Financial Leverage Quotes

Hedge funds have made massive leveraged credit bets, knowing that their upside is billions in fees and their downside is millions in fees.

When other countries run sustained trade deficits, they must finance these by selling off domestic assets or running into debt — debt which they actually are obliged to pay. It seems that only the Americans are so bold as to say “Screw the world. We’re going to do whatever we want.” Other countries simply cannot afford the chaos from which the U.S. economy is positioned to withstand as a result of the fact that foreign trade plays a smaller role in its economy than in those of nearly all other nations in today’s interdependent world. Using debtor leverage to set the terms on which it will refrain from causing monetary chaos, America has turned seeming financial weakness into strength. U.S. Government debt has reached so large a magnitude that any attempt to replace it will entail an interregnum of financial chaos and political instability. American diplomats have learned that they are well positioned to come out on top in such grab-bags.

Leverage is a two-edged sword. The edge that can cut you, cuts deeper.

In this, there is a strong cautionary note as we look to the future: as IT continues its relentless progress, we can be certain that financial innovators, in the absence of regulations that constrain them, will find ways to leverage all those new capabilities—and, if history is any guide, it won’t necessarily be in ways that benefit society as a whole.

Leveraging is not evil but must be used with extreme caution and care. You must understand that over-leveraging is the prime reason for all market blowups.

If you are leveraged five times of your capital, a 20% move in your preferred direction can double your capital, but a similar move in the opposite direction can wipe you out.

If you have a leveraged position, make sure nobody can take it away.

The motivation for taking on debt is to buy assets or claims rising in price. Over the past half-century the aim of financial investment has been less to earn profits on tangible capital investment than to generate “capital” gains (most of which take the form of debt-leveraged land prices, not industrial capital). Annual price gains for property, stocks and bonds far outstrip the reported real estate rents, corporate profits and disposable personal income after paying for essential non-discretionary spending, headed by FIRE [Finance, Insurance, Real Estate]-sector charges.

mortgage The word literally means “dead pledge,” and if it were called that maybe more people would think twice about getting one. It is a classic example of a financial entity that would scare people off if they thought more clearly about what it is: a highly leveraged form of long-term borrowing with regular demands for cash payment against an illiquid asset that is known to be even more illiquid in difficult times.

Debt leveraging is a major reason why the United States and Britain have lost their industrial advantage. Debt-inflated costs for housing, education and other basic needs have priced their labor out of markets abroad and at home.

we can be certain that financial innovators, in the absence of regulations that constrain them, will find ways to leverage all those new capabilities—and, if history is any guide, it won’t necessarily be in ways that benefit society as a whole.

A period of tranquil growth thus leads to rising expectations, and a tendency to increase leverage: as Minsky put it in his most famous sentence, ‘Stability – or tranquility – in a world with a cyclical past and capitalist financial institutions is destabilizing’ (1978, p. 10).

(What the Secret Service didn't know was that Melania Trump was also using the delay for leverage and personal financial gain; she wanted to renegotiate her prenuptial agreement with Trump to sweeten the settlement she'd receive in a divorce and secure a future role for her son in Trump's company.)

finance was to become a public utility, situated in the public domain or at least alongside a public banking option. Instead, the past century’s expansion of predatory credit has been reinforced by de-taxing interest, land rent, financial speculation, debt leveraging and “capital” (asset-price) gains.

I believe when using leverage, the following four conditions must be met. 1. Leverage must be in the general direction of a secular trend. 2. Leverage should never expire. 3. Leveraged positions should not be subject to forced sell. 4. The maximum possible loss should not be more than the invested capital.

As you renew your mental dimension, you reinforce your personal management (Habit 3). As you plan, you force your mind to recognize high leverage Quadrant II activities, priority goals, and activities to maximize the use of your time and energy, and you organize and execute your activities around your priorities. As you become involved in continuing education, you increase your knowledge base and you increase your options. Your economic security does not lie in your job; it lies in your own power to produce—to think, to learn, to create, to adapt. That’s true financial independence. It’s not having wealth; it’s having the power to produce wealth. It’s intrinsic.

Operationally, a business can be improved in only three ways: (1) increase the level of sales; (2) reduce costs as a percent of sales; (3) reduce assets as a percentage of sales. The other factors, (4) increase leverage or (5) lower the tax rate, are the financial drivers of business value. These are the only ways a business can make itself more valuable. Buffett

Neofeudalism: Much as warlords seized land in the Norman Conquest and levied rent on subject populations (starting with the Domesday Book, the great land census of England and Wales ordered by William the Conqueror), so today’s financialized mode of warfare uses debt leverage and foreclosure to pry away land, natural resources and economic infrastructure. The commons are privatized by bondholders and bankers, gaining control of government and shifting taxes onto labor and small-scale industry. Household accounts, corporate balance sheets and public budgets are earmarked increasingly to pay real estate rent, monopoly rent, interest and financial fees, and to bear the taxes shifted off rentier wealth. The rentier oligarchy makes itself into a hereditary aristocracy lording it over the population at large from gated communities that are the modern counterpart to medieval castles with their moats and parapets.

at the height of the crash. “Each time someone at the table pressed for more leverage and more risk, the next few years proved them ‘right.’ These people were emboldened, they were promoted and they gained control of ever more capital. Meanwhile, anyone in power who hesitated, who argued for caution, was proved ‘wrong.’ The cautious types were increasingly intimidated, passed over for promotion. They lost their hold on capital. This happened every day in almost every financial institution, over and over, until we ended up with a very specific kind of person running

But derivatives did create new dangers. If you were making a loan, and you were confident you could hedge some of the credit risk of that loan, you might be tempted to make a larger and riskier loan. And the instruments themselves often had leverage embedded in them, so investors could be exposed to greater losses than they realized. Firms weren’t required by law to post any collateral (or “margin”) to make derivatives trades, and the market wasn’t requiring them to post much, either. This meant fewer shock absorbers for the system if those trades went bad. That’s why Warren Buffett had called derivatives “financial weapons of mass destruction.

Here are my simple rules for identifying market tops and bottoms: 1. Market tops are relatively easy to recognize. Buyers generally become overconfident and almost always believe “this time is different.” It’s usually not. 2. There’s always a surplus of relatively cheap debt capital to finance acquisitions and investments in a hot market. In some cases, lenders won’t even charge cash interest, and they often relax or suspend typical loan restrictions as well. Leverage levels escalate compared to historical averages, with borrowing sometimes reaching as high as ten times or more compared to equity. Buyers will start accepting overoptimistic accounting adjustments and financial forecasts to justify taking on high levels of debt. Unfortunately most of these forecasts tend not to materialize once the economy starts decelerating or declining. 3. Another indicator that a market is peaking is the number of people you know who start getting rich. The number of investors claiming outperformance grows with the market. Loose credit conditions and a rising tide can make it easy for individuals without any particular strategy or process to make money “accidentally.” But making money in strong markets can be short-lived. Smart investors perform well through a combination of self-discipline and sound risk assessment, even when market conditions reverse.

The Clinton administration’s Gramm–Leach–Bliley Act (GLBA) of 1999, also known as the Financial Services Modernization Act, is probably the most illustrious example of this deregulatory frenzy: this repealed the Glass–Steagall Act of 1933, which separated commercial and investment banking and is widely credited with giving the United States 50 crisis-free years of financial stability. With the passage of the Financial Services Modernization Act, commercial banks, investment banks, securities firms and insurance companies were once again allowed to consolidate. Today, many consider the repeal (followed in 2004 by the lifting of the leverage cap on US investment banks) to be an important cause of the late 2000s financial crisis.

