Systemic Risk and Hedge Funds

Systemic risk is commonly used to describe the possibility of a series of correlated defaults among financial institutions---typically banks---that occur over a short period of time, often caused by a single major event. However, since the collapse of Long Term Capital Management in 1998, it has become clear that hedge funds are also involved in systemic risk exposures. The hedge-fund industry has a symbiotic relationship with the banking sector, and many banks now operate proprietary trading units that are organized much like hedge funds. As a result, the risk exposures of the hedge-fund industry may have a material impact on the banking sector, resulting in new sources of systemic risks. In this paper, we attempt to quantify the potential impact of hedge funds on systemic risk by developing a number of new risk measures for hedge funds and applying them to individual and aggregate hedge-fund returns data. These measures include: illiquidity risk exposure, nonlinear factor models for hedge-fund and banking-sector indexes, logistic regression analysis of hedge-fund liquidation probabilities, and aggregate measures of volatility and distress based on regime-switching models. Our preliminary findings suggest that the hedge-fund industry may be heading into a challenging period of lower expected returns, and that systemic risk is currently on the rise.

Hydrothermal dolomitization of basinal deposits controlled by a synsedimentary fault system in Triassic extensional setting, Hungary

Dolomitization of relatively thick carbonate successions occurs via an effective fluid circulation mechanism, since the replacement process requires a large amount of Mg-rich fluid interacting with the CaCO3 precursor. In the western end of the Neotethys, fault-controlled extensional basins developed during the Late Triassic spreading stage. In the Buda Hills and Danube-East blocks, distinct parts of silica and organic matter-rich slope and basinal deposits are dolomitized. Petrographic, geochemical, and fluid inclusion data distinguished two dolomite types: (1) finely to medium crystalline and (2) medium to coarsely crystalline. They commonly co-occur and show a gradual transition. Both exhibit breccia fabric under microscope. Dolomite texture reveals that the breccia fabric is not inherited from the precursor carbonates but was formed during the dolomitization process and under the influence of repeated seismic shocks. Dolomitization within the slope and basinal succession as well as within the breccia zones of the underlying basement block is interpreted as being related to fluid originated from the detachment zone and channelled along synsedimentary normal faults. The proposed conceptual model of dolomitization suggests that pervasive dolomitization occurred not only within and near the fault zones. Permeable beds have channelled the fluid towards the basin centre where the fluid was capable of partial dolomitization. The fluid inclusion data, compared with vitrinite reflectance and maturation data of organic matter, suggest that the ascending fluid was likely hydrothermal which cooled down via mixing with marine-derived pore fluid. Thermal gradient is considered as a potential driving force for fluid flow

The fraction of early-type galaxies in low redshift groups and clusters of galaxies

We examine the fraction of early-type (and spiral) galaxies found in groups and clusters of galaxies as a function of dark matter halo mass. We use morphological classifications from the Galaxy Zoo project matched to halo masses from both the C4 cluster catalogue and the Yang et al (2007) group catalogue. We find that the fraction of early-type (or spiral) galaxies remains constant (changing by less than 10%) over three orders of magnitude in halo mass (13<log MH/Msol/h<15.8). This result is insensitive to our choice of halo mass measure, from velocity dispersions or summed optical luminosity. Furthermore, we consider the morphology-halo mass relations in bins of galaxy stellar mass M*, and find that while the trend of constant fraction remains unchanged, the early-type fraction amongst the most massive galaxies (11<log M*/Msol/h <12) is a factor of three greater than lower mass galaxies (10<logM*/Msol/h<10.7). We compare our observational results with those of simulations presented in De Lucia et al (2011), as well as previous observational analyses, and semi-analytic bulge (or disc) dominated galaxies from the Millennium Simulation. We find the simulations recover similar trends as observed, but may over-predict the abundances of the most massive bulge dominated (early-type) galaxies. Our results suggest that most morphological transformation is happening on the group scale before groups merge into massive clusters. However, we show that within each halo a morphology-density relation remains: it is summing the total fraction to a self-similar scaled radius which results in a flat morphology-halo mass relationship.Comment: 9 page, 5 figures, modified to match accepted version (MNRAS

