The Value Relevance of Sentiment

It is generally accepted that excessive exuberance or gloom in investor sentiment contributes to booms and crashes in share prices. However, views differ on the merits of active policy intervention due to gaps in our understanding of the transmission mechanism. To fill this gap we apply a fully ex ante valuation model in which an index of investor sentiment is included along with earnings and growth fundamentals to explain value. The outcome is a precise indication of the value relevance of sentiment. We employ the investor sentiment indicator proposed by Baker and Wurgler (2007). Valuation, and implied permanent growth, based on the inclusion of standard fundamentals is compared with that obtained when sentiment is added. The resulting ratio produces an index of ’the valuation effects of sentiment’ that can be assessed with statistical significance. Out-of-sample fit is also examined. For the Dow index the valuation effects of sentiment are significant and as large as 40% of market value at the peak of the ’dot-com’ bubble. The index we propose identifies conditions, detectable in advance and under the control of policy makers, that are conducive to the creation of asset bubbles. It is easy to construct, timely, robust and can be used improve our understanding of what leads to bubbles and crashes and to inform policy.Bubbles, fundamental valuation, sentiment, early warning indicators

Repo Market Microstructure in Unusual Monetary Policy Conditions

The financial turmoil that began in mid-2007 produced severe stress in interbank markets and prompted significant changes in central banks’ funding operations. We examine the changing characteristics of ECB official interventions through the crisis and assess how they affected the efficiency and reliability of the secondary repo market as a mechanism for the distribution of interbank funding. The limit orderbook from the BrokerTec electronic repo trading platform is reconstructed to provide a range of indicators of participating banks’ aversion to the risk of failing to fund their liquidity needs. These indicators anticipate similar variables from ECB reverse repo auctions and are also affected by surprise outcomes of auctions.Repo, Financial crisis, liquidity, market microstructure, monetary policy operations

G-protein–gated TRP-like Cationic Channel Activated by Muscarinic Receptors: Effect of Potential on Single-channel Gating

There is little information about the mechanisms by which G-protein–coupled receptors gate ion channels although many ionotropic receptors are well studied. We have investigated gating of the muscarinic cationic channel, which mediates the excitatory effect of acetylcholine in smooth muscles, and proposed a scheme consisting of four pairs of closed and open states. Channel kinetics appeared to be the same in cell-attached or outside-out patches whether the channel was activated by carbachol application or by intracellular dialysis with GTPγS. Since in the latter case G-proteins are permanently active, it is concluded that the cationic channel is the major determinant of its own gating, similarly to the KACh channel (Ivanova-Nikolova, T.T., and G.E. Breitwieser. 1997. J. Gen. Physiol. 109:245–253). Analysis of adjacent-state dwell times revealed connections between the states that showed features conserved among many other ligand-gated ion channels (e.g., nAChR, BKCa channel). Open probability (PO) of the cationic channel was increased by membrane depolarization consistent with the prominent U-shaped I-V relationship of the muscarinic whole-cell current at negative potentials. Membrane potential affected transitions within each closed-open state pair but had little effect on transitions between pairs; thus, the latter are likely to be caused by interactions of the channel with its ligands, e.g., Ca2+ and Gαo-GTP. Channel activity was highly heterogeneous, as was evident from the prominent cycling behavior when PO was measured over 5-s intervals. This was related to the variable frequency of openings (as in the KACh channel) and, especially, to the number of long openings between consecutive long shuttings. Analysis of the underlying Markov chain in terms of probabilities allowed us to evaluate the contribution of each open state to the integral current (from shortest to longest open state: 0.1, 3, 24, and 73%) as PO increased 525-fold in three stages

The concise guide to PHARMACOLOGY 2013/14:Ion channels

The Concise Guide to PHARMACOLOGY 2013/14 provides concise overviews of the key properties of over 2000 human drug targets with their pharmacology, plus links to an open access knowledgebase of drug targets and their ligands (www.guidetopharmacology.org), which provides more detailed views of target and ligand properties. The full contents can be found at http://onlinelibrary.wiley.com/doi/10.1111/bph.12444/full. Ion channels are one of the seven major pharmacological targets into which the Guide is divided, with the others being G protein-coupled receptors, ligand-gated ion channels, catalytic receptors, nuclear hormone receptors, transporters and enzymes. These are presented with nomenclature guidance and summary information on the best available pharmacological tools, alongside key references and suggestions for further reading. A new landscape format has easy to use tables comparing related targets. It is a condensed version of material contemporary to late 2013, which is presented in greater detail and constantly updated on the website www.guidetopharmacology.org, superseding data presented in previous Guides to Receptors and Channels. It is produced in conjunction with NC-IUPHAR and provides the official IUPHAR classification and nomenclature for human drug targets, where appropriate. It consolidates information previously curated and displayed separately in IUPHAR-DB and the Guide to Receptors and Channels, providing a permanent, citable, point-in-time record that will survive database updates