loss portfolios, credit scoring and evaluation, evaluation of state and federal credit programs, optimal investment strategies for farmers, and the value of fixed-rate loans to farm businesses.

Women without Men: Widows and Spinsters in Britain and France in the Eighteenth Century

In times of economic stress, the numbers of perpetually celibate and widows who would not remarry rose, and the women involved clearly had to fend for themselves in increasingly difficult circumstances. The traditional sectors of female work—domestic service, textile industry, and service trades—were poorly remunerated and women had to find some means of cutting costs by clustering together, living with relatives, or seeking work which provided accommodation. The various means of survival are explored together with suggestions for poten tial source material for examining further the daily lot of women alone. In addi tion, the particular contribution of single women, in terms of service and philan thropic effort, is pursued.

The importance of glycerol in the fatty acid industry

AbstractHistorically, glycerol, a valuable by product of the fatty acid insutry, is priced higher in the market‐place than any of the common fatty acids. Glycerol “credit” from fat‐splitting, frequently in time of economic stress, makes the difference between a profitable stearic acid operation and an economically unsound one. Theoretical yields of glycerol for the common fats and oils range from 9–13.5%; practical plant yields, corrected for FFA and upgrading yield losses, are 9–12.8% on 100% glycerol basis, or 10.3–14.8% on an 88% glycerol basis. Glycerol “credit” per pound of fatty acid ranges from 1 to 3 cents/pound. Upgrading “sweetwaters” from splitting operations in the fatty acid industry requires removal of dissolved salts, elimination of color, and fat and oil impurities, concentration (evaporation of water) and/or distillation. For Twitchellized sweetwaters this generally involves (a.) lime treatment. (b.) filtration, (c.) evaporation to half‐crude, (d.) precipitation of excess lime, (e.) filtration, (f.) evaporation to a concentration of 88–90%, and probably, (g.) distillation. For autoclave or continuous process sweetwaters the upgrading includes (a.) light lime treatment, (b.) filtration, (c.) evaporation concentration to 88–90%, and probably, (d.) distillation. Glycerol may also be upgraded by ion‐exchange processing followed by evaporation concentration in which distillation may be eliminated. Ion‐exclusion (Dow process) is also feasible. Many special triglyceride products are required of different fatty acid homolog distribution than those of the parent or hydrogenated fats and oils. These are prepared by splitting the fats or hydrogenated oils, fractionating the fatty acids, upgrading the glycerol, and recombining the desired fractionated acids with glycerol by reesterification. One example is high lauric triglyceride from coconut oil suited for use as a coco butter substitute.

Illegal Alien Surrogates: A Psychohistorical Interpretation of Group Stereotyping in Time of Economic Stress

Illegal Alien Surrogates: A Psychohistorical Interpretation of Group Stereotyping in Time of Economic Stress

Perspectives on MS Applications—All Around the Model

We live in a period of uncertainty, uncertainty concerning the economy, uncertainty concerning the ability of our businesses to function properly under the breadth of the problems experienced, uncertainty concerning our own organizational stability. The plain and simple fact is that at a time of economic uncertainty, at a time of potential recession, the watchword in the typical business firm is retrench. This means that the management science function along with all other staff functions is vulnerable to the cost cutters' knife. In times of economic stress when we face a challenge, if the company is hit hard and if management is desperately seeking ways to cut overhead, it is unfortunately true that staff departments invite attention. “But we develop systems and decisional techniques to enable management to do better,” one might say. But the plain and simple truth is that past contributions are often overlooked in the zeal to cut overhead today.

CONFLICT IN THE CO‐OPERATIVE RETAIL SOCIETY

SUMMARYThis paper considers the nature of organizational conflict in general and conflict in the co‐operative society in particular.It examines the unitary and pluralistic views of organizations and considers the suggestions that conflict is necessary for the independence of the individual, is constructive for the organization and is inevitable in any form of society. It investigates the proposed mechanisms for restraining conflict so that it is constructive.It is then argued that the co‐operative retail society is a pluralistic organization comprising a number of different interest groups with their own sets of values. These groups tend to be engaged in an evaluation of the other groups and this evaluation carries with it the framework for competition rather than co‐operation.It is contended that when economic conditions are favourable and there is a substantial surplus in the society the different groups can be satisfied and the inherent conflict remains submerged. The evaluation process is, in these conditions, latent, and internal competition is likely to be minimal. When economic conditions are unfavourable it is suggested that the divergent interests come to the surface. There is less dividend available for the members, the demands of managers and staff for higher wages and salaries may be difficult to meet, the members may be concerned about their capital and wish to draw it at a time when management want to retain it in the society. Within management the competition for scarce resources becomes sharper, and between management and staff there is increased tension as the former increase the pressure for greater efficiency. Economic values predominate and the holders of social values feel their position within the society to be threatened. To reassert themselves, they may stress the need for more effective democratic control. This emphasis on democratic control is a part of a wider feeling of anti‐professionalism. This may take a number of forms, all, of which are aimed to redress the balance between managers and laymen. The attempt to establish firmer democratic control and the broader issue of anti‐professionalism are both likely to intensify the conflict situation in a retail society at a time of economic stress.

