Trichet Bonds To Resolve the European Sovereign Debt Problem

We propose the creation of “Trichet Bonds” as a comprehensive solution to the current sovereign debt crisis in the EU area. “Trichet Bonds,” to be named after the ECB president Jean-Claude Trichet, will be similar to “Brady Bonds” that resolved the Latin American debt crisis in the late 1980s and were named after the then Treasury Secretary Nicholas Brady. Like the Brady Bonds, Trichet Bonds will be new long-duration bonds issued by countries in the EU area that will be collateralized by zero-coupon bonds of the same duration issued by the ECB. The zero-coupon bonds will be sold by the ECB to the countries issuing Trichet Bonds, which will be offered in exchange for outstanding sovereign debt of the countries. The exchange is offered at market value, so current debt holders will experience a “haircut” from par value, and thus the exchange does not involve a “bailout.” However, present holders of sovereign debt will be exchanging low quality bonds with limited liquidity, for higher quality bonds with greater liquidity. Debt holders not accepting the exchange will be at risk of a forced restructuring at a later date at terms less favorable. The effect of the exchange offer, if a threshold of approximately 70% approve it, is to replace old debt with a lesser amount of new debt with longer maturities. The creation of Trichet bonds will result in various advantages both in comparison to the present unstable situation and other proposed solutions. First, the long duration of Trichet bonds will eliminate the immediate crisis caused by short term expiration of significant amounts of debt which is looming over Greece, Ireland, Portugal, Spain and possibly other EU countries. Second, the guarantee of the principal with the zero-coupon ECD bond collateral increases the quality of the Trichet Bonds compared to existing sovereign debt. Third, the market for the new Trichet Bonds will be liquid and likely to trade at appreciating prices as refinancing (roll-over) risk is reduced and time is allowed for economic reforms by the issuing countries (a condition of the ECB) to take effect. In addition, the exchange of existing sovereign debt for Trichet bonds will force many European banks holding the sovereign debt to take the write-offs required, thus making their own balance sheets more transparent. Many European banks are thought to have large holdings of sovereign debt from the “peripheral” countries that have not been marked-to-market, and thus represent sizeable potential losses for the banks when the sovereign debt is ultimately restructured, as we believe it must be over the next few years. Most of the sovereign bank debt likely to be exchanged, however, is held by larger German, French and Swiss banks with the capability (if not necessarily the desire) to take the write-offs required. The overhang of such future losses affects the entire European banking system at a time when it too is being restructured. The ECB, and the European central banks need to identify those banks that are impaired by excessive sovereign holdings and assist them in recapitalization – the sooner the better – but they should also push the larger, stronger banks to accept the exchange offers in the interest of bank transparency and restructuring as well as in resolving the sovereign debt problem. Clearly the two problems – sovereign debt and bank restructuring – are connected. The issuance of Trichet Bonds, will help to resolve both problems by recognizing market realities and offering an easier way out than through a forced, cram-down restructuring once the ailing sovereigns exhaust their ability to repay the existing debt. There are significant advantages to Trichet bonds over other discussed solutions to the sovereign debt problem. One such proposed solution is the issuance of “Euro Bonds” guaranteed by the Eurozone countries or the EU itself for the purpose of redeeming sovereign bonds by market purchases, or by lending the proceeds to the countries involved for them to acquire their debt. Apart from the considerable political obstacles to such a program, the undertaking actually makes it less likely that existing self-interested debt-holders will sell in the market. The implication of the program is that either through market interventions that push prices up, or by the assumption that the program will continue to enable the debt to be retired at par on maturity, debt-holders won’t sell unless the price is pushed high enough to constitute a bailout. The ECB’s current efforts to support the prices of distressed sovereign bonds is currently having this effect, which transfers some, if not all of the cost of resolving the problem to European taxpayers, where increasingly it is resented. The alternative approach, that has only been discussed by market participants, is for a Russian or Argentine solution in which the debt-holders are made a take-it-or-leave-it offer to exchange outstanding debt for new, generally illiquid bonds at an arbitrary price that discourages future investment by the market. Such an approach is understood by the sovereign debt market to constitute a de facto default. Such a default would likely have serious adverse consequences for the Euro and the EU, and may be less likely that a bailout of some kind. The great advantage of Trichet Bonds is that they avoid both bailouts and defaults.Trichet bonds, sovereign debt, euro, debt restructuring, Greece, Ireland, Portugal, Spain, Italy, Brady bonds

Modelling the Galactic bar using OGLE-II Red Clump Giant Stars

Red clump giant stars can be used as distance indicators to trace the mass distribution of the Galactic bar. We use RCG stars from 44 bulge fields from the OGLE-II microlensing collaboration database to constrain analytic tri-axial models for the Galactic bar. We find the bar major axis is oriented at an angle of 24 - 27 degrees to the Sun-Galactic centre line-of-sight. The ratio of semi-major and semi-minor bar axis scale lengths in the Galactic plane x_0, y_0, and vertical bar scale length z_0, is x_0 : y_0 : z_0 = 10 : 3.5 : 2.6, suggesting a slightly more prolate bar structure than the working model of Gerhard (2002) which gives the scale length ratios as x_0 : y_0 : z_0 = 10 : 4 : 3 .Comment: 15 pages, 10 figures, accepted for publication in MNRAS. Supplementary material available online: 10 pages, 10 figure