I remain fundamentally optimistic about Wall Street as a marketplace and as a vehicle for wealth creation. Its future will rightly depend on several variables, chief among them being human choices; whether they be rationally, emotionally, subjectively or objectively made. Financial engineering taught us that if it could be quantified, it could be qualified. We learned about how to use leverage and have abused that knowledge for a myriad of reasons. We became practitioners of the transaction-based model, but forgot that long before the abacus there was trust and integrity, anchors of relationship-based models common with Middle East and Asian markets. It goes back to a handshake, the first and enduring example of mutual consensus.

The danger, of course, is that it is not always easy to distinguish between a default that was inevitable—in the sense that a country is so highly leveraged and so badly managed that it takes very little to force it into default—and one that was not—in the sense that a country is fundamentally sound but is having difficulties sustaining confidence because of a very temporary and easily solvable liquidity problem. In the heat of a crisis, it is all too tempting for would-be rescuers (today notably multilateral lenders such as the IMF) to persuade themselves that they are facing a confidence problem that can be solved with short-term bridge loans, when in fact they are confronting a much more deeply rooted crisis of solvency and willingness to pay

What is a “pyramid?” I grew up in real estate my entire life. My father built one of the largest real estate brokerage companies on the East Coast in the 1970s, before selling it to Merrill Lynch. When my brother and I graduated from college, we both joined him in building a new real estate company. I went into sales and into opening a few offices, while my older brother went into management of the company. In sales, I was able to create a six-figure income. I worked 60+ hours a week in such pursuit. My brother worked hard too, but not in the same fashion. He focused on opening offices and recruiting others to become agents to sell houses for him. My brother never listed and sold a single house in his career, yet he out-earned me 10-to-1. He made millions because he earned a cut of every commission from all the houses his 1,000+ agents sold. He worked smarter, while I worked harder. I guess he was at the top of the “pyramid.” Is this legal? Should he be allowed to earn more than any of the agents who worked so hard selling homes? I imagine everyone will agree that being a real estate broker is totally legal. Those who are smart, willing to take the financial risk of overhead, and up for the challenge of recruiting good agents, are the ones who get to live a life benefitting from leveraged Income. So how is Network Marketing any different? I submit to you that I found it to be a step better. One day, a friend shared with me how he was earning the same income I was, but that he was doing so from home without the overhead, employees, insurance, stress, and being subject to market conditions. He was doing so in a network marketing business. At first I refuted him by denouncements that he was in a pyramid scheme. He asked me to explain why. I shared that he was earning money off the backs of others he recruited into his downline, not from his own efforts. He replied, “Do you mean like your family earns money off the backs of the real estate agents in your company?” I froze, and anyone who knows me knows how quick-witted I normally am. Then he said, “Who is working smarter, you or your dad and brother?” Now I was mad. Not at him, but at myself. That was my light bulb moment. I had been closed-minded and it was costing me. That was the birth of my enlightenment, and I began to enter and study this network marketing profession. Let me explain why I found it to be a step better. My research led me to learn why this business model made so much sense for a company that wanted a cost-effective way to bring a product to market. Instead of spending millions in traditional media ad buys, which has a declining effectiveness, companies are opting to employ the network marketing model. In doing so, the company only incurs marketing cost if and when a sale is made. They get an army of word-of-mouth salespeople using the most effective way of influencing buying decisions, who only get paid for performance. No salaries, only commissions. But what is also employed is a high sense of motivation, wherein these salespeople can be building a business of their own and not just be salespeople. If they choose to recruit others and teach them how to sell the product or service, they can earn override income just like the broker in a real estate company does. So now they see life through a different lens, as a business owner waking up each day excited about the future they are building for themselves. They are not salespeople; they are business owners.

THREE BIG MISTAKES. But, of course, it’s never that simple. Before we even got to the third one, we were down and done. As much as our willingness to believe in the constant rise felled us, as much as our eagerness to conquer risk opened us up to more risk, as much as Greenspan stood by as Wall Street turned itself into Las Vegas, there was also Greece, and Iceland, and Nick Leeson, who took down Barings, and Brian Hunter, who tanked Amaranth, and Jérôme Kerviel and every other rogue trader who thought he—and it was always a he—could reverse his gut-churning, self-induced free fall with one swift, lucky strike; it was rising oil prices, global inflation, easy credit, the cowardice of Moody’s, the growing chasm of income inequality, the dot com boom and bust, the Fed’s rejection of regulation, the acceptance of “too big to fail,” the repeal of the Glass-Steagall Act, the feast of subprime debt; it was Clinton and Bush the second and senators vacationing with banking industry lobbyists, the Kobe earthquake, an infatuation with financial innovation, the forgettable Hank Paulson, the delicious hubris of ten, twenty, thirty times leverage, and, at the bottom of it, our own vicious, lingering self-doubt. Or was it our own willful, unbridled self-delusion? Doubt vs. delusion. The flip sides of our last lucky coin. We toss it in the fountain and pray.

Obama is also directing the U.S. government to invest billions of dollars in solar and wind energy. In addition, he is using bailout leverage to compel the Detroit auto companies to build small, “green” cars, even though no one in the government has investigated whether consumers are interested in buying small, “green” cars—the Obama administration just believes they should. All these measures, Obama recognizes, are expensive. The cap and trade legislation is estimated to impose an $850 billion burden on the private sector; together with other related measures, the environmental tab will exceed $1 trillion. This would undoubtedly impose a significant financial burden on an already-stressed economy. These measures are billed as necessary to combat global warming. Yet no one really knows if the globe is warming significantly or not, and no one really knows if human beings are the cause of the warming or not. For years people went along with Al Gore’s claim that “the earth has a fever,” a claim illustrated by misleading images of glaciers disappearing, oceans swelling, famines arising, and skies darkening. Apocalypse now! Now we know that the main body of data that provided the basis for these claims appears to have been faked. The Climategate scandal showed that scientists associated with the Intergovernmental Panel on Climate Change were quite willing to manipulate and even suppress data that did not conform to their ideological commitment to global warming.3 The fakers insist that even if you discount the fakery, the data still show.... But who’s in the mood to listen to them now? Independent scientists who have reviewed the facts say that average global temperatures have risen by around 1.3 degrees Fahrenheit in the past 100 years. Lots of things could have caused that. Besides, if you project further back, the record shows quite a bit of variation: periods of warming, followed by periods of cooling. There was a Medieval Warm Period around 1000 A.D., and a Little Ice Age that occurred several hundred years later. In the past century, the earth warmed slightly from 1900 to 1940, then cooled slightly until the late 1970s, and has resumed warming slightly since then. How about in the past decade or so? Well, if you count from 1998, the earth has cooled in the past dozen years. But the statistic is misleading, since 1998 was an especially hot year. If you count from 1999, the earth has warmed in the intervening period. This statistic is equally misleading, because 1999 was a cool year. This doesn’t mean that temperature change is in the eye of the beholder. It means, in the words of Roy Spencer, former senior scientist for climate studies at NASA, that “all this temperature variability on a wide range of time scales reveals that just about the only thing constant in climate is change.”4

fulfill our mission with the Rational ApproachTM, a comprehensive softwareengineering solution consisting of three elements: • A configurable set of processes and techniques for the development of software, based on iterative development, object modeling, and an architectural approach to software reuse. • An integrated family of application construction tools that automate the Rational Approach throughout the software lifecycle. • Technical consulting services delivered by our worldwide field organization of software engineers and technical sales professionals. Our customers include businesses in the Asia/Pacific region, Europe, and North America that are leaders in leveraging semiconductor, communications, and software technologies to achieve their business objectives. We serve customers in a diverse range of industries, such as telecommunications, banking and financial services, manufacturing, transportation, aerospace, and defense.They construct software applications for a wide range of platforms, from microprocessors embedded in telephone switching systems to enterprisewide information systems running on company-specific intranets. Rational Software Corporation is traded on the NASDAQ system under the symbol RATL.1

