Densely Entangled Financial Systems

In [1] Zawadoski introduces a banking network model in which the asset and counter-party risks are treated separately and the banks hedge their assets risks by appropriate OTC contracts. In his model, each bank has only two counter-party neighbors, a bank fails due to the counter-party risk only if at least one of its two neighbors default, and such a counter-party risk is a low probability event. Informally, the author shows that the banks will hedge their asset risks by appropriate OTC contracts, and, though it may be socially optimal to insure against counter-party risk, in equilibrium banks will {\em not} choose to insure this low probability event. In this paper, we consider the above model for more general network topologies, namely when each node has exactly 2r counter-party neighbors for some integer r>0. We extend the analysis of [1] to show that as the number of counter-party neighbors increase the probability of counter-party risk also increases, and in particular the socially optimal solution becomes privately sustainable when each bank hedges its risk to at least n/2 banks, where n is the number of banks in the network, i.e., when 2r is at least n/2, banks not only hedge their asset risk but also hedge its counter-party risk.Comment: to appear in Network Models in Economics and Finance, V. Kalyagin, P. M. Pardalos and T. M. Rassias (editors), Springer Optimization and Its Applications series, Springer, 201

Systemic risk and macroeconomic fat tails

We propose a mechanism for shock amplification that potentially can account for fat tails in the distribution of the growth rate of national output. We argue that extreme macroeconomic events, such as the Great Depression and the Great Recession, were preceded by significant turmoil in the banking system. We have developed a model of bank network formation and presented numerical simulations that show that, for the benchmark case, aggregate credit follows a random walk. When we introduce fire sales the model does not only produce larger variations in the growth of aggregate credit but also shows that there is an asymmetry between booms and busts that is also consistent with empirical evidence

Differences in Chlamydia Trachomatis Serovar E Growth Rate in Polarized Endometrial and Endocervical Epithelial Cells Grown in Three-Dimensional Culture

In vitro studies of obligate intracellular chlamydia biology and pathogenesis are highly dependent on the use of experimental models and growth conditions that mimic the mucosal architecture and environment these pathogens encounter during natural infections. In this study, the growth of Chlamydia trachomatis genital serovar E was monitored in mouse fibroblast McCoy cells and compared to more relevant host human epithelial endometrium-derived HEC-1B and cervix-derived HeLa cells, seeded and polarized on collagen-coated microcarrier beads, using a three-dimensional culture system. Microscopy analysis of these cell lines prior to infection revealed morphological differences reminiscent of their in vivo architecture. Upon infection, early chlamydial inclusion distribution was uniform in McCoy cells but patchy in both epithelial cell lines. Although no difference in chlamydial attachment to or entry into the two genital epithelial cell lines was noted, active bacterial genome replication and transcription, as well as initial transformation of elementary bodies to reticulate bodies, were detected earlier in HEC-1B than in HeLa cells, suggesting a faster growth, which led to higher progeny counts and titers in HEC-1B cells upon completion of the developmental cycle. Chlamydial development in the less relevant McCoy cells was very similar to that in HeLa cells, although higher progeny counts were obtained. In conclusion, this three-dimensional bead culture system represents an improved model for harvesting large quantities of infectious chlamydia progeny from their more natural polarized epithelial host cells

Characterization of Estrogen-Responsive Epithelial Cell Lines and Their Infectivity by Genital Chlamydia Trachomatis

Chlamydial attachment and infectivity in vitro and ascending disease and sequelae in vivo have been reported to be enhanced/modulated by estrogen. Endometrial carcinoma cell lines Ishikawa and HEC-1B and the breast cancer lines MCF-7 and HCC-1806 were examined for Chlamydia trachomatis E infectivity. Estrogen receptor (ER) presence was confirmed by Western blot and qRT-PCR analyses. FACS analysis was used to determine the percent of plasma membrane-localized ERs (mERs), and their activity was tested by estrogen binding and competitive estrogen antagonists assays. Chlamydiae grew in all cell lines with HEC (90%) ≫ MCF-7 (57%) \u3e Ishikawa (51%) ≫ HCC-1806 (20%). The cell line ER isoform composition was re-defined as: ERα + ERβ + for MCF-7, HCC-1806 and Ishikawa; and ERβ only for HEC-1B. HeLa cells were also tested and found to express ERβ, but not ERα. A small percentage of both ERs were surface-exposed and functionally active. The endometrium- predominant ERβ isoform was found in all cell lines, including those most representative of the common sites of C. trachomatis infection. Thus, the role of chlamydial attachment/infectivity will now be analyzed in ERβ + and - isogenic HEC-1B cells

Chlamydia Trachomatis Enters a Viable but Non-Cultivable (Persistent) State Within Herpes Simplex Virus Type 2 (HSV-2) Co-Infected Host Cells

Epidemiological and clinical studies have shown that double infection with herpes simplex virus type 2 (HSV-2) and Chlamydia trachomatis occurs in vivo. We hypothesized that co-infection would alter replication of these agents. To test this hypothesis, HeLa cells were infected with C. trachomatis serovar E, followed 24 h later by HSV-2 strain 333. Transmission electron microscopic (TEM) analyses indicated that, by 10 h after HSV addition, reticulate bodies (RBs) in coinfected cells were swollen, aberrantly shaped and electron-lucent. In infectious titre assays, HSV-2 coinfection abrogated production of infectious chlamydial progeny. Western blot analyses indicated that accumulation of chlamydial major outer membrane protein (MOMP) was decreased by HSV co-infection while accumulation of chlamydial heat-shock protein 60-1 (HSP60-1) was increased. Polymerase chain reaction (PCR) experiments indicated that chlamydial genome copy number was unaltered by HSV-2 superinfection. Semi-quantitative, reverse transcription PCR (RT-PCR) experiments demonstrated that levels of chlamydial groEL, ftsK, ftsW, dnaA and unprocessed 16S rRNA transcripts were not changed by HSV-2 super-infection. These data indicate that HSV-2 superinfection drives chlamydia into a viable but noncultivable state, which is the hallmark of persistence. Because chlamydial HSP60-1 has been associated with immunopathology in vivo, these results also suggest that disease severity might be increased in coinfected individuals