MoneyScience News

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• Blog Post: TheAlephBlog: Classic: Choosing an Insurance Company?
• Blog Post: TheFinancialServicesClub: The time is ripe for disruption in banking
• Published / Preprint: Alpha and Performance Measurement: The Effects of Investor Disagreement and Heterogeneity
• Published / Preprint: Corporate Taxes and Securitization
• Published / Preprint: Do Acquisitions Relieve Target Firmsâ Financial Constraints?
• Published / Preprint: Private Equity Performance: What Do We Know?
• Published / Preprint: Have Rating Agencies Become More Conservative? Implications for Capital Structure and Debt Pricing
• Published / Preprint: Stock Options as Lotteries

Blog Post: TheAlephBlog: Classic: Choosing an Insurance Company? Posted: 28 Mar 2014 08:48 PM PDT This was published in the “Ask Our Pros” column at RealMoney.  I don’t know when, and I don’t have the actual question, but looking at my answer, I think I know what was asked.read more... Visit MoneyScience for the Complete Article.

Blog Post: TheFinancialServicesClub: The time is ripe for disruption in banking Posted: 28 Mar 2014 02:31 PM PDT Building on yesterday’s debate about Google and co coming into banking, and the previous discussions of such:read more... Visit MoneyScience for the Complete Article.

Published / Preprint: Alpha and Performance Measurement: The Effects of Investor Disagreement and Heterogeneity Posted: 28 Mar 2014 04:13 AM PDT The literature has not established that a positive alpha, as traditionally measured, means that an investor would want to buy a fund. When alpha is defined using the client's utility function, a positive alpha generally means the client would want to buy. When markets are incomplete investors will disagree about the attractiveness of a fund. We provide bounds on the expected disagreement with a... Visit MoneyScience for the Complete Article.

Published / Preprint: Corporate Taxes and Securitization Posted: 28 Mar 2014 04:13 AM PDT Most banks pay corporate income taxes, but securitization vehicles do not. Our model shows that when a bank faces strong loan demand but limited deposit market power, this tax asymmetry creates an incentive to sell loans despite less-efficient screening and monitoring of sold loans. Moreover, loan-selling increases as a bank's corporate income tax rate and capital requirement rise. Our empirical... Visit MoneyScience for the Complete Article.

Published / Preprint: Do Acquisitions Relieve Target Firmsâ Financial Constraints? Posted: 28 Mar 2014 04:13 AM PDT Managers often claim that target firms are financially constrained prior to being acquired and that these constraints are eased following the acquisition. Using a large sample of European acquisitions, we document that the level of cash that target firms hold, the sensitivity of cash to cash flow, and the sensitivity of investment to cash flow all decline, while investment increases following the... Visit MoneyScience for the Complete Article.

Published / Preprint: Private Equity Performance: What Do We Know? Posted: 28 Mar 2014 04:13 AM PDT We study the performance of nearly 1,400 U.S. buyout and venture capital funds using a new data set from Burgiss. We find better buyout fund performance than previously documented â€" performance has consistently exceeded that of public markets. Outperformance versus the S&P 500 averages 20% to 27% over a fund's life and more than 3% annually. Venture capital funds outperformed public equities in... Visit MoneyScience for the Complete Article.

Published / Preprint: Have Rating Agencies Become More Conservative? Implications for Capital Structure and Debt Pricing Posted: 28 Mar 2014 04:13 AM PDT Rating agencies have become more conservative in assigning corporate credit ratings over the period 1985 to 2009; holding firm characteristics constant, average ratings have dropped by three notches. This change does not appear to be fully warranted because defaults have declined over this period. Firms affected more by conservatism issue less debt, have lower leverage, hold more cash, are less... Visit MoneyScience for the Complete Article.

Published / Preprint: Stock Options as Lotteries Posted: 28 Mar 2014 04:12 AM PDT We investigate the relationship between ex-ante total skewness and holding returns on individual equity options. Recent theoretical developments predict a negative relationship between total skewness and average returns, in contrast to the traditional view that only coskewness is priced. We find, consistent with recent theory, that total skewness exhibits a strong negative relationship with... Visit MoneyScience for the Complete Article.