Generation and physiological roles of linear ubiquitin chains

Ubiquitination now ranks with phosphorylation as one of the best-studied post-translational modifications of proteins with broad regulatory roles across all of biology. Ubiquitination usually involves the addition of ubiquitin chains to target protein molecules, and these may be of eight different types, seven of which involve the linkage of one of the seven internal lysine (K) residues in one ubiquitin molecule to the carboxy-terminal diglycine of the next. In the eighth, the so-called linear ubiquitin chains, the linkage is between the amino-terminal amino group of methionine on a ubiquitin that is conjugated with a target protein and the carboxy-terminal carboxy group of the incoming ubiquitin. Physiological roles are well established for K48-linked chains, which are essential for signaling proteasomal degradation of proteins, and for K63-linked chains, which play a part in recruitment of DNA repair enzymes, cell signaling and endocytosis. We focus here on linear ubiquitin chains, how they are assembled, and how three different avenues of research have indicated physiological roles for linear ubiquitination in innate and adaptive immunity and suppression of inflammation

Two-photon phosphorescence lifetime imaging of cells and tissues using a long-lived cyclometallated (NpyridylCphenylNpyridyl)-C-boolean AND-N-boolean AND Pt(II) complex

Using a combination of multiphoton excitation, confocal scanning, TCSPC and beam blanking in conjunction with a cyclometallated Npyridyl^Cphenyl^Npyridyl Pt(II) complex (1) with a long luminescence lifetime, we demonstrate lifetime mapping of living cells and histological tissue sections over a time-frame of 50 microseconds, using a laser on/off “beam blanking” approach. This method of performing phosphorescence lifetime imaging microscopy (PLIM) represents an order of magnitude enhancement of the two-photon time-resolved emission imaging microscopy (TP-TREM) method, where in order to achieve a longer imaging window, the excitation laser repetition rate was reduced by cavity dumping [Chem. Sci., 2014, 5, 879]. The method complements and expands other existing imaging methodologies by enabling simultaneous PLIM and FLIM (fluorescence lifetime imaging microscopy – recorded between beam blanking), whilst maintaining essential sub-micron spatial resolution. We demonstrate how the Pt(II) complex can be used to distinguish between cell nuclei and matrix proteins on the basis of emission lifetime, in both structured and homogeneous tissue sections; whilst also revealing how the Pt(II) emission lifetime varies with tissue matrix composition. The proposed imaging approach can be used in conjunction with any biocompatible emissive probe with a long emission lifetime – exemplified here by (1) – and for an array of fluorescent/phosphorescent labels, where discrimination is lifetime-based

The Influence of Interleukin-4 on Ligament Healing

Despite a complex cascade of cellular events to reconstruct the damaged extracellular matrix, ligament healing results in a mechanically inferior scarred ligament. During normal healing, granulation tissue expands into any residual normal ligamentous tissue (creeping substitution), resulting in a larger region of healing, greater mechanical compromise and an inefficient repair process. To control creeping substitution and possibly enhance the repair process, the antiinflammatory cytokine, interleukin-4 (IL-4), was administered to rats before and after rupture of their medial collateral ligaments. In vitro experiments showed a time-dependent effect on fibroblast proliferation after IL-4 treatment. In vivo treatments with IL-4 (100 ng/mL IV) for 5 days resulted in decreased wound size and type III collagen and increased type I procollagen, indicating a more regenerative early healing in response to the IL-4 treatment. However, continued treatment of IL-4 to day 11 antagonized this early benefit and slowed healing. Together, these results suggest that IL-4 not only influences the macrophages and T lymphocytes but also stimulates fibroblasts associated with the proliferative phase of healing in a dose-, cell-, and time-dependent manner. Although treatment significantly influenced healing in the first week after injury, IL-4 alone was unable to maintain this early regenerative response