21,948 research outputs found
Stock markets are not what we think they are: the key roles of cross-ownership and corporate treasury stock
We describe and document three mechanisms by which corporations can influence
or even control stock prices. (i) Parent and holding companies wield control
over other publicly traded companies. (ii) Through clever management of
treasury stock based on buyback programs and stock issuance, stock price
fluctuations can be amplified or curbed. (iii) Finally, history shows a close
interdependance between the level of stock prices on the one hand and merger
and acquisition activity on the other hand. This perspective in which Boards of
Directors of major companies shepherd the market offers a natural
interpretation of the so-called "herd behavior" observed in stock markets. The
traditional view holds that by driving profit expectations, corporations have
an indirect role in shaping the market. In this paper, we suggest that over the
last decades they became more and more the direct moving force of stock
markets.Comment: 9 pages, 3 figures, 1 tabl
Macro-players in stock markets
It is usually assumed that stock prices reflect a balance between large
numbers of small individual sellers and buyers. However, over the past fifty
years mutual funds and other institutional shareholders have assumed an ever
increasing part of stock transactions: their assets, as a percentage of GDP,
have been multiplied by more than one hundred. The paper presents evidence
which shows that reactions to major shocks are often dominated by a small
number of institutional players. Most often the market gets a wrong perception
and inadequate understanding of such events because the relevant information
(e.g. the fact that one mutual fund has sold several million shares) only
becomes available weeks or months after the event, through reports to the
Securities and Exchange Commission (SEC). Our observations suggest that there
is a radical difference between small () day-to-day price variations
which may be due to the interplay of many agents and large () price
changes which, on the contrary, may be caused by massive sales (or purchases)
by a few players. This suggests that the mechanisms which account for large
returns are markedly different from those ruling small returns.Comment: 17 pages, 7 figures, 3 table
Suicide: the key role of short range ties
The paper explores the connection between short-range social ties (i.e. links
with close relatives) and the occurrence of suicide. The objective is to
discriminate between a model based on social ties and a model based on
psychological traumas. Our methodological strategy is to focus on instances
characterized by the severance of some social ties. We consider several
situations of this kind. (i) Prisoners in the first days after their
incarceration. (ii) Prisoners in solitary confinement. (iii) Prisoners who are
transferred from one prison to another. (iv) Prisoners in closed versus open
prisons. (v) Prisoners in the weeks following their release. (vi) Immigrants in
the years following their relocation. (vii) Unmarried versus married people.
Furthermore, in order to test the impact of major shocks we consider the
responses in terms of suicides to the following shocks. (i) The attack of
September 11, 2001 in Manhattan. (ii) The Korean War. (iii) The two world wars.
(iv) The Great Depression in the United States. (v) The hyperinflation episode
of 1923 in Germany. Major global traumatic shocks such as 9/11 or wars have no
influence on suicide rates once changing environment conditions have been
controlled for.
Overall, it turns out that the observations have a natural interpretation in
terms of short-range ties. In contrast, the trauma model seems unable to
adequately account for many observations.Comment: 19 pages, 7 graphics, 4 table
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