Our customers include businesses in the Asia/Pacific region, Europe, and North America that are leaders in leveraging semiconductor, communications, and software technologies to achieve their business objectives. We serve customers in a diverse range of industries, such as telecommunications, banking and financial services, manufacturing, transportation, aerospace

Realty investing is something you can assist to variety your profile more varied. Putting your cost savings into structures and land can provide you expanded your financial investments over even more sectors besides simply bonds and stocks. Continue reading to find out properly to buy investor. When choosing to purchase realty, make it expert by establishing an LLC. This will assist to shield both you personally and the financial investments that you make in the future. It can likewise provide you tax advantages thanks to your company negotiations. Constantly get a great feel of the neighborhood values resemble. Home loans and rental costs in communities that are regional will provide you a home is worth. Be particular you invest adequate time on business as well as discovering about exactly how it works. You need to budget plan your time invested on various other activities in order to make even more cash over the long run. Ditch the poker night or an additional guilty satisfaction so you have even more time to sharpen your investing abilities. Stick with niches you feel comfy handling. You will discover more success by adhering to a specific market sector. Whether you prepare to flip a residence, purchase or buy a rental home repossession, stay with exactly what you understand for success. Get to understand others in genuine estate market. It can be practical to have a couple of buddies who understand about investing in genuine estate. Troubles with lessees could take in a large amount of time. This presumption is harmful in the genuine estate market and any specific home. Your finest bet is to invest in things that supply a favorable money flow right away. Land near water or in the future. If you buy a home with the objective of leasing it out, be cautious of who you let lease it. If they can not get their cash together at this time, they aren't a trusted bet for you. When thinking about a big factor to consider for buying genuine estate, Area is critical. Consider the location you are deciding to purchase and the possible capacity. Make sure you are a great bookkeeper. You will conserve yourself a significant headache later on if you're excellent accounting now. You can find info about city planning information and various other details that could affect genuine estate values in the future. A growing city that's growing is an excellent financial investment. When attempting to get that next offer, never ever over-leverage yourself. You should keep money on reserve in case the unanticipated expenditures. Begin little with simply one home. Start with a single home and discover as you desire to make use of. Realty is a wonderful method to branch out. There are particular guidelines you need to comprehend. Use this short article when you begin to invest into genuine estate in order to end up being effective in it. Continue reading to discover the right means to invest in luxury condos miami financier. When choosing to invest in genuine estate, make it expert by setting up an LLC. Get to understand others in genuine estate market. It can be valuable to have a couple of pals who understand about investing in genuine estate. Use this post when you begin to invest into genuine estate in order to end up being effective in it.

The financial crisis of 2008 is illustrated by the following analogy. There is no doubt that the improvements in engineering have made the passenger car safer than it was 50 years ago. But that does not mean that the automobile is safe at any speed. A small bump on the road can flip the most advanced passenger car speeding 120 mph today just as surely as an older model traveling 80 mph. During the Great Moderation, risks were indeed lower, and financial firms rationally leveraged their balance sheets in response. But their leverage became too great, and all that was needed was an unexpected increase in the default rate on subprime mortgages—that “bump on the road”—to catapult the economy into a crisis.

Bear had survived the crash of 1929 without shedding a single employee, but ever since subprime mortgages sank its memorably named Enhanced Leverage Fund in the summer of 2007, markets had viewed it with suspicion bordering on disdain. It was the smallest and most leveraged of the five major investment banks, with $400 billion in assets and $33 in borrowing for every dollar of capital.

The pressure on life businesses and the capital fears prompted by the 2008 crisis have prompted the industry to build bigger capital cushions and cut costs. This has left insurers in a relatively good position. Investors have enjoyed decent dividends with payouts increasing by a cumulative 70% since 2009, according to FactSet. For shareholders, the risks to returns from life insurance have, so far, been balanced by earnings from nonlife insurance and asset management. Germany’s Allianz has U.S. bond house Pacific Investment Management Co. and nonlife insurance businesses, like property and casualty cover, around the world. Pimco has done well as interest rates declined and bond prices rose, but is expected to suffer once rates rise again—especially since founder Bill Gross walked out. France’s Axa similarly has global nonlife businesses and a large investment manager. However, these businesses ultimately will suffer from low investment returns. In nonlife, insurers can combat this with tougher underwriting standards. But demand for property-type insurance also suffers in a slower economy. Allianz has the lowest financial leverage of the big-three eurozone life insurers, and so has more flexibility to look for higher returns abroad. It also has a substantial general insurance business in the U.S., where rates should head higher sooner, and a higher expected dividend yield than France’s Axa or Italy’s Generali for this year and next.

making provision for an uncertain future has taken the very simple form of an investment (usually leveraged, that is debt-financed) in a house,

o n o f R a t i o n a l S o f t w a r e C o r p o r a t i o n i s t o e n s u r e t h e s u c c e s s o f c u s t o m e r s c o n s t r u c t i n g t h e s o f t w a r e s y s t e m s t h a t t h e y d e p e n d o n . We enable our customers to achieve their business objectives by turning software into a source of competitive advantage, speeding time-to-market, reducing the risk of failure, and improving software quality. We fulfill our mission with the Rational ApproachTM, a comprehensive softwareengineering solution consisting of three elements: • A configurable set of processes and techniques for the development of software, based on iterative development, object modeling, and an architectural approach to software reuse. • An integrated family of application construction tools that automate the Rational Approach throughout the software lifecycle. • Technical consulting services delivered by our worldwide field organization of software engineers and technical sales professionals. Our customers include businesses in the Asia/Pacific region, Europe, and North America that are leaders in leveraging semiconductor, communications, and software technologies to achieve their business objectives. We serve customers in a diverse range of industries, such as telecommunications, banking and financial services, manufacturing, transportation, aerospace, and defense.They construct software applications for a wide range of platforms, from microprocessors embedded in telephone switching systems to enterprisewide information systems running on company-specific intranets. Rational Software Corporation is traded on the NASDAQ system under the symbol RATL.1

THE NEXT day, the President and I announced a new small business lending initiative in the East Room. After I laid out the details in my usual colorless fashion, the President said he wanted to take a moment to discuss his outrage about the AIG bonuses. “I’ve asked Secretary Geithner to use [our] leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole,” he said. “I want everybody to be clear that Secretary Geithner has been on the case.” I read a draft of those remarks the morning of the event, and I wasn’t pleased. We didn’t think we could claw back the bonuses that had already been obligated, and even if we could modestly reduce future payouts, raising public expectations seemed unwise. I thought the President should stay as far away from the issue as possible. I didn’t see the need to remind everyone that I was “on the case,” either. But the country

Imagine a bank with $1 trillion in mortgage assets and $25 billion in capital, a 40:1 leverage ratio. To get it to a much safer 20:1 leverage ratio, the government could buy $500 billion of its assets, which would drain most of TARP on one institution. Or it could inject $25 billion in additional capital, achieving the same ratio with one-twentieth of the cash.

