Price Discovery in Multiple-Dealer Markets: The Case of the Interbank Foreign Exchange Market

Price discovery is a principal function of financial markets. Yet, especially for dealership markets, financial economists know little about how prices are determined. In this paper I analyze the process of price discovery in the multiple-dealer, interbank spot market for foreign exchange. I use DM/$ quotes to calculate interbank dealers’ “information shares,” their proportional contributions to the variance of innovations in the implicit, efficient exchange rate. These information shares are used to analyze relationships between price discovery and dealer characteristics. Unlike the U.S. equity markets, where regional exchanges contribute relatively little to price discovery, less-active interbank dealers play a large role, impounding most of the information into quotes. A pooled analysis of dealers’ intraday information shares indicates that the lower the relative bid-ask spread and the greater the number of regional foreign exchange branches, the higher is a dealer’s contribution to price discovery. Dealer nationality, however, does not appear related to price discovery within dealers’ domestic markets.

The SEC's "Fair Value" Standard for Mutual Fund Investment in Restricted Shares and Other Illiquid Securities

Mutual funds generally do not invest in venture capital, private equity, or restricted shares of public companies. Consequently, individuals who desire to invest in such securities are unable to do so through diversified mutual funds. In this paper, we identify public policies and regulations that discourage mutual fund involvement in the markets for illiquid equity. We also present evidence that changes in SEC policy caused mutual funds to retreat from investing in illiquid equity. Under the Investment Company Act of l940, the SEC requires mutual fund boards to determine and report the “fair value” of their investments in restricted shares and other illiquid equity claims. The SEC interprets fair value to mean value in current sale. Under the Investment Company Act, fair value reporting is a “certification” standard that presumes investors rely on the value representations of the fund board and its auditors. We consider whether alternatives to certification and current sale valuation could reduce barriers to mutual fund investment, without exposing individuals who invest in mutual funds to excessive risk or potential manipulation. To assess the effects of public policies, we analyze recent efforts of the SEC to apply the fair-value standard and examine court decisions arising from subsequent litigation. We also analyze the financial economics literature concerning discounts for illiquidity and the implications for valuing restricted shares. The paper concludes with a discussion of policy alternatives, including allowing funds to rely more on “transparency” in lieu of certification and allowing funds more latitude in determining and reporting the values of their illiquid securities.

Critical comments on the WHO-UNEP State of the Science of Endocrine Disrupting Chemicals – 2012

AbstractEarly in 2013, the World Health Organization (WHO) released a 2012 update to the 2002 State of the Science of Endocrine Disrupting Chemicals. Several significant concerns have been identified that raise questions about conclusions reached in this report regarding endocrine disruption. First, the report is not a state-of-the-science review and does not follow the 2002 WHO recommended weight-of-evidence approach. Second, endocrine disruption is often presumed to occur based on exposure or a potential mechanism despite a lack of evidence to show that chemicals are causally established as endocrine disruptors. Additionally, causation is often inferred by the presentation of a series of unrelated facts, which collectively do not demonstrate causation. Third, trends in disease incidence or prevalence are discussed without regard to known causes or risk factors; endocrine disruption is implicated as the reason for such trends in the absence of evidence. Fourth, dose and potency are ignored for most chemicals discussed. Finally, controversial topics (i.e., low dose effects, non-monotonic dose response) are presented in a one-sided manner and these topics are important to understanding endocrine disruption. Overall, the 2012 report does not provide a balanced perspective, nor does it accurately reflect the state of the science on endocrine disruption

Selective inhibition of tropomyosin-receptor-kinase A (TrkA) reduces pain and joint damage in two rat models of inflammatory arthritis

Background: Inflammation is an essential component of arthritis pain. Nerve growth factor (NGF) plays a key role in acute and chronic pain states especially those associated with inflammation. NGF acts through tropomyosin-receptor-kinase A (TrkA). NGF blockade has reduced arthritis pain in clinical trials. We explored the mechanisms within the joint which may contribute to the analgesic effects of NGF by selectively inhibiting TrkA in carrageenan-induced or collagen-induced joint pain behaviour. The goal of the current study was to elucidate whether inflammation is central to the efficacy for NGF blockade. Methods: Rats were injected in their left knees with 2 % carrageenan or saline. Collagen-induced arthritis (CIA) was induced by intradermal injections of a mixture of bovine type II collagen (0.2 mg) and incomplete Freund’s adjuvant (0.2 mg). Oral doses (30 mg/kg) of AR786 or vehicle control were given twice daily after arthritis induction. Ibuprofen-treated (35 mg/kg, orally, once daily) rats with CIA were used as positive analgesic controls. Pain behaviour was measured as hind-limb weight-bearing asymmetry and hind-paw withdrawal thresholds to von Frey hair stimulation (carrageenan synovitis), or withdrawal to joint compression using a Randall Selitto device (CIA). Inflammation was measured as increased knee joint diameter and by histopathological analysis. Results: Intra-articular injections of carrageenan or induction of CIA was each associated with pain behaviour and synovial inflammation. Systemic administration of the TrkA inhibitor AR786 reduced carrageenan-induced or CIA-induced pain behaviour to control values, and inhibited joint swelling and histological evidence of synovial inflammation and joint damage. Conclusions: By using two models of varying inflammation we demonstrate for the first time that selective inhibition of TrkA may reduce carrageenan-induced or CIA-induced pain behaviour in rats, in part through potentially inhibiting synovial inflammation, although direct effects on sensory nerves are also likely. Our observations suggest that inflammatory arthritis causes pain and the presence of inflammation is fundamental to the beneficial effects (reduction in pain and pathology) of NGF blockade. Further research should determine whether TrkA inhibition may ameliorate human inflammatory arthritis

