Showing posts from August, 2011

Bad Credit Loans and How to Improve Them

At the moment, money is a problem for everyone, no matter how much they have, and at the rate that the credit crunch is taking affect, it isn’t going to get any easier. Currently, a perfect credit score seems an impossible target to reach, and with no help coming from the economy, banks and lenders stay away from less than perfect credits scores like they are the plague.

You are probably now thinking, “Where does this leave the millions of people who need a loan or a mortgage who do not have this incredible credit score?” The way these people can get the cash they need is what is known as a bad credit loan. However, if you need even more money, then the following helping hands can improve your success rate of being accepted for a bad credit loan.

Watch your Purchases
This may seem like an obvious thing to do, but it is definitely worth while in the long run. There are always expenses that we forget about, but they all add up over a month. There are many tracking systems online, but mak…

OLIVIA PRICE: "Creating an outstandingly beautiful and unique image in the modeling world"

Question 1:  Where did you grow up? Olivia Price:  I grew up about 30 minutes outside of Los Angeles.
Question 2:  When did you know you wanted to be a model? Olivia Price:  I was a loner in high school, but around age 16 a friend took an interest in photography and borrowed me for a subject from time to time.  Getting back the photos was always exhilarating, and I have sought the spotlight since childhood.  I began incorporating my desire for fame and creative edge into photographs earlier this year, and I love it.
Question 3:  How do you stay fit? What are your beauty secrets? Olivia:  I got lucky when it comes to genetics! I'm naturally thin and have a high meta…

Brad Pitt: Love

Brad Pitt
Question: How do you know when you’re in love?
Brad Pitt: Do you know how you tell real love? It's when someone else's interest trumps your own. I like to put it that way: trumps your own.
(to put it that way=to say it that way) (to trump your own=to beat/defeat/over-power your own)
Talking about Love
Talking about love with friends.  Love is a topic when you have talked to someone 4 –5 times; maybe more.   Love is a strong emotion and people often listen closely and check to see if you feel the same or different from them.  People see love as a core value. 
Brad Pitt uses a rhetorical question to answer the original question. Also, he re-frames the original question in another form but the topic idea remains the same.  The form he uses has an authority style feeling to it.
Do you know how to tell (=notice) you’re in real love? = I will teach you.
This authority style speech gives him an aura of father, teacher, guru, expert, etc. However, it is common and doesn’t sound too …

What Is Behind the Critical Shortage of Prescription Drugs?

Today, the critical shortage of prescription drugs reached the editorial page of the New York Times. Under the heading The Shortage of Vital Drugs, the paper said:A widespread shortage of prescription drugs is hampering the treatment of patients who have cancer, severe infections and other serious illnesses.

The Food and Drug Administration says that some 180 medically important drugs have been in short supply, many of which are older, cheaper generic drugs administered by injection that have to be kept sterile from contamination.

A survey of 820 hospitals in June … found that almost all of them had experienced a shortage of at least one drug in the previous six months … As a result, more than 80 percent of the hospitals delayed needed treatments, almost 70 percent gave patients a less effective drug, and almost 80 percent rationed or restricted access to drugs.The cause of this shortage? According to the editorial:Nobody is sure just what is causing the shortages ... But several facto…

Jennifer Aniston: Beauty

Jennifer Aniston

Question 1:  What do you do with your hair?
Jennifer Aniston 1: With my hair, I just cut it and I condition it.                                     Just L'Oreal.
Question 2: What is your secret to looking so healthy?
Jennifer Aniston 2: I drink lots of water - water, water, water.                                    Water is important. And sleeping.

Speaking StyleCulturally, the topic of beauty often comes up in conversation.  Everybody wants to know what the other person is doing to stay SOOOOOO BEAUTIFUL!  When we see someone who looks great we often ask about his or her beauty routines.  We feel we might be missing something.  Deep down most people want to look handsome or beautiful.  People are always fighting against aging.
This type of conversation usually comes up once you have met or talked to a person two or three times.  However, if the person is exceptionally beautiful, you can probably…

Integrate and Enhance Your Business Links through B2B POS

Business-to-Business Sales (B2B Sales) refer to the concept of sale between businesses. A B2B sale involves a bigger picture than Business to Consumer (B2C) sale. In generating more prospective B2B POS, you can make use of the technique of covert hypnosis and NLP, Neurolinguistic Programming, since this type of sale also concerns a person-to-person interaction. Covert Hypnosis in simple terms refers to a process of putting a person in the state of walking trance without his or her realization.

This particular process in great ways can influence the buying decision of the consumer. To add to the effect, you can also use the concept of NLP. This concept believes in using certain words and phrases that can usher a huge effect on the thought process and behavior of an individual. To achieve best results, you need to build a strong relation with the consumer. Pacing is just another way of improving a strong relation with the consumer. This concept works in accordance with noticing the breat…

After Many Words, a Short Conclusion on Information-Insensitive Debt

Why six lengthy blog posts on information-insensitive debt? (By the way, they were published all at once because Blogger has been acting screwy lately, barring me from my account for more than a month. In case you want to refer back to them: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6.)