Congress that set and defended their low capital requirements, and Fannie and Freddie had a lot of friends in Congress. They ended up with $75 worth of leverage for every $1 in capital, the corporate equivalent of a $4,000 down payment on a $300,000 home.

the drift of risk from simple loans in traditional banks to structured products in leveraged nonbanks increased the danger of a “ ‘positive feedback’ dynamic,” a vicious cycle that could amplify a crisis. If asset prices fell, firms and investors would need money to meet margin calls, prompting fire sales that would drive asset prices even lower, and so on.

Even at the height of the boom in credit and leverage in mortgage-related markets, we tried to lean against the winds of confidence, to encourage major banks and nonbanks to prepare for the worst. We recognized there was a lot of dry tinder in the system, even if we were late to see how subprime losses could be the spark that ignited it.

But highly leveraged economies, particularly those in which continual rollover of short-term debt is sustained only by confidence in relatively illiquid underlying assets, seldom survive forever, particularly if leverage continues to grow unchecked

Imagine that you knew Greece was still Greece and Italy was still Italy and that the prices quoted in the markets represented the bond-buying activities of banks pushing down yields rather than an estimate of the risk of the bond itself. Why would you buy such securities if the yield did not reflect the risk? You might realize that if you bought enough of them—if you became really big—and those assets lost value, you would become a danger to your national banking system and would have to be bailed out by your sovereign. If you were not bailed out, given your exposures, cross-border linkages to other banks, and high leverage, you would pose a systemic risk to the whole European financial sector. As such, the more risk that you took onto your books, especially in the form of periphery sovereign debt, the more likely it was that your risk would be covered by the ECB, your national government, or both. This would be a moral hazard trade on a continental scale. The euro may have been a political project that provided the economic incentive for this kind of trade to take place. But it was private-sector actors who quite deliberately and voluntarily jumped at the opportunity.

As demand for cotton grew, slavery was considered indispensable as a means of maximizing profit for this labor-intensive staple crop. Equally important, as we shall see, slaves could be financed—that is, purchased on credit. In financial parlance this is called leverage. Planters had one objective: increased cotton production. Arguments about the optimum size of a cotton farm are irrelevant because of slavery’s financing characteristic. Simply put, the goal was more cotton, which called for financing the purchase of more land and more slaves. Because a mechanical means of solving cotton’s production needs did not exist until the mid-twentieth century, cotton demanded an endless supply of black bodies as long as the price of cotton permitted financing. The Northerner Frederick Law Olmsted, author of The Cotton Kingdom (1861), attributed slavery’s growth to cotton production that had

As demand for cotton grew, slavery was considered indispensable as a means of maximizing profit for this labor-intensive staple crop. Equally important, as we shall see, slaves could be financed—that is, purchased on credit. In financial parlance this is called leverage. Planters had one objective: increased cotton production. Arguments about the optimum size of a cotton farm are irrelevant because of slavery’s financing characteristic. Simply put, the goal was more cotton, which called for financing the purchase of more land and more slaves. Because a mechanical means of solving cotton’s production needs did not exist until the mid-twentieth century, cotton demanded an endless supply of black bodies as long as the price of cotton permitted financing. The Northerner Frederick Law Olmsted,

Risk of Financial Leverage This risk of loss increases exponentially when we add any form of financial leverage, i.e. borrowing money to invest.

Briger was a big gruff man, who was known for his bold bets on distressed debt—the troubled bonds and loans that everyone else was too afraid to touch, and that gave Briger and his firm arm-twisting leverage over large companies and occasionally small countries. He sometimes called himself a “financial garbage collector” and he looked the part.

you bought a single company, which applies excessive financial leverage, the risk of losses is very real, and you could lose your entire investment.

they sought, from their earliest days, to use their financial leverage over individual states to improve the legal and political position of the Jews living there.

How Much Money Can We Afford To Give To Charity? Knowing how much money you can safely give to charity is challenging for everyone. Who doesn’t want to give more to make the world a better place? On the other hand, no one wants to become a charity case as a result of giving too much to charity. On average, Americans who itemize their deductions donate about three or four percent of their income to charity. About 20% give more than 10% of their income to charity. Here are some tips to help you find the right level of donations for your family: You can probably give more than you think. Focus on one, two or maybe three causes rather than scattering money here and there. Volunteer your time toward your cause, too. The money you give shouldn’t be the money you’d save for college or retirement. You can organize your personal finances to empower you to give more. Eliminating debt will enable you to give much more. The interest you may be paying is eating into every good and noble thing you’d like to do. You can cut expenses significantly over time by driving your cars for a longer period of time; buying cars—the transaction itself—is expensive. Stay in your home longer. By staying in your home for a very long time, your mortgage payment will slowly shrink (in economic terms)with inflation, allowing you more flexibility over time to donate to charity. Make your donations a priority. If you only give what is left, you won’t be giving much. Make your donations first, then contribute to savings and, finally, spend what is left. Set a goal for contributing to charity, perhaps as a percentage of your income. Measure your financial progress in all areas, including giving to charity. Leverage your contributions by motivating others to give. Get the whole family involved in your cause. Let the kids donate their time and money, too. Get your extended family involved. Get the neighbors involved. You will have setbacks. Don’t be discouraged by setbacks. Think long term. Everything counts. One can of soup donated to a food bank may feed a hungry family. Little things add up. One can of soup every week for years will feed many hungry families. Don’t be ashamed to give a little. Everyone can do something. When you can’t give money, give time. Be patient. You are making a difference. Don’t give up on feeding hungry people because there will always be hungry people; the ones you feed will be glad you didn’t give up. Set your ego aside. You can do more when you’re not worried about who gets the credit. Giving money to charity is a deeply personal thing that brings joy both to the families who give and to the families who receive. Everyone has a chance to do both in life. There Are Opportunities To Volunteer Everywhere If you and your family would like to find ways to volunteer but aren’t sure where and how, the answer is just a Google search away. There may be no better family activity than serving others together. When you can’t volunteer as a team, remember you set an example for your children whenever you serve. Leverage your skills, talents and training to do the most good. Here are some ideas to get you started either as a family or individually: Teach seniors, the disabled, or children about your favorite family hobbies.

The company’s twenty thousand workers are the best paid in the industry, but the company has the lowest labor cost per ton of steel, leads the industry in return on capital, has the lowest financial leverage of any major steel company, and has paid 142 consecutive dividends. Retaining the right people sets up the company to do lots more with less.

