Commodity Prices, Overshooting, Money Surprises, and Fed Credibility

The general price level does not provide a sensitive indicator of whether monetary policy is tight or loose, because mostprices are sticky. Interest rates are free to move, but they are an ambiguous indicator of monetary policy: one does not know whether changes in the interest rate are due to changes in the expected inflation rate or the real interest rate.Commodity prices provide the ideal sensitive indicator.This paper has two distinct aims. First, a theoretical model of "over-shooting" in commodity markets is presented. A known change in the money supply is shown to cause an instantaneous change in commodity prices that is greater than the proportionate change that describes long-run equilibrium.Second, we take the occasion of the Fed's Friday money supply announcements to test the theory. We find that an unexpectedly large money announcement causes significant negative reactions in prices of six commodities. This supports at once the sticky-price or overshooting view, and the notion that the market has confidence in the Fed's commitment to correct any deviations from its money growth targets.

Financial crisis and non-performing exposures in Greece

The paper provides a brief history of the decade long Greek banking crisis, which reshaped the banking system into essentially four systemic banks, owning 96% of total assets. The crisis also led bank stock prices to a value of almost zero twice in a row, once in early 2012 after the PSI bond haircut, and again in late 2015, after the politically generated recession and the GREXIT fears of the first semester of the year. Today the amount of legacy nonperforming loans (NPLs) or exposures (NPEs) is enormous and by far the highest in Europe. It has to decline fast to non-crisis levels for the banks to be able to provide fresh credit and support the economy. A rapid reduction of NPEs is hampered by two key obstacles: First, the NPE reduction causes a loss in equity capital, which could lead to a violation of the Basel III capital requirements; and second, the NPE reduction can easily lead to negative annual profitability, which could force dilution of private sector stock ownership, caused by the 2014 legislation of Deferred Tax Credit (DTC). The higher the NPEs and the lower the provisions of banks, the higher their need for fresh capital. Banks differ in those characteristics and some may not avoid an eventual recapitalization in 2021. The stricter regulators are in their minimum capital ratio requirements or the more pessimistic private investors are on their valuations of the bank NPEs, the higher the need for fresh capital for the banks. A sensitivity analysis of the bank capital needs to these two exogenous variables (Table 2.2), reveals a fragile situation, in which capital needs can easily sky-rocket. In the medium term, the drive to increase annual profitability remains a strategic one-way street for banks. The challenges Greek banks face are very similar to those of European banks, though with some distinct features. The environment of low interest rates, intense competition with technology companies that are gradually penetrating retail banking, and the constant tightening of the supervisory framework, is putting pressure on their profitability. Additional Greek pressures arise from (i) the negative impact of reduced NPEs on accounting profitability; (ii) the digital transformation of the economy, which entails massive increases in investment in IT projects and in executives’ training; (iii) a switch of traditional bank customers towards alternative sources of financing; (iv) the high operating costs, which are inherited from the earlier prosperous times, and so on

Consumer Confidence and Elections

We investigate the behavior of consumer confidence around national elections in the EU-15 countries during 1985:1-2007:3. Consumer confidence increases before the date of elections and falls subsequently by almost the same amount. It is able to predict the strength of the performance of the incumbent party and its probability of re-election both alone and in the presence of macroeconomic and fiscal variables. The post-election drop is negatively related to the previous run up and is a function of the political - but not the economic - environment. A similar rise and fall characterizes consumer confidence in the United States.consumer confidence, national elections, incumbent party, macro-economy, fiscal conditions, political business cycle, EU-15, USA.

What Moves the Discount on Country Equity Funds?

The paper characterizes several empirical regularities of closed- end fund prices and examines the extent to which a 'sentiment' model of asset prices is consistent with the empirical regularities. We find that after controlling for the effect of cross-border investment restrictions, country funds trade at an average discount. Discounts vary substantially and contribute to a variance in country fund weekly returns which is generally three times greater than the returns on the net asset value (NAV). Regression analysis suggests that discounts have predictive power for fund returns but not for NAV returns, suggesting that investor 'sentiment' is a component of the price of a fund and not its NAV. Estimation of an unobserved components model on the discounts of the funds reveals a significant and strongly persistent common component across fund discounts. Regressions of fund and NAV returns on financial variables reveal that fund prices are 'sticky' with respect to movements in the host country's stock market and overly sensitive to variation in the U.S. and world stock markets. This relation is unaffected when we consider separately funds whose host countries restrict cross-border investment and funds which invest in emerging stock markets.