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Women's Views on News

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• Call for inquiry into scale of domestic abuse
• Winifred Nicholson exhibition
• Men who still have no idea

Call for inquiry into scale of domestic abuse Posted: 28 Mar 2014 09:55 AM PDT Two women are killed by a violent partner or ex-partner every week in England and Wales. A toll unchanged in over a decade. In September 2013 the Home Secretary, Theresa May, commissioned Her Majesty's Inspectorate of Constabulary (HMIC) to undertake a national inspection of the police response to domestic violence. Over the last six months, HMIC has been visiting all police forces across the country to look at how they respond to victims of domestic violence. The national domestic violence charity Refuge agrees with HMIC's recommendation that there should be a further inspection of wider agencies that respond to victims of domestic violence (health, local authorities, the Crown Prosecution Service and probation). Refuge believes that this inspection should take the form of a public inquiry into the response of all state agencies to victims of domestic violence. Refuge supports 3,000 women and children on any given day, many of whom have experienced horrific brutality, and it is not the only domestic violence charity in the country. Sandra Horley CBE, chief executive of Refuge, said: "HMIC has come to a stark conclusion: the police response to domestic violence is "not good enough".  This should be a wake-up call to every police force across the country.  Domestic violence is an horrific crime that kills two women every week.  It is a national disgrace that decades after Refuge opened the world's first safe house for victims of domestic violence, the police are still not responding appropriately to women and children's cries for help. HMIC has found "unacceptable failings in core policing activities".  It has revealed deeply entrenched problems with police culture and attitudes towards victims, with many officers failing to take domestic violence seriously or even believe women when they report abuse.  HMIC has shown that officers are failing to collect evidence and arrest violent men.  Alarmingly, the report has also highlighted that weaknesses in the police response are putting women and children in danger. Many of the thousands of women and children Refuge supports describe their feelings of outrage, disappointment and shock at the treatment they have received by police.  We also work closely with families whose loved ones have been killed by their partners, in cases where the police – and other state agencies – have failed to protect them.  Losing a beloved sister, daughter or mother causes unspeakable grief.  Losing a loved one in circumstances where state authorities failed to protect them is appalling.  The families of Maria Stubbings, Rachael and Auden Slack, Sabina Akhtar, Katie Summers and Colette Lynch know this all too well. Two women are killed by a violent partner or ex-partner every week in England and Wales.  This death toll has not changed in over a decade.  In many cases, women have begged the police for help before they were killed.  And in too many cases the police – and other state agencies – have failed to protect them.  Refuge believes that there should be a mandatory arrest policy for domestic violence, as there is in Canada. We are encouraged by HMIC's rigorous inspection and far-reaching findings into police failure.  For decades, Refuge has been fighting to bring these failings to light.  We are delighted that HMIC has validated the experiences of the women and children we support. HMIC's inspection is a hugely important and positive first step – but it is only a first step.  As HMIC points out, we now need a much broader inspection of how all state agencies respond to domestic violence.  Refuge knows all too well that the roots to problems uncovered by HMIC are deeply embedded and widespread.  It is not only police officers who are failing women and children on a staggering scale.  The truth is that women and children experiencing domestic violence are often let down by a number of agencies, including the CPS, local authorities, social services, health and probation. That is why Refuge is calling on the Government to open a full public inquiry into the state response to victims of domestic violence.  A Stephen Lawrence style inquiry would uncover the truth.  It would help us to understand why the death toll taken by domestic violence continues to be so shockingly high.  It would help us to deliver meaningful change that will make Britain a safer place for women and children. The UK Government has a duty to respond appropriately to domestic violence in line with its international legal obligations.  Refuge has taken legal advice on this issue.  We have been advised that there is a legal imperative for the Government to take steps to address systemic deficiencies in the state response to victims of domestic violence, and that a public inquiry would enable the Government to fulfill that duty. Refuge wants to see lasting change.  Please join us in our call for a public inquiry by signing our petition."