It’s time for another aside: If you look at the last two tables—those showing big losses in 2008 and big gains in 2009—it’s easy to conclude that the two years together were something of a non-event. For example, if you put $100 into the Credit Suisse Leveraged Loan Index on the first day of 2008, you would have lost 29% over the course of the year and had only $71 left at the end. But then you would have gained 45% in 2009 and ended up with $103 at the conclusion of the two-year period, for a net gain of $3. The two-year results in the asset classes listed above ranged from moderate net losses to moderate net gains. It matters enormously, however, what you did in between. Yes, holding on would have enabled you to recoup most or all of your losses and end up well, with results as described above. But if you lost your nerve and sold at the trough—or if, having bought with borrowed money, you received a margin call you couldn’t meet and saw your positions sold out from under you—you experienced the decline but not the recovery, and your net result in this “non-event” two-year period was disastrous. For this reason, it’s important to note that exiting the market after a decline—and thus failing to participate in a cyclical rebound—is truly the cardinal sin in investing. Experiencing a mark-to-market loss in the downward phase of a cycle isn’t fatal in and of itself, as long as you hold through the beneficial upward part as well. It’s converting that downward fluctuation into a permanent loss by selling out at the bottom that’s really terrible. Thus understanding cycles and having the emotional and financial wherewithal needed to live through them are essential ingredients in investment success.

The Global Financial Crisis of 2007–08 represented the greatest financial downswing of my lifetime, and consequently it presents the best opportunity to observe, reflect and learn. The scene was set for its occurrence by a number of developments. Here’s a partial list: Government policies supported an expansion of home ownership—which by definition meant the inclusion of people who historically couldn’t afford to buy homes—at a time when home prices were soaring; The Fed pushed interest rates down, causing the demand for higher-yielding instruments such as structured/levered mortgage securities to increase; There was a rising trend among banks to make mortgage loans, package them and sell them onward (as opposed to retaining them); Decisions to lend, structure, assign credit ratings and invest were made on the basis of unquestioning extrapolation of low historic mortgage default rates; The above four points resulted in an increased eagerness to extend mortgage loans, with an accompanying decline in lending standards; Novel and untested mortgage backed securities were developed that promised high returns with low risk, something that has great appeal in non-skeptical times; Protective laws and regulations were relaxed, such as the Glass-Steagall Act (which prohibited the creation of financial conglomerates), the uptick rule (which prevented traders who had bet against stocks from forcing them down through non-stop short selling), and the rules that limited banks’ leverage, permitting it to nearly triple; Finally, the media ran articles stating that risk had been eliminated by the combination of: the adroit Fed, which could be counted on to inject stimulus whenever economic sluggishness developed, confidence that the excess liquidity flowing to China for its exports and to oil producers would never fail to be recycled back into our markets, buoying asset prices, and the new Wall Street innovations, which “sliced and diced” risk so finely, spread it so widely and placed it with those best suited to bear it.

If you want to help somebody, you won’t access this kind of leverage by making them wrong or pointing out that they’re inconsistent, but rather by asking them questions that cause them to realize for themselves their inconsistencies.

The fancy car and the house are symptoms of a deeper goal. I'm not here to reshape your morality or tell you what you should value, simply to ask "why?" Financial security and providing for your family are valid motivations behind your life choices. Or maybe you just love cars and houses. Whatever your reasons, however, understand that your decisions are rooted in deeper values, whether or not you are aware of them. The more clearly you understand those values, the more capable you will become of leveraging your efforts in an optimal way. My challenge to you is to dig deeper, and always to ask "why?

When playing a bear market, the same rules hold: You want to diversify your risks, especially knowing that collapses move even faster than rallies. You need to decide how much safe cash or near cash you want to hold to sleep at night and to handle financial emergencies, like the loss of your job or your house. Then decide how much to put into longer-term high-quality bonds, like those 30-year Treasuries and AAA corporates, but I think it’s still premature to make this move at the time of this writing, in August 2017. Then decide how much you want to put into a dollar bull fund or the ETF UUP, which tracks the U.S. dollar versus its six major trading partners. If you’re willing to risk part of your wealth, you can also bet on financial assets going down—from stocks to gold. Stocks are the one type of financial asset that goes down in either a deflationary crisis, like the 1930s, or an inflationary one, like the 1970s. So shorting stocks is the best way to prosper in the downturn, either way. But don’t leverage this bet. The markets are simply too volatile. You can short the stock market with no leverage by simply buying an ETF (exchange-traded fund) like the ProShares Short S&P 500 (NYSEArca: SH). It’s an inverse fund on the S&P 500, so if the index goes down 50 percent, you make 50 percent. The ProShares Ultrashort (NYSEArca: QID) is double short the NASDAQ 100, which is likely to get hit the worst. If you make this play, just do a half share, to avoid that two-times leverage (hold the other half in cash or short-term bonds). Direxion Daily Small Cap Bear 3X ETF (NYSEArca: TZA) is triple short the Russell 2000, which is also likely to lead on the way down. So buy only a one-third share of this one, to remain without leverage. (That means the money you allocate here should be one-third in TZA and two-thirds in cash, to offset the leverage.) And unlike the gold bugs, I see gold collapsing. It’s an inflation hedge, not a deflation hedge. If gold rallies back as high as $1,425—on my predicted bear-market rally—then it could easily drop to around $700 within a year. Your last decision is whether to risk some of your funds betting on gold’s downside, for the greatest potential returns. You can buy DB Gold Double Short ETN (NYSEArca: DZZ)—double short gold—at a half share, to offset the leverage, or just simply short GLD, the ETF that follows gold. There you have it. How to handle the coming crash.

Jack’s secret is not just to reward people for their profit contribution in the “great game of business.” It’s to put real numbers right in workers’ faces so they make better decisions every minute, every day, for every customer. I would go one step further, and maybe Jack already has. I would give employees a minor share in the overall company, but I would also then use software to measure each individual’s or team’s contributions after fair overhead allocations and direct costs. This would mean the back-line “servers” have fair revenue recognition of their efforts on behalf of the front-line “browsers” who actually serve the end customers. Is this not possible in a light-speed world of software and business metrics? We need more real business leaders and visionaries like Jack Stack, not BS Wall Street leverage artists or old-line corporate managers who merely streamline their top-down management systems while their workers wait for their unfunded retirement and death. And we need real educators, like Neil deGrasse Tyson, who can make science understandable to everyday people. Most of all, we need people to love what they do so much that they won’t even think of retiring at age 63 or 65 or even 75. They’re so productive and happy that they don’t worry about a retirement that doesn’t make sense to them anymore, though it’s there if they have health challenges. They’re too busy satisfying their customers and creating new businesses to contemplate life without that fulfillment. They’re so focused on what they do that they’re like the champion basketball player who’s totally “in state” and one with his process. They’re certainly not bored or waiting to retire and do nothing!

Facebook and a cartel of junior partners will leverage their platform power to establish a global financial surveillance system, on the back of public monetary systems. — Raúl Carrillo, Demand Progress

The typical real estate purchase was far more leveraged than the stocks purchased on margin in the run up to the 1929 crash. Putting 5 percent down on a house means the other 95 percent is borrowed.

