moneyscience.org : Islamic mortgage market to expand

From Moneyscience.org
moneyscience.org : Islamic mortgage market to expand

"The Islamic mortgage market is set to grow by 47% a year and could be worth £1.4bn by 2009, market research group Datamonitor has said. There is a growing demand from the UK's 1.8 million Muslims for mortgages that comply with Sharia law. The law forbids interest payments;"

While Islamic banking is growing rapidly in

Financial history/trivia from the 1700s

I had so much fun with the 1600s, I decided to go on to the 1700s. Enjoy! Some more financial history/trivia. This is from the 1700s. I think it is worthwhile to note how some things really do not chnage that much. Indeed that is a major reason why I love history so much. In 1703 England and Portugal reach an agreement to jointly lower tariffs in order to increase trade. (Methuen Treaty)

SSRN-Firm Size, Debt Capacity, and Corporate Financing Choices by Senay Agca, Abon Mozumdar

Firm Size, Debt Capacity, and Corporate Financing Choices by Senay Agca, Abon Mozumdar:Yet another paper on the pecking order! This one is by Agca and Mozumdar. You will definitely want to read it!There is a large debate in the financial world as to whether Myers' and Majluf's pecking order holds. Their famous hypothesis states that firms want to use internally generated funds first, and then

Free Money Finance: Carnival of Personal Finance #6

While I often try not to make this too much of a personal finance page, I think this one deserves mention. It is Free Money Finance's "Carnival of Personal Finance." Many good tips and ideas! Free Money Finance: Carnival of Personal Finance #6

Some Financial history/trivia from the 1600s

Some Finance trivia for you. All from the 1600s. How profitable was the spice trade? VERY! If (and this is a big if) the ships made it back safely. In 1618 it was estimated that 3000 tons of spices were bought in what is now India and the surrounding area. The spices cost about £91,000. By the time they reached the eastern Mediterranean they were worth almost £800,000! So it is easy to

Volume and returns

Do investors trade more when stocks have performed well? John M. Griffin, Federico Nardari, and René M. Stulz report that investors do trade more following strong market performance.From their paper:Their key finding:"There is on average a positive relation between past returns and turnover in our sample of countries. Using a trivariate Vector Autogression (VAR) of market return, market

The NFL Draft and Market Efficiency

NFL and Finance by Massey & Thaler Massey and Thaler use football (the NFL) to demonstrate that markets may not be "rational."From their abstract:"Using archival data on draft-day trades, player performance and compensation, we compare the market value of draft picks with the historical value of drafted players. We find that top draft picks are overvalued in a manner that is inconsistent with

The Value of Financial Flexibility by Andrea Gamba, Alexander Triantis

SSRN-The Value of Financial Flexibility by Andrea Gamba, Alexander Triantis:Gamba and Triantis look at the relationship between financial flexibility and Investment flexibility. Not surprisingly, they find the two are related."We find that firms with greater investment flexibility derive less value from financial flexibility, indicating that these two dimensions of flexibility are substitutes to

SSRN-Long Horizon Mean Reversion for the Brussels Stock Exchange: Evidence for the 19th Century by Jan Annaert, Wim Van Hyfte

If people look at the same data over and over again, it should not be surprising that eventually people find things. Moreover, if different people look at the same data set, they are likely to find the same things. For this reason, it is always nice when there is an out of sample data set that can be used to verify the initial findings. Annaert and Van Hyfte provide us this opportunity.SSRN-Long

Who's Afraid of China Inc.? - New York Times

With all of the discussion of late about China and the Flat (or Not so flat) World, it is worthy to note that not all are looking forward to a "one world," Particularly, many are afraid of China.

This issue has come to a head of late with the attempted takeover of Chevron.

It is into this environment where NY Times runs their article on US-China business relations. I had to laugh at the

Radio Economics

If you have not been introduced yet to podcasting (I would describe it as audio blogging), check our RadioEconomics.

Dr. James Reese of the University of South Carolina Upstate has started a cool site that plays interviews of various economists (and soon financeprofessors ;) as well.

Radio Economics

You can listen on your IPOD or on any computer.

Recent interviews include Skip Saur,

Speaking of Freakonomics

FYI: From Freakonomics On July 26 at noon EDT, Levitt and Dubner will conduct a one-hour Microsoft online "live meeting," open to anyone.

Moodgrapher: The World according to LiveJournal

Moodgrapher: The World according to LiveJournalFreakonomics is absolutely right on this one! A veritable plethora of paper ideas come out. I wonder if past data is publicly available.Just a few ideas: Can we explain the weekend effect by looking at mood swings? Do people actually buy stock more when happy? Do credit spreads change as a result of mood swings? Can we time when we should sell a

Corporate Governance Mechanisms and Corporate Cash Holdings by Yuanto Kusnadi

Kusnadi gives us a look at cash holdings and corporate governance from Singapore.SSRN-Corporate Governance Mechanisms and Corporate Cash Holdings by Yuanto Kusnadi:Long time readers of my newsletter and/or blog know that my dissertation at Penn State was on High Cash firms. Consequentially, I still am interested in virtually any article on the behavior of firms with high cash.In fact, I will take

Aha...surprise helps learning

Cool article...at first glance, there appears to be little (if any) finance content, but given that many of you are teachers, I think you might be interested.Short version: The surprise "or aha" moment that comes about from something unexpected, improves recall of the material. So in class, if we can "create scenarios", find surprises, and not spoon feed the students too much, it may increase

Implied Volatility wins out again!