Winifred Nicholson exhibition Posted: 28 Mar 2014 06:10 AM PDT At the forefront of the Modern British movement, she produced some of the memorable works of the period. In June a major exhibition will open at the Dulwich Picture Gallery which will include previously unexhibited or rarely seen early work by two of the UK's most important 20th century painters, Winifred and Ben Nicholson. It is part of a touring exhibition that ran in Leeds from October 2013 to January 2014, is currently at Kettle's Yard, in Cambridge, until 11 May and opens in Dulwich Picture Gallery on 4 June. Focusing on the couple's prolific output during their ten-year marriage – from 1920-1931 – it is the first show to consider their work in the context of a unique narrative of artistic influence and friendship with contemporaries Christopher Wood, Alfred Wallis and William Staite Murray. The Nicholsons were at the forefront of the Modern British movement and produced some of the most memorable works of the period. Their collaboration began even before they were married in Tippacott, Devon, where they drew side by side, and they continued to exchange ideas until the end of their lives. This exhibition is a rare opportunity to see parallel views of the same landscapes, seascapes, still-lifes and portraits as they often painted the same subject, Winifred as a colourist, Ben more interested in form. Winifred's King's Road, Chelsea, and Ben's 1924 (first abstract painting, Chelsea) were painted at the same time in Chelsea and highlight this difference in approach. Their paintings of Northrigg Hill, painted between 1928 and 1930 in Cumberland, will be displayed alongside Winifred's earlier painting of the same scene for the first time. Grouped by location, the show focuses on their time spent painting in London, Lugano, Switzerland, Cumberland and Cornwall and features work throughout by the artists they encountered and painted alongside. A chance meeting in 1928 with Alfred Wallis in St Ives enhanced their consideration of seascape, movement and proportion. Again the artists painted side by side, taking inspiration from Wallis's exquisite paintings made from pieces of old crates and boat paint. Works such as The Schooner the Beata, Penzance, Mount's Bay and Newlyn Harbour and Four Luggers and a Lighthouse provide a fascinating contrast to the group's oils and drawings. Winifred Nicholson was born Rosa Winifred Roberts in Oxford in 1893. She was the daughter of Charles Henry Roberts, a Liberal MP in Oxford, and Lady Cecilia Maude, and granddaughter of George Howard, 9th Earl of Carlisle, an amateur painter and friend of the Pre-Raphaelites, and they encouraged her to paint from an early age. She studied at the Byam Shaw School of Art, and married Ben Nicholson, son of the artists William Nicholson and Mabel Pryde in 1920 shortly after a visit to India and for the next fifteen years, formed a mutually influential partnership. Winifred is best known for painting flowers, which she used to convey her ideas about colour. She joined the ’7 & 5' Society – a group of seven painters and five sculptors created in 1919 and based in London – in 1925 and exhibited there for a decade. By the late 1920s she was widely respected in the London art world, with solo exhibitions at the Beaux Arts Gallery in 1927 and the Leicester Galleries. She was seriously injured when she fell through a trapdoor while hanging the exhibition at Beaux Arts, but made a full recovery for her first solo exhibition at the Leicester Galleries in 1930. After the break-up of her marriage in1930, she took their three children to Paris, where she experimented in abstraction and befriended and collected a number of Parisian artists, including Mondrian, Gabo and Hélion. On the eve of war, she returned to Britain, dividing her time between her home in Bankshead, in Cumbria, and her father’s house at Boothby. Along with the poet Kathleen Raine, Winifred visited the Hebrides and Western Scotland on a number of occasions during the early 1950s and she exhibited works from these trips at the Scottish Gallery in Edinburgh in 1953. She also visited the Scillies, Orkney and Catalonia in the 1950s and made numerous trips to Greece in the 1960s and 70s. In 1979 she was given a retrospective exhibition, organised by the Scottish Arts Council, which travelled from Glasgow to Edinburgh; Carlisle; Newcastle and Cornwall. She died in 1981.

Men who still have no idea Posted: 28 Mar 2014 03:05 AM PDT Questioning Lincoln’s Conservative MP Karl McCartney’s use of Twitter. Earlier this week a Conservative Lincolnshire County Councillor, Richard Davies, tweeted a picture of a row of women in their underwear. Along with an offensive remark. And in effect compared prospective parliamentary candidate Lucy Rigby and other female Labour candidates to ‘lingerie models’. Instead of condemning this clearly loutish sexism, the Conservative MP for Lincoln, Karl McCartney, seeing this Tweet, merely replied by joking that re-tweeting this comment about his opponent would get him into trouble – and that anyone who complained lacked a sense of humour. Davies later apologised for the picture, both on Twitter and on BBC Radio Lincolnshire, but McCartney stayed silent. Then he retweeted a post implying that people should be "grateful" for the sexist attack. All women shortlists are ‘sexist’ apparently – and this is the way to deal with them. And while McCartney has denied condoning Davies’ tweet, he did post about it during an exchange with ‘a member of the public’, stating: “those with sense of humour will appreciate” and that complainants needed to “get over themselves”. Same old. Shadow Minister for Women and Equalities, Gloria De Piero, has written to David Cameron, asking him for his opinion of McCartney's behaviour: ‘Dear Prime Minister, You will no doubt be aware of the conduct on social media of one of your Party's MPs, Karl McCartney, towards the Labour Party's Parliamentary candidate for Lincoln, Lucy Rigby. On Sunday, Richard Davies, a Conservative councillor, used Twitter to compare the selection of Lucy Rigby by an All-Woman Shortlist to a picture of a group of glamour models posing in their underwear. Faced with complaints, local MP Mr McCartney did nothing to distance himself from Cllr Davies' comments, but instead suggested that "those with sense of humour will appreciate" and that complainants needed to "get over themselves". I have to ask whether, as Leader of the Conservative Party, you believe there is any place in our politics, or indeed in our public life, for the attitude displayed by one of your MPs. I am proud of the leadership my Party has shown in the use of All-Women Shortlists to increase the number of women in Parliament. However, much more needs to be done to open up our politics and I would suggest that simply accepting the stance taken by  Richard Davies and Karl McCartney undermines those efforts. I note that Mr Davies has subsequently apologised for his comment, but have seen nothing to suggest that Mr McCartney has either apologised for or explained his own intervention. I look forward to your response on this matter. Gloria De Piero MP Shadow Minister for Women and Equalities.’ She is not the only one. We look forward to his response on this matter, too.