Socrates\u27 Evil Associates and the Motivation for his Trial and Condemnation

We argue against those who construe the charge made by Polycrates, that Socrates was the teacher of Alcibiades and Critias, to be a substantial feature of the prejudice that Socrates faced as he stood trial for impiety and corrupting the youth

The Morphology of Type Ia Supernovae Light Curves

We present a family of six BVI template light curves for SNe Ia for days -5 and +80, based on high-quality data gathered at CTIO. These templates display a wide range of light curve morphologies, with initial decline rates of their B light curves between m15(B)=0.87 mag and 1.93 mag. We use these templates to study the general morphology of SNe Ia light curves. We find that several of the main features of the BVI templates correlate tightly with m15(B). In particular, the V light curves, which are probably a reasonably good approximation of the bolometric light curves, display an orderly progression in shapes between the most-luminous, slowest-declining events and the least-luminous, fastest-declining SNe. This supports the idea that the observed spectroscopic and photometric sequences of SNe Ia are due primarily to one parameter. Nevertheless, SNe with very similar initial decline rates do show significant differences in their light curve properties when examined in detail, suggesting the influence of one or more secondary parameters.Comment: 32 pages, 15 figures, to appear in the Astronomical Journa

Web-Based Training for an Evidence-Supported Treatment: Training Completion and Knowledge Acquisition in a Global Sample of Learners

The purpose of this investigation is to describe the characteristics of professional and preprofessional learners who registered for and completed TF-CBTWeb, a modular, web-based training program designed to promote the dissemination of Trauma-Focused Cognitive Behavioral Therapy (TF-CBT) and to demonstrate the feasibility of this method of dissemination. Between October 1, 2005, and October 1, 2012, a total of 123,848 learners registered for TF-CBTWeb, of whom 98,646 (79.7%) initiated the learning activities by beginning the first module pretest. Of those, 67,201 (68.1%) completed the full training. Registrants hailed from 130 countries worldwide, and they had varied educational backgrounds, professional identities (both professional and preprofessional), and a range of experience working with child trauma victims. Learners who were from the United States, students, those with master’s degrees, and those with fewer years of experience working with child trauma victims tended to have the highest course completion rates. Learners displayed significant increases in knowledge about each component of TF-CBT, based on module pretest and posttest scores. The advantages and limitations of this web-based training program evaluation are discussed, while important implications for the use of web-based trainings are reviewed

Advancing Science through Conversations: Bridging the Gap between Blogs and the Academy

Blogs have stormed the Internet, providing an interactive medium for rapid and wide-reaching information dispersal. But is there a place for blogs in academia

Autonomous Ground Photographer

Dr. Penczykowski, a biology professor at Washington University in St. Louis, researches the effects of powdery mildew on three plant species. Her lab currently collects data in the field by manually counting the number of infected plants with the assistance of a simple PVC grid. Therefore, this projects aims to automate this process by capturing images that can then be processed in her lab after

Interfacial band-edge energetics for solar fuels production

Photoelectrochemical (PEC) water splitting has received growing attention as a potential pathway to replace fossil fuels and produce a clean, renewable, and sustainable source of fuel. To achieve overall water splitting and the associated production of solar fuels, complex devices are needed to efficiently capture light from the sun, separate photogenerated charges, and catalyze reduction and oxidation reactions. To date, the highest performing solar fuels devices rely on multi-component systems, which introduce interfaces that can be associated with further performance loss due to thermodynamic and kinetic considerations. In this review, we identify several of the most important interfaces used in PEC water splitting, summarize methods to characterize them, and highlight approaches to mitigating associated loss mechanisms.The authors thank Dr Eric Miller for the inspiration to compile this review, and the members of the U.S. Department of Energy’s Photoelectrochemical Working Group and Task 35 (Renewable Hydrogen) of the International E nergy Agency’s Hydrogen Imple- menting Agreement for helpful comments, suggestions, and dis- cussions, specifically Prof. Shane Ardo, Dr John Turner, Prof. Dunwei Wang, and Prof. Shannon Boettcher. WAS greatly acknowl- edges funding support from the FOM/NWO/Shell Program on CO 2 - neutral Fuels (Project – APPEL). IDS was supported by the Joint Center for Artificial Photosynthesis, a DOE Energy Innovation Hub, supported through the Office of Science of the U.S. Department of Energy under Award Number DE-SC0004993. NCS acknowledges start-up funds from Lehigh University. JB thanks financial support from GeneralitatValenciana (ISIC/ 2012/008). A summary version of this review paper (DOI: 10.2172/1209498), and associated summary tables that will be updated as the field progresses, will be available on the working group website (http://energy.gov/eere/fuelcells/ photoelectrochemical-working-group)