The Chrysler effect : the impact of the Chrysler bailout on borrowing costs

Did the U.S. government's intervention in the Chrysler reorganization overturn bankruptcy law? Critics argue that the government-sponsored reorganization impermissibly elevated claims of the auto union over those of Chrysler's other creditors. If the critics are correct, businesses might suffer an increase in their cost of debt because creditors will perceive a new risk, that organized labor might leap-frog them in bankruptcy. This paper examines the financial market wherethis effect would be most detectible, the market for bonds of highly unionized companies. The authors find no evidence of a negative reaction to the Chrysler bailout by bondholders of unionized firms. They thus reject the notion that investors perceived a distortion of bankruptcy priorities. To the contrary, bondholders of unionized firms reacted positively to the Chrysler bailout. This evidence suggests that bondholders interpreted the Chrysler bailout as a signal that the government will stand behind unionized firms. The results are consistent with the notion that too-big-to-fail government policies generate moral hazard in the credit markets.Debt Markets,Bankruptcy and Resolution of Financial Distress,Emerging Markets,Deposit Insurance,Access to Finance

Trusts Versus Corporations: An Empirical Analysis of Competing Organizational Forms

This paper studies the effects of organizational form on managerial behavior and firm performance, from an empirical perspective. Managers of trusts are subject to stricter fiduciary responsibilities than managers of corporations. This paper examines the ramifications empirically, by exploiting data generated by a change in British regulations in the 1990s that allowed mutual funds to organize as either a trust or a corporation. I find evidence that trust law is effective in curtailing opportunistic behavior, as trust managers charge significantly lower fees than their observationally equivalent corporate counterparts. Trust managers also incur lower risk. However, evidence suggests that trust managers tend to underperform their corporate counterparts, even after adjusting for the differences in risk. These results show that the business flexibility granted by corporations leads to greater agency conflict and risk taking, but also to potentially superior risk-adjusted performance. An investor who invests $100,000 in a trust, instead of an equivalent corporation, would save about$100 per year in agency costs, but would forgo about $1,300 per year in gross risk-adjusted performance. The results have implications for corporate governance design, suggesting that heightened fiduciary duties can enhance investor protection by mitigating agency conflict and lessening managerial risk taking, but at the possible cost of inferior risk-adjusted performance

Mutual Fund Capital Structure

The Investment Company Act of 1940 regulates the capital structure of mutual funds in order to restrain their leverage and speculative character. It is often (mistakenly) assumed that the law prohibits open-end mutual funds from borrowing money. This Article (I) analyzes the law governing mutual fund capital structure to reveal when (and to what extent) borrowing is allowed and (ii) examines a novel dataset on mutual fund capital structure that shows borrowing is an unexpectedly common practice. Using data on all registered investment companies in the U.S. from 1998 to 2013, I find that nearly 8% of open-end mutual funds, and 10% of all mutual funds, borrow money for leverage purposes each year. This figure increases to over 12% of funds when I include non-conventional forms of borrowing. In fact, mutual funds borrow about as often as they employ the most commonly used derivatives. Closed-end funds are more aggressive than open-end funds in their borrowing, often pushing leverage to the regulatory limits. I find that, in addition to borrowing for leverage purposes, mutual funds also borrow on a short-term basis to manage liquidity, via a host of practices: bank lines of credit, overdrafts on custodial accounts, and joint borrowing and lending facilities that allow funds to borrow from other funds. Recent regulatory initiatives (which focus on risks arising from illiquidity and derivatives) overlook the substantial borrowing practices of mutual funds

Understanding the Bankruptcy of Chrysler and General Motors: A Primer

U.S. Auto Industry Bailou

Firm Reputation and Cost of Debt Capital

We examine the relation between firm reputation and the cost of debt financing. We posit that corporate reputation represents “soft information” not captured by balance sheet variables, which is nonetheless valuable to lenders. Using Fortune magazine’s survey of company reputation, we find an inverse relation between a company’s reputation and its bond credit spreads. We also find that firms with high reputation face less stringent covenants and are less likely to be the target of SEC fraud investigations. Further testing shows that bad reputation is a good ex ante predictor of corporate failure. Our study provides evidence that firm reputation is an important consideration in the pricing of corporate public debt

Bulk genetic characterization of Ghanaian maize landraces using microsatellite markers

Maize (Zea mays L) was first introduced into Ghana over five centuries ago and remains the most important cereal staple, grown in all agro-ecologies across the country. Yield from farmers’ fields are low, which is attributed in part to farmer’s preferences and/or reliance on local landraces for cultivation. Efforts are underway to improve some of these landraces for improved productivity. Seeds of maize landraces cultivated in all agro-ecologies were col¬lected for genetic characterization using a bulked fingerprinting technique and 20 SSR markers. In all, 20 popula¬tions of 15 plants each from Ghana and 4 control populations from Latin America were characterized. The cluster analysis grouped the 20 landraces into two major groups corresponding to the vegetation/climatic conditions of the north and south of the country. Genotypes from Ashanti, which is centrally located, fell into both major clus¬ters, which suggest its importance in maize seed distribution in Ghana and also the diverse climate/vegetation. A Structure analyses grouped the genotypes into two major clusters similar to the UPGMA cluster, and populations were not fully distinct according to F statistics. The results suggest that breeders should make performance data available to seed dealers for better productivity

Identifying active vascular microcalcification by (18)F-sodium fluoride positron emission tomography.