I strongly believe that the shadow banking system was never confronted and dealt with properly after the financial crisis, and that this was a tragic error.

I suspect that the shadow banks will be back, with fresh problems, in the not-too-distant future.

At that time, we may finally be forced to figure out what to do with them. I expect various approaches to be proposed.

To decide wisely how to deal with the shadow banking system, I think we have to possess the right theoretical framework for understanding it. In my opinion, policy based on a flawed theory of “information-insensitive debt" will lead us to create an even more dangerous financial system.

Information-Insensitive Debt and the Strange Case of Haircuts

Now for part 6 of my rather exhaustive (and exhausting) look at Gary Gorton's theory of information-insensitive debt.

This post is rather granular, to show inside-out how a very dubious assertion at the theory's center leads Gorton to what (I think) is a wrong-headed interpretation of what occurred during the height of the financial crisis.

We start with haircuts -- in the repo market, not at the local barber shop. Anyone who needs a refresher on how repurchase agreements work, go here.


Per Gorton, the haircut is the "percentage by which an asset's market value is reduced for the purpose of calculating the amount of overcollateralization of the repo agreement."

That's very gnarly sounding. Here's an unpack that gets at the gist of the matter.

When you "deposit" say $100 million in a shadow bank through a repurchase agreement, the bank essentially posts collateral (to guarantee your funds in case it defaults). The haircut can be th…

Down the Rabbit Hole on Information-Insensitive Debt: Inscrutable Complexity Is a Good Thing!

Part 5 of a detailed look at Gary Gorton's curious theory of information-insensitive debt in which we ask two key questions.


Not really, it seems.

A more useful theoretical construct would steer away from the bi-phase nature of "information insensitive" and "information sensitive" and would at least posit a sliding scale between the two. But an even better theory would ditch information sensitivity completely. Risk is the key to understanding how the world of debt works and how securities are analyzed, not information sensitivity (note: it’s probably no accident, in fact, that certain bloggers have equated Gorton's "information insensitivity" phrasing with the quality of being "risk free" -- but a careful reading of Gorton shows he makes no such equivalence, so he appears to be aware that there's a critical distinction).

A better th…

The Worrisome Analogy at the Heart of the Theory on Information-Insensitive Debt

Now for Part 4 on Gary Gorton's theory about information-insensitive debt, in which we begin by dusting off our SAT analogy skills.

Retail banking : deposit insurance :: Shadow banking : x

"X" is, of course, the kind of insurance that will save the day when there's another run on the shadow banks, as we saw during the financial crisis. Deposit insurance is a neat innovation that traces back to 1934; it eliminated runs on commercial banks in times of panic. It also made deposits at a bank "information-insensitive" debt -- the value of your $1,000 at Fidelity and Security Trust is secure, even if the CEO absconds to Tahiti with $10 million in a duffel bag.

Before solving for "x" -- or, better, asking whether we should even try to solve for "x" -- let's look at how shadow banking works.


Retail banking is for you, me, Aunt Edna. Shadow banking is for the giants in the financial system, who have large …

The Theory of Information-Insensitive Debt Prompts Some Head-Scratching Questions

Here's Part 3 on the magic pigs of high finance, information-insensitive debt (everyone still awake?). Last time we looked at the concept using a common-sense definition of the term. Now let's try to figure out where the theory is unsatisfying on a more granular level, by using Gorton’s own words.

First, to show us what qualifies as information-insensitive debt, he offers examples: high-grade corporate debt, government bonds (presumably U.S. Treasuries, and not Greek 10-year bonds), and AAA rated asset-backed securities.

In different places, he characterizes such debt as (the bold is mine):

[Debt that] "is very liquid because its value rarely changes and so it can be traded without fear that some people have secret information about the value of the debt. If speculators can learn information that is private (only they know it), then they can take advantage of the less informed in trade. This is not a problem if the value of the security is not sensitive to such information…

Information-Insensitive Debt: An Unnatural Concept, For Starters

Now for Part 2 on Gary Gorton’s theory of "information-insensitive debt" in which we continue to study the question, "Is it a bad thing or is it a really bad thing?" :)

One big problem: the concept happens to be quite unnatural.

Fiat currency is probably the best example of information-insensitive debt, but it's essentially a trivial, artificial case. Retail banking deposits also qualify as a good example, but they're something different: a special case. Exactly how they're special is important to understand.


Gorton likes to illustrate the information insensitivity of retail banking deposits by using an example involving a check. Let's say I write a check for a $14 haircut. That piece of paper isn't worth $13.89 or $14.05 to my barber. It's worth exactly $14.

Likewise, if I go directly to my bank instead to withdraw that $14, I can be sure of getting the full amount, even if my bank is Lehman Brot…