Finance
A Critique of Behavioral Finance
By Dr. Hassan Shirvani—The recent global financial crisis has raised serious questions about the rationality of the securities markets. In rational markets, prices tend to closely track their fundamental values, so that there is little or no chance of getting price bubbles. During the run-up to the recent crisis, however, many asset prices, including those in the housing sector, seemingly deviated from their correct values, resulting in subsequent financial crashes around…
Read MoreThe Next Big Yes! Changed My Way Of Thinking
By Jose Cervantes– My volunteer experience as an administrative assistant in the finance and accounting department at the San Jose Clinic in Houston, Texas offers me engagement in real world matters as well as real-world business experiences. When I started, I was unsure of what to expect in a real-world business environment. As months passed,…
Read MoreDoes the U.S. Government Debt Fit in a Bucket?
By Dr. Pierre Canac —Nobody will disagree that $12.8tn is a large and potentially scary number! That is the U.S. Gross Federal Debt held by the public at the end of 2014. However, if you divide this number by the U.S. Gross Domestic Product which is $17.7tn, we get about 73%. Is this a large…
Read MoreNegative Interest Rates: Unusual and a Difficult Phenomenon to Explain
With respect to interest rates, we live in a very interesting and indeed historical time. In some European countries, nominal interest rates are negative (while they are close to zero in the United States). A short while back this was thought to be impossible. Until it actually happened, it would have been difficult to imagine…
Read MoreInvestment Banking Principles: An Inside Look at Leveraged Investing and Risk Parity
By Austin J. Matt– Forethought Leveraged investing encompasses a tier of strategies utilized by investment banks for many years. It is the “black powder” used in portfolios managed by individual investors and institutions alike. Investment Banks’ “Black Powder” The world of investment banking is home to a plethora of strategies that all aim…
Read MoreInvestor Sentiment and Global Exchange Traded Funds
By Dr. Gulfem Bayram — The exchange traded funds (ETFs) are securities that track stock indexes, commodities, or baskets of assets, and they are traded on stock markets just like individual stocks. These unique securities have become increasingly popular in recent years as they offer greater diversity and flexibility for individual investors. Rapid Growth of…
Read MoreThe Economics of the Just Price
By Dr. Hassan Shirvani — The concept of the “just” or “fair” price is as old as History. To combat predatory lending practices, price gouging, profiteering, and price discrimination, many governments throughout history have passed laws to protect their citizens against dishonest and unethical lenders and sellers. Thus, the Babylonian king Hammurabi (1792-1750 B.C.) had…
Read MoreDid Government Housing Policy Cause the Financial Crisis?
The financial meltdown of 2008 impacted the global economy on an unimaginable scale. Many economists consider it the worst financial crisis since the Great Depression of the 1930s. It resulted in the threat of a total collapse of the global financial system, the bailout of many major banks by national governments, and downturns in stock markets around the world. In many areas,…
Read MoreBitcoin: Fails as a Solution to Double-Spending
A few years ago the world was introduced to Bitcoin; the brainchild of Satoshi Nakamoto; It is not the first crypto currency created, but certainly the most widely held. Bitcoin was built to address a very specific problem, Nakamoto coins it “double-spending.” E-commerce from the very beginning has relied on financial institutions to act…
Read MoreEconomic Outlook: Cyclical Recovery, Structural Challenges
The following are my reflections on the economy after attending the Cameron School of Business Advisory Board Lecture Series featuring John Silvia, Chief Economist, Wells Fargo: Recently, there has been talk about the recent recovery of the economy. Everyone is guessing: are we really out of the trough? Is it a steady growth? How does…
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