Leverage was magnificently available,

Curbing the financial sector. Since so much of the increase in inequality is associated with the excesses of the financial sector, it is a natural place to begin a reform program. Dodd-Frank is a start, but only a start. Here are six further reforms that are urgent: (a) Curb excessive risk taking and the too-big-to-fail and too-interconnected-to-fail financial institutions; they’re a lethal combination that has led to the repeated bailouts that have marked the last thirty years. Restrictions on leverage and liquidity are key, for the banks somehow believe that they can create resources out of thin air by the magic of leverage. It can’t be done. What they create is risk and volatility.2 (b) Make banks more transparent, especially in their treatment of over-the-counter derivatives, which should be much more tightly restricted and should not be underwritten by government-insured financial institutions. Taxpayers should not be backing up these risky products, no matter whether we think of them as insurance, gambling instruments, or, as Warren Buffett put it, financial weapons of mass destruction.3 (c) Make the banks and credit card companies more competitive and ensure that they act competitively. We have the technology to create an efficient electronics payment mechanism for the twenty-first century, but we have a banking system that is determined to maintain a credit and debit card system that not only exploits consumers but imposes large fees on merchants for every transaction. (d) Make it more difficult for banks to engage in predatory lending and abusive credit card practices, including by putting stricter limits on usury (excessively high interest rates). (e) Curb the bonuses that encourage excessive risk taking and shortsighted behavior. (f) Close down the offshore banking centers (and their onshore counterparts) that have been so successful both at circumventing regulations and at promoting tax evasion and avoidance. There is no good reason that so much finance goes on in the Cayman Islands; there is nothing about it or its climate that makes it so conducive to banking. It exists for one reason only: circumvention. Many

The resulting financial overhead consists of claims on the economy’s actual means of production. Yet most people think of these bonds, bank loans and stocks and creditor claims as wealth, not its antithesis on the debit side of the balance sheet. This inside-out doublethink is a precondition for the bubble economy to be applauded by the mass media, keeping its corrosive momentum expanding. From the corporate sphere and real estate to personal budgets, the distinguishing feature over the past half-century has been the rise in debt/equity and debt/income ratios. Just as debt leveraging has hiked corporate break-even costs of doing business, so the cost of living has been increased as homes and office buildings have been bid up on mortgage credit. “Creating wealth” in a debt-financed way makes economies high-cost, exacerbated by the tax shift onto labor and consumers instead of capital gains and “free lunch” rent. These financial and fiscal policies have enabled financial managers to siphon off the industrial profits that were expected to fund capital formation to increase productivity and living standards. The

AlphaPoint Completes Blockchain Trial Together with Scotiabank AlphaPoint, a fintech company, devoted to blockchain technological innovation, has accomplished a successful proof technology together with Scotiabank, a major international bank based in Barcelone, Canada. From the trial, Scotiabank sought to learn and examine how the AlphaPoint Distributed Journal Platform could be leveraged inside across a selection of use situations. When questioned if AlphaPoint and Scotiabank intended to further build this job, Igor Telyatnikov, president and also COO regarding AlphaPoint, advised Bitcoin Journal that he was not able to comment especially on the subsequent steps in the particular Scotiabank-AlphaPoint effort. He performed, however, suggest that AlphaPoint is about to reveal several additional media shortly. “We have a couple of other significant announcements that is to be announced inside the coming calendar month, including a generation launch using a systemically crucial financial institution, ” said Telyatnikov. “2017 will be shaping around be an unbelievable year for that distributed journal technology market as a whole and then for AlphaPoint also. ” Within the multi-month venture, trade studies were published upon deployment of the AlphaPoint Distributed Journal Platform, which usually ran concurrently on Microsoft’s Azure impair and AlphaPoint hardware. Inside real-time, typically the blockchain community converted FIXML messages to be able to smart deals and produced an immutable “single truth” across the complete network. The particular Financial Details eXchange (FIX) is a sector protocol used for communicating stock options information inside specific digital messages. Including information about getting rates, market info and buy and sell orders. Using trillions involving dollars bought and sold annually around the Nasdaq only, financial providers entities are usually investing seriously in maximizing electronic buying and selling to increase their particular speed monetary markets and decrease costs. Blockchain technology may help them help save $8-12 million per annum, which includes savings up to 70 percent throughout reporting, 50 % in post-trade and 50 % in consent, according to a report by Accenture and McLagan.

The assets back of these notes were, it need hardly be said, minuscule and evanescent. Leverage once again.

Beginning in the 1980s, government, including presidents, Congress, and the Federal Reserve, gave us three decades of reduced regulation of the financial industry. Leverage, easy money, and “financial engineering” then brought a series of asset bubbles and threats to the stability of the financial system itself.

How can we prevent future financial crises driven by the systemic and scarcely regulated use of extreme leverage? One obvious step is to limit leverage by requiring sufficient collateral to be posted by both counterparties when they trade. That’s what is done on regulated futures exchanges, where contracts are also standardized. This model has worked well for decades, is easy to regulate, mostly by the exchanges themselves, and has had few problems.

The lessons we should have learned about excess leverage from the collapse of Long-Term Capital Management were ignored. Ten years later, history repeated on a worldwide scale when loose regulation and high leverage led to the near-collapse of the entire financial system in 2008. As part of the overall meltdown, hedge fund assets fell from $2 trillion to $1.4 trillion from losses and withdrawal of capital. Hedge funds were now a mature asset class. I predicted to The Wall Street Journal that any edge for investors would gradually disappear.

Yet Catchings would in just ten years very nearly destroy the firm, proving once again that articulate optimists encouraged by early successes and armed with financial leverage can become hugely destructive.

In an effort to help decode these buyer actions, researchers from consumer intelligence firm Motista found specific “emotional motivators” that provide a critical indicator of customers’ potential affinity to a company.2 In fact, these emotional motivators, a proxy for value, were more compelling than any other metric in terms of driving key buying sentiments such as brand awareness and customer satisfaction. While hundreds of emotional motivators were found to drive consumer behavior, the study found ten that drove significant levels of customer value across all of the categories studied. I am inspired by a desire to: Brands can leverage this motivator by helping customers: Stand out from the crowd Project a unique social identity; be seen as special Have confidence in the future Perceive the future as better than the past; have a positive mental picture of what’s to come Enjoy a sense of well-being Feel that life measures up to expectations and that balance has been achieved; seek a stress-free state without conflicts or threats Feel a sense of freedom Act independently, without obligations or restrictions Feel a sense of thrill Experience visceral, overwhelming pleasure and excitement; participate in exciting, fun events Feel a sense of belonging Have an affiliation with people they relate to or aspire to be like; feel part of a group Protect the environment Sustain the belief that the environment is sacred; take action to improve their surroundings Be the person I want to be Fulfill a desire for ongoing self-improvement; live up to their ideal self-image Feel secure Believe that what they have today will be there tomorrow; pursue goals and dreams without worry Succeed in life Feel that they lead meaningful lives; find worth that goes beyond financial or socioeconomic measures

The primary test of managerial economic performance is the achievement of a high earnings rate on equity capital employed (without undue leverage, accounting gimmickry, etc.) and not the achievement of consistent gains in earnings per share. In our view, many businesses would be better understood by their shareholder owners, as well as the general public, if managements and financial analysts modified the primary emphasis they place upon earnings per share, and upon yearly changes in that figure.

It was the smallest and most leveraged of the five major investment banks, with

I knew our financial system was heavily leveraged and vulnerable to a sudden shift in psychology.

Hedge funds were growing fast without any meaningful oversight or leverage limits.