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MoneyScience News

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• Blog Post: TheAlephBlog: Classic: Know Your Debt Crises: This Too Shall Pass
• Published / Preprint: Contextual and Structural Representations of Market-mediated Economic Value. (arXiv:1403.7021v1 [q-fin.GN])
• Published / Preprint: Modelling Returns and Volatilities During Financial Crises: a Time Varying Coefficient Approach. (arXiv:1403.7179v1 [q-fin.GN])
• Published / Preprint: How Stable Are Corporate Capital Structures?
• Vendor News: Zain Self-Care Application, Co-Created by Infosys and Zain Bahrain, Witnesses Strong Adoption across Bahrain
• Blog Post: TheFinancialServicesClub: Data wars: why Google, Apple, Facebook and Amazon will eat the banker's lunch
• Published / Preprint: 27Mar/Amando M Tetangco Jr appointed Chair of the BIS Asian Consultative Council

Blog Post: TheAlephBlog: Classic: Know Your Debt Crises: This Too Shall Pass Posted: 27 Mar 2014 08:28 PM PDT The following was published at RealMoney on August 6th, 2007:read more... Visit MoneyScience for the Complete Article.

Published / Preprint: Contextual and Structural Representations of Market-mediated Economic Value. (arXiv:1403.7021v1 [q-fin.GN]) Posted: 27 Mar 2014 05:38 PM PDT How do we assign value to economic transactions? To answer this question, we must consider whether the value of objects is inherent, is a product of social interaction, or involves other mechanisms. Economic theory predicts that there is an optimal price for any market transaction, and can be observed during auctions or other bidding processes. However, there are also social, cultural, and... Visit MoneyScience for the Complete Article.

Published / Preprint: Modelling Returns and Volatilities During Financial Crises: a Time Varying Coefficient Approach. (arXiv:1403.7179v1 [q-fin.GN]) Posted: 27 Mar 2014 05:38 PM PDT We examine how the most prevalent stochastic properties of key financial time series have been affected during the recent financial crises. In particular we focus on changes associated with the remarkable economic events of the last two decades in the mean and volatility dynamics, including the underlying volatility persistence and volatility spillovers structure. Using daily data from several... Visit MoneyScience for the Complete Article.

Published / Preprint: How Stable Are Corporate Capital Structures? Posted: 27 Mar 2014 08:43 AM PDT Leverage cross sections more than a few years apart differ markedly, with similarities evaporating as the time between them lengthens. Many firms have high and low leverage at different times, but few keep debt-to-assets ratios consistently above 0.500. Capital structure stability is the exception, not the rule, occurs primarily at low leverage, and is virtually always temporary, with many firms... Visit MoneyScience for the Complete Article.

Vendor News: Zain Self-Care Application, Co-Created by Infosys and Zain Bahrain, Witnesses Strong Adoption across Bahrain Posted: 27 Mar 2014 08:43 AM PDT Infosys and Zain Bahrain, the most innovative telecommunications operator in Bahrain, have co-created Zain Self-Care, an application that is built using Infosys AssistEdge. Visit MoneyScience for the Complete Article.

Blog Post: TheFinancialServicesClub: Data wars: why Google, Apple, Facebook and Amazon will eat the banker's lunch Posted: 27 Mar 2014 08:39 AM PDT I chaired a meeting of bankers last night, and we talked a lot about data and data leverage.   One thing that bubbled up to the service over and over again was the threat of GAFA â€" Google, Apple, Facebook and Amazon (building upon last week's blog about same).read more... Visit MoneyScience for the Complete Article.

Published / Preprint: 27Mar/Amando M Tetangco Jr appointed Chair of the BIS Asian Consultative Council Posted: 27 Mar 2014 02:07 AM PDT BIS Press Release about A M Tetangco Jr being appointed Chairman of the BIS Asian Consultative Council (BIS Press Release, 27 March 2014) Visit MoneyScience for the Complete Article.

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