Vascular calcification is a complex biological process that is a hallmark of atherosclerosis. While macrocalcification confers plaque stability, microcalcification is a key feature of high-risk atheroma and is associated with increased morbidity and mortality. Positron emission tomography and X-ray computed tomography (PET/CT) imaging of atherosclerosis using (18)F-sodium fluoride ((18)F-NaF) has the potential to identify pathologically high-risk nascent microcalcification. However, the precise molecular mechanism of (18)F-NaF vascular uptake is still unknown. Here we use electron microscopy, autoradiography, histology and preclinical and clinical PET/CT to analyse (18)F-NaF binding. We show that (18)F-NaF adsorbs to calcified deposits within plaque with high affinity and is selective and specific. (18)F-NaF PET/CT imaging can distinguish between areas of macro- and microcalcification. This is the only currently available clinical imaging platform that can non-invasively detect microcalcification in active unstable atherosclerosis. The use of (18)F-NaF may foster new approaches to developing treatments for vascular calcification.AI Wellcome Trust PhD Programme in Metabolic and Cardiovascular Disease Grant Number 096823/Z/11/Z, Wellcome Trust (WT103782AIA), British Heart Foundation (RG/10/007/28300, CH/09/002/26360, PG/12/8/29371), NHS Research Scotland and NIHR Cambridge Biomedical Research Centre.This is the final version of the article. It first appeared from the Nature Publishing Group via http://dx.doi.org/10.1038/ncomms849

Attracting volunteers in highly multicultural societies: a marketing challenge

Volunteer managers face a typical marketing problem: how to identify the right consumers (in this case, volunteers), attract them, and keep them loyal. In multicultural societies this challenge is amplified because of the different groups originating from countries that can vary significantly in terms of the extent of volunteering and reasons for being involved. The consequence of this heterogeneity is limited success of generic marketing campaigns. Using the theory of planned behavior, we investigate differences between Australian residents from different cultural backgrounds in their volunteering behavior. Groups differed in attitude, social norm, and perceived behavioral control, suggesting the need for customized marketing strategies. Theoretically, results provide evidence that volunteers in multicultural societies cannot be viewed as one homogeneous mass. Practically, results offer insight into the factors influencing the behavior of each cultural group, and can inform customized campaigns to tap into the large base of volunteers from different backgrounds

Evaluation of stroke services in Anglia Stroke Clinical Network to examine the variation in acute services and stroke outcomes.

BACKGROUND: Stroke is the third leading cause of death in developed countries and the leading cause of long-term disability worldwide. A series of national stroke audits in the UK highlighted the differences in stroke care between hospitals. The study aims to describe variation in outcomes following stroke and to identify the characteristics of services that are associated with better outcomes, after accounting for case mix differences and individual prognostic factors. METHODS/DESIGN: We will conduct a cohort study in eight acute NHS trusts within East of England, with at least one year of follow-up after stroke. The study population will be a systematically selected representative sample of patients admitted with stroke during the study period, recruited within each hospital. We will collect individual patient data on prognostic characteristics, health care received, outcomes and costs of care and we will also record relevant characteristics of each provider organisation. The determinants of one year outcome including patient reported outcome will be assessed statistically with proportional hazards regression models. Self (or proxy) completed EuroQol (EQ-5D) questionnaires will measure quality of life at baseline and follow-up for cost utility analyses. DISCUSSION: This study will provide observational data about health service factors associated with variations in patient outcomes and health care costs following hospital admission for acute stroke. This will form the basis for future RCTs by identifying promising health service interventions, assessing the feasibility of recruiting and following up trial patients, and provide evidence about frequency and variances in outcomes, and intra-cluster correlation of outcomes, for sample size calculations. The results will inform clinicians, public, service providers, commissioners and policy makers to drive further improvement in health services which will bring direct benefit to the patients.RIGHTS : This article is licensed under the BioMed Central licence at http://www.biomedcentral.com/about/license which is similar to the 'Creative Commons Attribution Licence'. In brief you may : copy, distribute, and display the work; make derivative works; or make commercial use of the work - under the following conditions: the original author must be given credit; for any reuse or distribution, it must be made clear to others what the license terms of this work are

Single hadron response measurement and calorimeter jet energy scale uncertainty with the ATLAS detector at the LHC

The uncertainty on the calorimeter energy response to jets of particles is derived for the ATLAS experiment at the Large Hadron Collider (LHC). First, the calorimeter response to single isolated charged hadrons is measured and compared to the Monte Carlo simulation using proton-proton collisions at centre-of-mass energies of sqrt(s) = 900 GeV and 7 TeV collected during 2009 and 2010. Then, using the decay of K_s and Lambda particles, the calorimeter response to specific types of particles (positively and negatively charged pions, protons, and anti-protons) is measured and compared to the Monte Carlo predictions. Finally, the jet energy scale uncertainty is determined by propagating the response uncertainty for single charged and neutral particles to jets. The response uncertainty is 2-5% for central isolated hadrons and 1-3% for the final calorimeter jet energy scale.Comment: 24 pages plus author list (36 pages total), 23 figures, 1 table, submitted to European Physical Journal