While the case for long-term investment has tended to centre around simple mathematical advantages such as reduced (frictional) costs and fewer decisions leading (hopefully) to fewer mistakes, the real advantage to this approach, in our opinion, comes from asking more valuable questions. The short-term investor asks questions in the hope of gleaning clues to near-term outcomes: relating typically to operating margins, earnings per share and revenue trends over the next quarter, for example. Such information is relevant for the briefest period and only has value if it is correct, incremental, and overwhelms other pieces of information. Even when accurate, the value of the information is likely to be modest, say, a few percentage points in performance. In order to build a viable, economically important track record, the short-term investor may need to perform this trick many thousands of times in a career and/ or employ large amounts of financial leverage to exploit marginal opportunities. And let’s face it, the competition for such investment snippets is ferocious. This competition is fed by the investment banks. Wall Street relies heavily on promoting client myopia to earn its crust. Why

Meet Brian Hynes, a skilled Sr Process Manager based in Nashua, NH. He is a specialist in economics and finance, with a deep understanding of market dynamics and financial analysis. Brian's chosen career path in finance stems from his interest in leveraging economic principles to make informed investment decisions. His goal is to build a successful career in the finance industry, utilizing his expertise to optimize financial strategies and drive business growth.

With high leverage systems, increase your investment only proportionally to the square root of the capital growth.

The California State Teachers’ Retirement System (CalSTRS) provides one example of what leveraging public equities at a system level looks like in practice. It has determined that climate change is a systemic risk and developed a multiyear, multi-asset-class, internally managed Low-Carbon Index (LCI) for passive equity management. Launched in 2017 with a $2.5 billion commitment, the LCI is made up of stocks in all industries in all markets (US, developed, and emerging) around the world. CalSTRS’s goal is for these holdings to have reduced carbon emissions and reserves in each market by between 61 percent and 93 percent in the coming years.4 Since passive index funds hold hundreds, if not thousands, of stocks across all industries, the CalSTRS index will paint a picture of what the future should look like in all companies around the world, in effect setting a benchmark and model for the environmental performance of large corporations on climate change.

The independent feeling I get from owning our house outright far exceeds the known financial gain I’d get from leveraging our assets with a cheap mortgage. Eliminating the monthly payment feels better than maximizing the long-term value of our assets. It makes me feel independent.

To accumulate financial wealth, you need to attract and earn a large sum of money relative to the average person. Two things are absolutely required to do so: Control Leverage

When it comes to money, perhaps the most popular personal financial advice in the world is to “pay yourself first”—to take some of the money that comes in, and before anything else, put that money aside to invest. The premise is that the most powerful financial tool in the world is compound interest, but if you never have any money to invest, you’ll never get to take advantage of it. You have to take that money first; otherwise, it just gets consumed by other things. Time is similar. Developing yourself is the most powerful tool in the world. As with money, promising yourself you’ll set time aside later in the day to do what matters most just never seems to work—just as money will always find a new home, so will your time. By the last few dollars of your paycheck, it’s too late to save; by noon, it’s too late to do what’s most important with your time. Miracle Mornings are like paying yourself first—in wisdom, productivity, and clarity. When you leverage mornings, it’s like you’re skimming the cream off the top of the day and giving it to yourself so you can invest it for huge returns.

Chapter 7 has shown that banking was on its way to becoming a public utility in the years leading up to World War I. A public option survives in the Post Office banks of Japan and Russia. By providing deposit and checking accounts, loans and credit cards at rates reflecting the actual cost of such services (or even at subsidized rates instead of today’s interest charges, fees and penalties), a public option could free the economy from the monopoly rent now enjoyed by banks. Most important, public banking would have been unlikely to extend credit for the corporate takeovers, asset stripping and debt leveraging that characterizes today’s financial system.

Discover Sortis, your partner in financial growth. With our Sortis Income Fund, you can secure stable, high-yielding returns without the use of leverage. Explore real estate investments through Sortis REIT, offering cash flow, long-term appreciation, and a hedge against inflation, all in a tax-advantageous manner. Uncover the potential of Opportunity Zones with the Sortis Opportunity Zone Fund, and navigate distressed opportunities with the Sortis Rescue Fund. Stay informed with our latest news and insights on how we generate solid returns in diverse sectors.

I learned from this that even though I was right in my economic analysis I hadn’t properly evaluated the risk of too much leverage. For a few thousand dollars I learned from this to make proper risk management a major theme of my life for more than fifty years thereafter. In 2008 almost the entire world financial establishment didn’t understand this lesson and had overleveraged itself. I also learned from my losing silver investment that when the interests of the salesmen and promoters differ from those of the client, the client had better look out for himself. This is the well-known agency problem in economics, where the interest of the agents or managers don’t coincide with those of the principals, or owners. Shareholders of companies that have been pillaged by self-serving CEOs and boards of directors are painfully familiar with this.

Repo is the oil that lubricates the engine of the financial markets. It keeps it running smoothly; it’s the plumbing of the financial system. You might even say it’s the oil that lubricates the engine of the entire economy. Here are some important characteristics of the Repo market: In one respect, Repo is a popular instrument for short-term cash investments for institutional investors, with “short-term” meaning from overnight through one year. It’s an ultra-safe investment. It’s an investment collateralized with a Treasury security at a competitive market rate of interest. In another respect, Repo is a mechanism for market participants to cover short sales of U.S. Treasurys. This is a big part of the Repo market and arguably the most interesting part. In another respect, it provides collateralized funding for large leveraged investors. OK, let’s just get this said up front. Yes, the Repo market is the way hedge funds can highly leverage their trading positions. More on this later.

Back in those days, banks did not lend money to stock speculators. That business was left to the trust companies. Trust companies were not banks. In one way, they were the original non-bank financial institutions, the original shadow banks. They were officially financial institutions that were state chartered, and the state charter had much lighter regulatory requirements, including lower reserve requirements and the ability to write uncollateralized loans. Since banks did not write uncollateralized loans, the New York Stock Exchange brokers went to the trust companies. It was a good business for everyone. Brokers were able to get loans to leverage both their own trading positions and the positions of their clients.

It is estimated that the financial burden of mental illness worldwide will reach $16 trillion by 2030. The World Health Organization reports that over 300 million people suffer from depression alone, making it the leading cause of disability worldwide. That projection is not only disturbing but emphasizes the need to seek disruptive, innovative approaches to psychiatric disease. Mobilehealth can help fill these needs for at least two reasons: given the number of available mental health professionals, it is virtually impossible for all those in need of those services to be cared for face-to-face, a dilemma that is especially acute in low and middle-income countries. And there is also some evidence to suggest that many patients are more willing to open up about their psychological concerns online during an anonymous consultation. 

The big institutions are not so much worried about what a Lending Tree or a SoFi are doing to them. They’re worrying about Apple, Amazon, Facebook, and Google. They’re worrying about what happens if Apple, Amazon, Facebook, or Google really, really make significant headway into creating their own financial ecosystems that are leveraged off the back of their existing networks.” They have reason to worry. Big Tech is coming, and the bankers—at least the bankers who “know they’re screwed”—know it.

The telegraph allowed for the rapid transmission of ideas and information - but was quickly suborned by financiers, media moguls and the military, to leverage inequalities of information into inequalities of power and profits.

Let there be no doubt, that what we are witnessing is, indeed, history’s greatest financial bubble,” wrote an investor at the market’s peak in 1999. “The indescribable financial excesses, the massive increase in debt, the monstrous use of leverage upon leverage, the collapse in private savings, the incredulous current account deficits, and the ballooning central bank assets all describe the very severe financial imbalances which no amount of statistical revision nor hype from CNBC can erase.