A Survey of Health Status and Needs of Urban Mothers and Children

FEW persons would question that the large cities of our country and their inhabitants are in serious trouble. Riots occur intermittently, housing is substandard, and the environment, because of pollution, is frequently unhealthy. Public schools with large classes and insufficient individualized personal instruction are giving students substandard educations. Crime, juvenile delinquency, and drug abuse are increasing and health and hospital inpatient and outpatient services are often inadequate. Recreation services are relatively few (1). Concurrent with the aforementioned difficulties, there has been a considerable movement to the cities from rural areas of low-income people and families. This movement has placed an enormous burden on the cities' civic services, including health services, hospitals, and social agencies, because these people have great need for services but little or no ability to support them. Middle-class families who do support these services, however, have left the central cities for the suburbs. Many practicing physicians have also left, and although the needs of the inhabitants of our large cities have increased, they have fewer direct resources to meet them. Direct tax sources are increasingly inadequate to meet the cost of city health services, and a rise in unemployment has added a further strain to the economic and social structure. Inflation has decreased the purchasing power of the health dollar as it has that of other dollars. We felt it timely to survey the status and needs of mothers and children in large cities. Also, the survey would provide an opportunity to determine their health status and needs during a time of economic stress and changing concepts of the delivery of health services.

Non-padded plaster cast for lower extremity

T RACTION and suspension methods with such accessories as the Thomas sphnt have pIayed a predominant part in the development of the modern treatment of fractures. Their evoIutionary importance cannot be over-emphasized, though they have, however, certain deficiencies. The patient must be immobihzed to obtain immobilization of the broken bones and is neither ambulatory nor portabIe. Constant checking and readjustment of the apparatus is required, for even though good position may be obtained at first, subsequent dispIacement is not uncommon. HospitaIization which is a considerable factor in these times of economic stress is proIonged. Considerations such as these have Ied to the deveIopment of more efficient procedures, notabIy by BoehIer’ in Europe and by John CaIdweII,2 Roger Anderson3 and others” in this country. Traction-suspension methods may now be repIaced to a Iarge extent by more efhcient means of reduction foIIowed by fixation in plaster of Paris, which is the most satisfactory dressing for most fractures. Often fixed traction, or to use a better term, skeIeta1 fixation in pIaster, is advantageous. PIaster spIints or casts are made to fit the individua1 with accuracy impossibIe to attain by other means. They offer better control of position and are more comfortabIe than any meta or wooden spIint. The patient is comfortabIe, ambuIatory or at Ieast portable and fina anatomical and functiona resuIts are good. SkiIIfuI application of a suitabIe retention dressing is equally as important as a good reduction of the fracture. The technique of pIaster fixation has been negIected in recent Iiterature. Most authors writing on the newer methods of treatment treat the subject IightIy and chapters devoted to spIints and casts in the new textbooks are inadequate and outmoded. This is especiaIIy true of the use of non-padded pIaster. The monographs of Boehlerl and Schnek” are aImost the onIy exceptions. Lack of appreciation of the theoretica and practica1 considerations invoIved in the proper use of the pIaster dressing, in particuIar the non-padded variety, has contributed to the widespread faiIure to reaIize its advantages and possibiIities. Advantages of Non-padded Plaster Casts. The non-padded pIaster cast has numerous advantages over the conventiona padded casts, the most important is that fixation is incomparabIy more secure. Padding, no matter how skiIIfuIIy appIied, is subject to compression and thinning with an increase of the space between the skin and the cast, inevitabIy Ieading to Iooseness and motion within the cast. In some fractures this motion may cause nothing more disastrous than a spasm of pain each time the Iimb is moved unti1 the formation of caIIus stops the painfu1 grinding of the fracture surfaces. In others, especiaIIy those which are comminuted or which invoIve joints, motion of the atrophied, functionless Iimb in a Ioose padded cast may resuIt in shortening, deformity or disabIing maI-ahnement of the joint surfaces. This is particuIarIy true of fractures of the shaft of the femur, the condyIes making up the knee, the mortise of the ankIe and the astrogaIocaIcanea1 joint. Molded smoothly and evenIy over the bony prominences and soft parts, non-padded pIaster firmly holds fragments

Solon's Reform of Weights and Measures

The precise nature of Solon's σεισάχθεια has long been a matter of dispute. There can be no reasonable doubt that Solon abolished arrears of rent, and passed something analogous to an Evicted Tenants' Act. He certainly abolished debts for the nonpayment of which personal freedom had been forfeited, and for the future forbade loans of this type. This does not amount to a wholesale abolition of all debts, both public and private. It is equally certain that mere devaluation, while it would have affected all debts expressed in money, would not have been sufficiently drastic to meet the case of the evicted tenant and the enslaved artisan. Yet there is something to be said for the view that the reduction of the standard coin by some 30 per cent, was an integral part of the σεισάχθεια. The other measures affecting debt would no doubt restore those who had fallen under the load. But in all commercial communities, ancient and modern, in times of economic stress there are business men, industrialists and farmers, who are struggling along under burdens of debt, and who bravely continue the struggle. These are the persons whose activities constitute the mainspring of economic life in any profit-making economy. It is precisely this class whose economic circumstances would have been alleviated by the currency devaluation which Solon certainly enacted.