Ok, so it is sort of cheating to post work on which I am a co-author, but given I just spent the entire afternoon on the phone, I am short on time, so this will have to suffice.SSRN-Forecasting Power of Implied Volatility: Evidence from Individual Equities by Jonathan Godbey, James Mahar:1) implied volatility is a better forecaster of realized volatility than either historic volatility or GARCH

BBC NEWS | Business | Warning signs for the funding of terror

The BBC documents some of the difficulties facing investigators who try to track terrorist funding. The short version is that there are MANY ways that are used to fund terrorists and many of the ways are not not easily traceable.

BBC NEWS | Business | Warning signs for the funding of terror: "Investigating the money trail of attacks such as the London bombings or 9/11 can be a frustratingly

China Says It Will No Longer Peg Its Currency to the U.S. Dollar - New York Times

China Says It Will No Longer Peg Its Currency to the U.S. Dollar - New York Times: "China said Thursday it will no longer peg its currency to the U.S. dollar but instead let it float in a tight band against a basket of foreign currencies"From the BBC:"In effect, this strengthens the yuan by 2.1%, to 8.11 to the dollar. More importantly, this is seen as the first step in a complete

SSRN-Sources of Hedge Fund Returns: Alphas, Betas, and Costs by Roger Ibbotson, Peng Chen

SSRN-Sources of Hedge Fund Returns: Alphas, Betas, and Costs by Roger Ibbotson, Peng ChenWith the growth of hedge funds in recent years, it is good that Ibbotson and Chen investigate whether these funds actually do as well as they often claim. And the answer? They do well, but not as well as claimed.Some of the more serious problems in studying hedge funds are data related. Specifically,

Social Norms versus Standards of Accounting by Shyam Sunder

I have not had many accounting articles of late. It has not been intentional (and definitely is not a commentary on their importance), but I just do not find as many that are strictly relevant to finance. However, that changed today as I was sent the following:SSRN-Social Norms versus Standards of Accounting by Shyam SunderA few highlights from the paper:*"Historically, norms of accounting

Commanding Heights: Home | on PBS

Commanding Heights: Home | on PBS

If you are teaching an International Finance Class, this one is a must. It it updated PBS show on globalization. I am not teaching International Finance this semester, but I might buy it anyway!

How Does Investor Short-termism Affect Mutual Fund Manager Short-termism by Li Jin

SSRN-How Does Investor Short-termism Affect Mutual Fund Manager Short-termism by Li Jin: "How Does Investor Short-termism Affect Mutual Fund Manager Short-termism"Do stock prices reflect all future cash flows or is the market myopic and looks too much at recent performance and near term cash flows? This is an enormously important question. Jin tries to answer it in the context of mutual fund

SSRN-Football and Stock Returns by Alex Edmans, Diego Garcia, Oyvind Norli

First of all, I have to play ugly American and remind readers they are really talking about soccer and not real football ;) (I am kidding!!!)SSRN-Football and Stock Returns by Alex Edmans, Diego Garcia, Oyvind NorliShort Version:"This paper investigates the stock market reaction to the outcome of international football competitions, such as the FIFA World Cup, a variable shown in psychological

The World is Flat (or at least flatter)

I do not know where to put this one. It is definitely economics and business, but I am not sure how to tie it to finance per se, so I will put it on my RandomTopics2 blog, but make a note of it and provide a link to it here. It is a discussion of the book The World is Flat by Thomas Friedman.Whether or not you agree with everything in it, it is well worth your time to read (or risten) to the

St. Bonaventure University: SBU prof's site named one of top 10 finance blogs in the country

LOL...the SBU news got a hold of the blog story....probably a tad too flattering, but I do like the synergy section! I think that really is the key: doing the blog is both doing research and preparing for class! St. Bonaventure University: SBU prof's site named one of top 10 finance blogs in the country

NPR : Home Owners Increasingly Betting on Interest-Only Loans

Only time will tell whether these interest only loans are more evidence of a real estate bubble, impatient buyers, or just a good example of financial innovation, but regardless, the link is interesting.

The short version is that Interest-Only loans are becoming increasingly popular. Moreover, they are not just popular for those who can not afford to pay the principle. There are of course

Call for papers

Received this today. I have never been to this conference so I can not say much about it, but it is in Las Vegas in December. So it can not be all that bad!Call for papers The 2005 Financial Research Association Meeting December 17 and 18, 2005 Aladdin Resort and Casino Las Vegas, Nevada The program committee of the Financial Research Association seeks finance papers of general

Supply and Demand Shifts in the Shorting Market by Lauren Cohen, Karl Diether, Christopher Malloy

Yet another interesting paper from the EFA Moscow Meetings!SSRN-Supply and Demand Shifts in the Shorting Market by Lauren Cohen, Karl Diether, Christopher MalloyUsing a "proprietary database of lending activity from a large institutional investor" the authors examine Whether shorting impacts future returns? If shorting is important, is it "short supply" or "short demand"? Is shorting

Information Acquisition and Portfolio Under-Diversification by Stijn Van Nieuwerburgh, Laura Veldkamp

SSRN-Information Acquisition and Portfolio Under-Diversification by Stijn Van Nieuwerburgh, Laura VeldkampVan Nieuwerburgh and Veldkamp (V&V) help us to understand the importance of information costs (as learning capacity) on portfolio decisions. They model the portfolio (diversification) aspect along with the learning (information) costs necessary to hold a diversified portfolio.The authors

The Impact of Clientele Changes: Evidence from Stock Splits by Ravi Dhar, William Goetzmann, Ning Zhu

SSRN-The Impact of Clientele Changes: Evidence from Stock Splits by Ravi Dhar, William Goetzmann, Ning Zhu (btw Shane Sheperd is also listed on the actual paper, but not on this link, not sure why, but Shane, I am not purposely not giving you credit!!!)Ever since the first event study (Fama, French, Jensen, and Roll 1969), people have puzzled at stock splits. Why should splitting a stock matter?