How does risk flow in the credit default swap market?

We develop a framework to analyse the credit default swap (CDS) market as a network of risk transfers among counterparties. From a theoretical perspective, we introduce the notion of flow-of-risk and provide sufficient conditions for a bow-tie network architecture to endogenously emerge as a result of intermediation. This architecture shows three distinct sets of counterparties: (i) Ultimate Risk Sellers (URS), (ii) Dealers (indirectly connected to each other), (iii) Ultimate Risk Buyers (URB). We show that the probability of widespread distress due to counterparty risk is higher in a bow-tie architecture than in more fragmented network structures. Empirically, we analyse a unique global dataset of bilateral CDS exposures on major sovereign and financial reference entities in 2011–2014. We find the presence of a bow-tie network architecture consistently across both reference entities and time, and that the flow-of-risk originates from a large number of URSs (e.g. hedge funds) and ends up in a few leading URBs, most of which are non-banks (in particular asset managers). Finally, the analysis of the CDS portfolio composition of the URBs shows a high level of concentration: in particular, the top URBs often show large exposures to potentially correlated reference entities

A framework for human microbiome research

A variety of microbial communities and their genes (the microbiome) exist throughout the human body, with fundamental roles in human health and disease. The National Institutes of Health (NIH)-funded Human Microbiome Project Consortium has established a population-scale framework to develop metagenomic protocols, resulting in a broad range of quality-controlled resources and data including standardized methods for creating, processing and interpreting distinct types of high-throughput metagenomic data available to the scientific community. Here we present resources from a population of 242 healthy adults sampled at 15 or 18 body sites up to three times, which have generated 5,177 microbial taxonomic profiles from 16S ribosomal RNA genes and over 3.5 terabases of metagenomic sequence so far. In parallel, approximately 800 reference strains isolated from the human body have been sequenced. Collectively, these data represent the largest resource describing the abundance and variety of the human microbiome, while providing a framework for current and future studies

Structure, function and diversity of the healthy human microbiome

Author Posting. © The Authors, 2012. This article is posted here by permission of Nature Publishing Group. The definitive version was published in Nature 486 (2012): 207-214, doi:10.1038/nature11234.Studies of the human microbiome have revealed that even healthy individuals differ remarkably in the microbes that occupy habitats such as the gut, skin and vagina. Much of this diversity remains unexplained, although diet, environment, host genetics and early microbial exposure have all been implicated. Accordingly, to characterize the ecology of human-associated microbial communities, the Human Microbiome Project has analysed the largest cohort and set of distinct, clinically relevant body habitats so far. We found the diversity and abundance of each habitat’s signature microbes to vary widely even among healthy subjects, with strong niche specialization both within and among individuals. The project encountered an estimated 81–99% of the genera, enzyme families and community configurations occupied by the healthy Western microbiome. Metagenomic carriage of metabolic pathways was stable among individuals despite variation in community structure, and ethnic/racial background proved to be one of the strongest associations of both pathways and microbes with clinical metadata. These results thus delineate the range of structural and functional configurations normal in the microbial communities of a healthy population, enabling future characterization of the epidemiology, ecology and translational applications of the human microbiome.This research was supported in part by National Institutes of Health grants U54HG004969 to B.W.B.; U54HG003273 to R.A.G.; U54HG004973 to R.A.G., S.K.H. and J.F.P.; U54HG003067 to E.S.Lander; U54AI084844 to K.E.N.; N01AI30071 to R.L.Strausberg; U54HG004968 to G.M.W.; U01HG004866 to O.R.W.; U54HG003079 to R.K.W.; R01HG005969 to C.H.; R01HG004872 to R.K.; R01HG004885 to M.P.; R01HG005975 to P.D.S.; R01HG004908 to Y.Y.; R01HG004900 to M.K.Cho and P. Sankar; R01HG005171 to D.E.H.; R01HG004853 to A.L.M.; R01HG004856 to R.R.; R01HG004877 to R.R.S. and R.F.; R01HG005172 to P. Spicer.; R01HG004857 to M.P.; R01HG004906 to T.M.S.; R21HG005811 to E.A.V.; M.J.B. was supported by UH2AR057506; G.A.B. was supported by UH2AI083263 and UH3AI083263 (G.A.B., C. N. Cornelissen, L. K. Eaves and J. F. Strauss); S.M.H. was supported by UH3DK083993 (V. B. Young, E. B. Chang, F. Meyer, T. M. S., M. L. Sogin, J. M. Tiedje); K.P.R. was supported by UH2DK083990 (J. V.); J.A.S. and H.H.K. were supported by UH2AR057504 and UH3AR057504 (J.A.S.); DP2OD001500 to K.M.A.; N01HG62088 to the Coriell Institute for Medical Research; U01DE016937 to F.E.D.; S.K.H. was supported by RC1DE0202098 and R01DE021574 (S.K.H. and H. Li); J.I. was supported by R21CA139193 (J.I. and D. S. Michaud); K.P.L. was supported by P30DE020751 (D. J. Smith); Army Research Office grant W911NF-11-1-0473 to C.H.; National Science Foundation grants NSF DBI-1053486 to C.H. and NSF IIS-0812111 to M.P.; The Office of Science of the US Department of Energy under Contract No. DE-AC02-05CH11231 for P.S. C.; LANL Laboratory-Directed Research and Development grant 20100034DR and the US Defense Threat Reduction Agency grants B104153I and B084531I to P.S.C.; Research Foundation - Flanders (FWO) grant to K.F. and J.Raes; R.K. is an HHMI Early Career Scientist; Gordon&BettyMoore Foundation funding and institutional funding fromthe J. David Gladstone Institutes to K.S.P.; A.M.S. was supported by fellowships provided by the Rackham Graduate School and the NIH Molecular Mechanisms in Microbial Pathogenesis Training Grant T32AI007528; a Crohn’s and Colitis Foundation of Canada Grant in Aid of Research to E.A.V.; 2010 IBM Faculty Award to K.C.W.; analysis of the HMPdata was performed using National Energy Research Scientific Computing resources, the BluBioU Computational Resource at Rice University

fisheries and tourism social economic and ecological trade offs in coral reef systems

Coastal communities are exerting increasingly more pressure on coral reef ecosystem services in the Anthropocene. Balancing trade-offs between local economic demands, preservation of traditional values, and maintenance of both biodiversity and ecosystem resilience is a challenge for reef managers and resource users. Consistently, growing reef tourism sectors offer more lucrative livelihoods than subsistence and artisanal fisheries at the cost of traditional heritage loss and ecological damage. Using a systematic review of coral reef fishery reconstructions since the 1940s, we show that declining trends in fisheries catch and fish stocks dominate coral reef fisheries globally, due in part to overfishing of schooling and spawning-aggregating fish stocks vulnerable to exploitation. Using a separate systematic review of coral reef tourism studies since 2013, we identify socio-ecological impacts and economic opportunities associated to the industry. Fisheries and tourism have the potential to threaten the ecological stability of coral reefs, resulting in phase shifts toward less productive coral-depleted ecosystem states. We consider whether four common management strategies (unmanaged commons, ecosystem-based management, co-management, and adaptive co-management) fulfil ecological conservation and socioeconomic goals, such as living wage, job security, and maintenance of cultural traditions. Strategies to enforce resource exclusion and withhold traditional resource rights risk social unrest; thus, the coexistence of fisheries and tourism industries is essential. The purpose of this chapter is to assist managers and scientists in their responsibility to devise implementable strategies that protect local community livelihoods and the coral reefs on which they rely