Money and capital as competing media of exchange in a news economy

Conventional theory suggests that fiat money will have value in capital-poor economies. We demonstrate that fiat money may also have value in capital-rich economies, if the price of capital is excessively volatile. Excess asset-price volatility is generated by news; information that has no social value, but is privately useful in forming forecasts over the short-run return to capital. One advantage of fiat money is that its expected return is not linked directly to news concerning the prospects of an underlying asset. When money and capital compete as media of exchange, excess volatility in the short-term returns of liquid asset portfolios is mitigated and welfare is improved. A legal restriction that prohibits the use of capital as a payment instrument renders the expected return to money perfectly stable and, as a consequence, may generate an additional welfare benefit.Money theory ; Capital

Blocking Java Applets at the Firewall

This paper explores the problem of protecting a site on the Internet against hostile external Java applets while allowing trusted internal applets to run. With careful implementation, a site can be made resistant to current Java security weaknesses as well as those yet to be discovered. In addition, we describe a new attack on certain sophisticated firewalls that is most effectively realized as a Java applet

Planets Transiting Non-Eclipsing Binaries

The majority of binary stars do not eclipse. Current searches for transiting circumbinary planets concentrate on eclipsing binaries, and are therefore restricted to a small fraction of potential hosts. We investigate the concept of finding planets transiting non-eclipsing binaries, whose geometry would require mutually inclined planes. Using an N-body code we explore how the number and sequence of transits vary as functions of observing time and orbital parameters. The concept is then generalised thanks to a suite of simulated circumbinary systems. Binaries are constructed from RV surveys of the solar neighbourhood. They are then populated with orbiting gas giants, drawn from a range of distributions. The binary population is shown to be compatible with the Kepler eclipsing binary catalogue, indicating that the properties of binaries may be as universal as the initial mass function. These synthetic systems produce transiting circumbinary planets occurring on both eclipsing and non-eclipsing binaries. Simulated planets transiting eclipsing binaries are compared with published Kepler detections. We obtain 1) that planets transiting non-eclipsing binaries probably exist in the Kepler data, 2) that observational biases alone cannot account for the observed over-density of circumbinary planets near the stability limit, implying a physical pile-up, and 3) that the distributions of gas giants orbiting single and binary stars are likely different. Estimating the frequency of circumbinary planets is degenerate with the spread in mutual inclination. Only a minimum occurrence rate can be produced, which we find to be compatible with 9%. Searching for inclined circumbinary planets may significantly increase the population of known objects and will test our conclusions. Their existence, or absence, will reveal the true occurrence rate and help develop circumbinary planet formation theories.Comment: 19 pages, 14 figures, accepted August 2014 to A&A, minor changes to previous arXiv versio

Renormalization factor and effective mass of the two-dimensional electron gas

We calculate the momentum distribution of the Fermi liquid phase of the homogeneous, two-dimensional electron gas. We show that, close to the Fermi surface, the momentum distribution of a finite system with $N$ electrons approaches its thermodynamic limit slowly, with leading order corrections scaling as $N^{-1/4}$. These corrections dominate the extrapolation of the renormalization factor, $Z$, and the single particle effective mass, $m^*$, to the infinite system size. We show how convergence can be improved analytically. In the range $1 \le r_s \le 10$, we get a lower renormalization factor $Z$ and a higher effective mass, $m^*>m$, compared to the perturbative RPA values.Comment: 4 pages, 3 figure

Market Bubbles and Wasteful Avoidance: Tax and Regulatory Constraints on Short Sales

Although short sales make an important contribution to financial markets, this transaction faces legal constraints that do not govern long positions. In evaluating these constraints, other commentators, who are virtually all economists, have not focused rigorously enough on the precise contours of current law. Some short sale constraints are mischaracterized, while others are omitted entirely. Likewise, the existing literature neglects many strategies in which well advised investors circumvent these constraints; this avoidance may reduce the impact of short sale constraints on market prices, but may contribute to social waste in other ways. To fill these gaps in the literature, this paper offers a careful look at current law and draws three conclusions. First, short sales play a valuable role in the financial markets; while there may be plausible reasons to regulate short sales-- most notably, concerns about market manipulation and panics -- current law is very poorly tailored to these goals. Second, investor self-help can ease some of the harm from this poor tailoring, but at a cost. Third, relatively straightforward reforms can eliminate the need for self-help while accommodating legitimate regulatory goals. In making these points, we focus primarily on a burden that other commentators have neglected: profits from short sales generally are ineligible for the reduced tax rate on long-term capital gains, even if the short sale is in place for more than one year.Short sales, Momentum traders, Value investors