China has become not only America’s main supplier, but America’s main banker, the largest holder of U.S. debt, with financial reserves topping $3.2 trillion, giving it enough financial leverage to wreak havoc with the American economy if it ever chose to sell off a large slice of its U.S. Treasury holdings. This is the opposite of what America’s business and political leaders promised. The

The cryptocurrency community never expected to ask whether TerraUSD (UST) or LUNA would hit $1 first. Recently in mid of May, the dramatic drop of a stablecoin named TerraUSD and Terra Luna rattled the entire crypto market, and other tokens such as bitcoin and tether also struggled. Terra Luna is currently almost useless. Some have also connected this crash to the financial meltdown of 2008. After all, it is the darkest moment in the crypto-verse since the bankruptcy crisis that forced the closure of the Mt. Gox exchange in 2014. But what actually happened? What impact will this have on the rest of the crypto ecosystem? What is Terra, and why does it have a sister currency named Luna? Here's everything you need to know. What are Terra LUNA and Terra USD(UST)? Mechanism of Terra Following this crash, there is uncertainty among cryptocurrency enthusiasts; many of them called it the Luna crash, and some called it the Terra crash. Even though it is a stablecoin, UST also crashed. Let’s clarify this- Terra is a blockchain network that focuses on producing stablecoins. Technically, Terra is the crypto asset, while LUNA is the sign for its native cryptocurrency. Terra’s ecosystem is composed of two different types of tokens: LUNA and a group of stablecoins. Stablecoins from the first generation, like Tether, keep their value by leveraging a variety of assets, including fiat reserves. However, some supporters of decentralization contend that having a single body in charge of a collection of physical assets creates a single point of failure. Risks such as opaque governance structures and the question of whether the reserves held to correspond to those declared are brought about by this, which focuses regulatory attention. Decentralized stablecoins attempt to overcome these governance problems by keeping their pegs through algorithms as opposed to huge currency and debt reserves. One such algorithmic product is TerraUSD (UST), created by Terraform Labs. UST is an algorithmic stablecoin in the ecosystem of Terra. Unlike fiat-backed stablecoins like USDC and BUSD, UST is not backed by physical assets. Instead, UST uses algorithms to keep its value pegged to $1 and is backed by a sister token called LUNA. When the price of UST increases too much, its algorithms create additional LUNA to reduce the price, or the opposite if the price decreases too much. LUNA is intended to act as a sort of price shock absorber for UST. Just like any other stablecoin, users must be able to exchange one UST (even if it is worth less than $1) for one LUNA for this mechanism to stabilize the price to function.

limiting highly leveraged borrowing.

What changed, starting in the late 1970s, was citizen leverage. Financial leverage, grassroots protest leverage, and the leverage of the vote were all systematically targeted for destruction. Income inequality widened to the point that it outpaced that of the Gilded Age, meaning that billionaires hoard more wealth and have more power than ever before.

Much of the borrowing to support this increase in leverage was done in the market for repurchase agreements, or repos, where banks sold securities to counterparties for cash and agreed to buy them back later at the same price, plus interest.

we had only one buyer and little time for due diligence, we had little negotiating leverage.

Given the complexity in strategy, governance and relationships involved in family business, one might marvel that a family ever emerges on the other side and wants to find a permanent way to continue together. But many families that have successfully accumulated significant wealth begin to search for a means to preserve it for present and future generations. One way to do so is to form a family office. Although definitions differ, a family office is generally organized to manage and leverage the family’s collective wealth, with an emphasis on stewardship rather than growth. Stewardship implies a long-term view and looks at inherited wealth as something to be treasured and preserved, in real terms, for future generations of family. A sense of stewardship is a powerful motivator, in the first place, not to destroy the financial and philosophical legacy of the founder and, second and ideally, to extend the reach of these resources into the modern day. We are going to talk extensively

Whether they win or lose their fight with the Euro institutions, Syriza have demonstrated the power of theory. Varoufakis predicted the catastrophic end of the Greek bonanza, the unsustainability of leveraged finance and the fragmentation of the eurozone – even while the theories acceptable to the Wall Street Journal and Financial Times said the opposite. He also told his advisers, from the very beginning, that they could expect a deal with Europe only at ‘one minute past midnight’. That is, he theorized the potential accidental outcomes of the crisis too. That’s what gives this book both its power and its poignancy. We don’t know how the fight between Syriza and the eurozone will end – but we can be certain it will involve compromise. Politicians live in the world of compromise; theorists do not. But by the end of it, the radical left will know what it means to fight for a new, fairer kind of capitalism, in the teeth of resistance from the old kind. Paul Mason, 28 March 2015

1. The conglomerate movement, “with all its fancy rhetoric about synergism and leverage.” 2. Accountants who played footsie with stock-promoting managements by certifying earnings that weren’t earnings at all. 3. “Modern” corporate treasurers who looked upon their company pension funds as new-found profit centers and pressured their investment advisers into speculating with them. 4. Investment advisers who massacred clients’ portfolios because they were trying to make good on the over-promises that they had made to attract the business. 5. The new breed of investment managers who bought and churned the worst collection of new issues and other junk in history, and the underwriters who made fortunes bringing them out. 6. Elements of the financial press which promoted into new investment geniuses a group of neophytes who didn’t even have the first requisite for managing other people’s money—namely, a sense of responsibility. 7. The securities salesmen who peddle the items with the best stories—or the biggest markups—even though such issues were totally unsuited to the customers’ needs. 8. The sanctimonious partners of major investment houses who wrung their hands over all these shameless happenings while they deployed an army of untrained salesmen to forage among even less trained investors. 9. Mutual fund managers who tried to become millionaires overnight by using every gimmick imaginable to manufacture their own paper performance. 10. Portfolio managers who collected bonanza incentives of the “heads I win, tails you lose” kind, which made them fortunes in the bull market but turned the portfolios they managed into disasters in the bear market. 11. Security analysts who forgot about their professional ethics to become storytellers and let their institutions be taken in by a whole parade of confidence men. This was the “list of horrors that people in our field did to set the stage for the greatest blood bath in forty years,

If you believe that you must work hard in order to deserve the money that comes to you, then money cannot come to you unless you do work hard. Financial success, or any other kind of success, does not require hard work. It does require alignment of thought. You simply cannot offer negative thought about things that you desire and then make up for it with action or hard work. When you learn to direct your own thoughts, you will discover the true leverage of Energy alignment.

Geoff Wade, pointed out that China is ‘openly utilising its financial clout globally to facilitate expanded strategic leverage. Chinese capital is, without doubt, being employed as a strategic tool.’19 British, American and Japanese investors do not hail from one-party states that habitually use overseas trade and investment to pressure and coerce other countries into policy positions sympathetic to their strategic interests. For them the guiding principle is not ‘economic ties serve political goals’. Nor do they bring modes of operating that are secretive, deceptive and frequently corrupt, and whose important decisions are often made by political cadres embedded in companies and answerable to a totalitarian party at home. Only when the Chinese state no longer operates in these ways should we treat Chinese investment like any other.

With traders scrambling to pay back debts, Neal Soss, an economist at Credit Suisse First Boston, explained to the Journal, "You don't sell what you should. You sell what you can." By leveraging one security, investors had potentially given up control of all of their others. This verity is well worth remembering: the securities may be unrelated, but the same investors owned them, implicitly linking them in times of stress. And when armies of financial soldiers were involved in the same securities, borders shrank. The very concept of safety through diversification - the basis of Long-Term's own security - would merit rethinking.