The James Webb Space Telescope Mission

Twenty-six years ago a small committee report, building on earlier studies, expounded a compelling and poetic vision for the future of astronomy, calling for an infrared-optimized space telescope with an aperture of at least $4m$. With the support of their governments in the US, Europe, and Canada, 20,000 people realized that vision as the $6.5m$ James Webb Space Telescope. A generation of astronomers will celebrate their accomplishments for the life of the mission, potentially as long as 20 years, and beyond. This report and the scientific discoveries that follow are extended thank-you notes to the 20,000 team members. The telescope is working perfectly, with much better image quality than expected. In this and accompanying papers, we give a brief history, describe the observatory, outline its objectives and current observing program, and discuss the inventions and people who made it possible. We cite detailed reports on the design and the measured performance on orbit.Comment: Accepted by PASP for the special issue on The James Webb Space Telescope Overview, 29 pages, 4 figure

GWAS meta-analysis of intrahepatic cholestasis of pregnancy implicates multiple hepatic genes and regulatory elements

Intrahepatic cholestasis of pregnancy (ICP) is a pregnancy-specific liver disorder affecting 0.5–2% of pregnancies. The majority of cases present in the third trimester with pruritus, elevated serum bile acids and abnormal serum liver tests. ICP is associated with an increased risk of adverse outcomes, including spontaneous preterm birth and stillbirth. Whilst rare mutations affecting hepatobiliary transporters contribute to the aetiology of ICP, the role of common genetic variation in ICP has not been systematically characterised to date. Here, we perform genome-wide association studies (GWAS) and meta-analyses for ICP across three studies including 1138 cases and 153,642 controls. Eleven loci achieve genome-wide significance and have been further investigated and fine-mapped using functional genomics approaches. Our results pinpoint common sequence variation in liver-enriched genes and liver-specific cis-regulatory elements as contributing mechanisms to ICP susceptibility

Bi-allelic Loss-of-Function CACNA1B Mutations in Progressive Epilepsy-Dyskinesia.

The occurrence of non-epileptic hyperkinetic movements in the context of developmental epileptic encephalopathies is an increasingly recognized phenomenon. Identification of causative mutations provides an important insight into common pathogenic mechanisms that cause both seizures and abnormal motor control. We report bi-allelic loss-of-function CACNA1B variants in six children from three unrelated families whose affected members present with a complex and progressive neurological syndrome. All affected individuals presented with epileptic encephalopathy, severe neurodevelopmental delay (often with regression), and a hyperkinetic movement disorder. Additional neurological features included postnatal microcephaly and hypotonia. Five children died in childhood or adolescence (mean age of death: 9 years), mainly as a result of secondary respiratory complications. CACNA1B encodes the pore-forming subunit of the pre-synaptic neuronal voltage-gated calcium channel Cav2.2/N-type, crucial for SNARE-mediated neurotransmission, particularly in the early postnatal period. Bi-allelic loss-of-function variants in CACNA1B are predicted to cause disruption of Ca2+ influx, leading to impaired synaptic neurotransmission. The resultant effect on neuronal function is likely to be important in the development of involuntary movements and epilepsy. Overall, our findings provide further evidence for the key role of Cav2.2 in normal human neurodevelopment.MAK is funded by an NIHR Research Professorship and receives funding from the Wellcome Trust, Great Ormond Street Children's Hospital Charity, and Rosetrees Trust. E.M. received funding from the Rosetrees Trust (CD-A53) and Great Ormond Street Hospital Children's Charity. K.G. received funding from Temple Street Foundation. A.M. is funded by Great Ormond Street Hospital, the National Institute for Health Research (NIHR), and Biomedical Research Centre. F.L.R. and D.G. are funded by Cambridge Biomedical Research Centre. K.C. and A.S.J. are funded by NIHR Bioresource for Rare Diseases. The DDD Study presents independent research commissioned by the Health Innovation Challenge Fund (grant number HICF-1009-003), a parallel funding partnership between the Wellcome Trust and the Department of Health, and the Wellcome Trust Sanger Institute (grant number WT098051). We acknowledge support from the UK Department of Health via the NIHR comprehensive Biomedical Research Centre award to Guy's and St. Thomas' National Health Service (NHS) Foundation Trust in partnership with King's College London. This research was also supported by the NIHR Great Ormond Street Hospital Biomedical Research Centre. J.H.C. is in receipt of an NIHR Senior Investigator Award. The research team acknowledges the support of the NIHR through the Comprehensive Clinical Research Network. The views expressed are those of the author(s) and not necessarily those of the NHS, the NIHR, Department of Health, or Wellcome Trust. E.R.M. acknowledges support from NIHR Cambridge Biomedical Research Centre, an NIHR Senior Investigator Award, and the University of Cambridge has received salary support in respect of E.R.M. from the NHS in the East of England through the Clinical Academic Reserve. I.E.S. is supported by the National Health and Medical Research Council of Australia (Program Grant and Practitioner Fellowship)