The Greek economic crisis and the banks

In this paper we review the Greek economic crisis focusing on the banking system. Banksovereign linkages were strong during the crisis: banks’ liquidity problems before the sovereign crisis spilled over to the real economy, and more importantly the sovereign’s default rendered all Greek banks insolvent because of their positions in government bonds. The Greek banking system was put back on its feet through a series of recapitalizations, following which industry concentration became the highest in Europe. Banks were slow to reduce non-performing loans (NPLs), which peaked at 48.9% of gross loans, because of their limited capital buffers. Government guarantees for securitizations were finally the key for NPLs to decline close to European averages. Banks’ capital buffers have improved through internal profitability but remain below European averages. Lending to the real economy is low but recovering, and banks’ exposure to the sovereign is again increasing

Chondromyxoid fibroma management: a single institution experience of 22 cases

Background: Several different strategies have been reported for the treatment of chondromyxoid fibromas, all with variable outcomes and high recurrence rates. Methods: We report on 22 consecutive cases of chondromyxoid fibromas treated by intralesional curettage, four of which had adjuvant cementation at our institution between 2003 and 2010. We assessed the functional outcome using the Musculoskeletal Tumour Society (MSTS) scoring system. Results: Nine males and 16 females with a mean age of 36.5 years (range 11 to 73) and a mean follow-up of 60.7 months were included in the study. Local recurrence occurred in two patients (9%) within the first 2 years following the index procedure. This was treated by re-curettage only of the residual defect. Two postoperative complications occurred: a superficial wound infection in one patient and a transient deep peroneal nerve neurapraxia in the other. The mean postoperative MSTS score was 96.7%. Conclusions: Intralesional curettage and cementation is as an effective treatment strategy for chondromyxoid fibromas, providing satisfactory functional results with a low recurrence rate. Careful case selection with stringent clinical and radiographic follow-up is recommended

Evidence on stock market speculative bubbles: Japan, the United States, and Great Britain

Stock market ; Stock - Prices ; Japan ; Great Britain

Investigating the ability of high-rate GNSS-PPP for determining the vibration modes of engineering structures: small scale model experiment

This study evaluates the performance of the Precise Point Positioning method using Global Navigation Satellite System measurements (GNSS-PPP) for monitoring vibration modes of shear type buildings excited by harmonic ground motions and hammer tests. For experimental testing, the shear type lumped-mass building system is represented by a specially designed metal frame model, resembling a three story building, which was excited on a small scale shaking table. The excitation protocols applied were harmonic motions with different frequencies and amplitudes. The metal model has special deformation plates at the column tips to prevent the nonlinear rotations and out-of-plane motions for the entire system. The fundamental vibration periods of the model structure were computed by a Finite Element Mathematical (FEM) model, which were compared with the position variations determined by GNSS-PPP. Two GNSS receivers were mounted on top of the model structure on the line perpendicular to the motion axis to measure the rotation motion. The GNSS data comprised dual-frequency observations with a 10 Hz sampling rate. GNSS-derived positioning was obtained by processing the data using a post-mission kinematic PPP method with fixed phase ambiguities. Analysis of the characteristics of the vibration frequencies showed that the high-rate GNSS PPP method can capture the frequencies of first motion mode of shear type structural response when compared with the FEM output. Results demonstrate the efficiency of the high-rate GNSS PPP method in monitoring first motion mode of a natural frequency

Prevalence, incidence burden and clinical impact of healthcare-associated infections and antimicrobial resistance: a national prevalent cohort study in acute care hospitals in Greece

Purpose: Assessing the overall burden of healthcare-associated infections (HAIs) is challenging, but imperative in evaluating the cost-effectiveness of infection control programs. This study aimed to estimate the point prevalence and annual incidence of HAIs in Greece and assess the excess length of stay (LOS) and mortality attributable to HAIs, overall and for main infection sites and tracer antimicrobial resistance (AMR) phenotypes and pathogens. Patients and methods: This prevalent cohort study used a nationally representative cross-section of 8,247 inpatients in 37 acute-care hospitals to record active HAIs of all types at baseline and overall LOS and in-hospital mortality up to 90 days following hospital admission. HAI incidence was estimated using prevalence-to-incidence conversion methods. Excess mortality and LOS were assessed by Cox regression and multistate models correcting for confounding and time-dependent biases. Results: HAIs were encountered with daily prevalence of 9.1% (95% confidence interval [CI] 7.8% – 10.6%). The estimated annual HAI incidence was 5.2% (95%CI 4.4% – 5.3%), corresponding to approximately 121,000 (95%CI 103,500 – 123,700) affected patients each year in the country. 90-day mortality risk was increased by 80% in patients with HAI compared to those without HAI (adjusted hazard ratio 1.8; 95%CI 1.3 – 2.6). Lower respiratory tract infections, bloodstream infections and multiple concurrent HAIs doubled the risk of death, whereas surgical site and urinary-tract infections were are not associated with increased mortality. AMR had significant impact on the daily risk of 90-day mortality, which was increased by 90%-110% in patients infected by carbapenem-resistant gram-negative pathogens (CR-GNBs). HAIs increased LOS for an average of 4.3 (95% CI 2.4– 6.2) additional days. Mean excess LOS exceeded 20 days in infections caused by major CR-GNBs. Conclusion: HAIs, alongside with increasing AMR, pose significant burden to the hospital system. Burden estimates obtained in this study will be valuable in future evaluations of infection prevention programs