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| Assets pledged by a borrower to secure a loan or othercredit, and subject to seizure in the event of default. also called security. |
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| A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. |
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| A mortgage with an interest rate that may change, usually in response to changes in the Treasury Bill rate or the prime rate. |
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| A category of mortgages which have a risk potential that is greater than prime but less than subprime. T |
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| The annual rate of return on an investment, expressed as apercentage. also called yield. |
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| An unsecured obligation issued by a corporation or bank tofinance its short-term credit needs, such as accounts receivable and inventory. Maturities typically range from 2 to 270 days. |
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| Capital stock which provides a specific dividend that is paidbefore any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. |
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| A contract in which the seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price.also called repurchase agreement or buyback. |
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| 1929-1934---Ended by the New Deal |
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| A quantitative summary of a company's financial conditionat a specific point in time, including assets, liabilities and net worth. |
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| Recording the price or value of a security, portfolio, oraccount on a daily basis, to calculate profits and losses or to confirm that margin requirements are being met. |
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| An individual or institution which acts as an underwriter oragent for corporations and municipalities issuing securities. Most also maintain broker/dealer operations, maintainmarkets for previously issued securities, and offer advisoryservices to investors |
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| John Merriweather and Long Term Capital |
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| 1st Hedge Fund to go bankrupt in 1998; Bear Sterns refused to help |
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| Funds deposited by commercial banks at Federal Reserve Banks. Designed to enable banks temporarily short of theirreserve requirement to borrow reserves from banks havingexcess reserves. |
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| London Inter-Bank Offer Rate. The interest rate that thebanks charge each other for loans (usually in Eurodollars). This rate is applicable to the short-term internationalinterbank market, and applies to very large loans borrowed for anywhere from one day to five years. |
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| A private financial company, most well known for its manyreports and publications, and stock and mutual fund ratings. The S&P 500 is one of the most widely watched stock indexes. |
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| One of the most prominent credit rating agencies in the U.S. |
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| A curve that shows the relationship between yields and maturity dates for a set of similar bonds, usually Treasuries, at a given point in time. |
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| When a company is operating in Chapter 11, the court sees a loan to help them get back on their feet. |
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| The difference between the rate for Treasury Bills and the rate for Eurodollar Bills. The resulting price discrepancy is an indicator of credit risk. An increasing TED spread is thought to indicate increasing risk, while a decreasing TED spread is thought to indicate decreasing risk. |
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| Seperated Investment Banks from Commercial banks at the end of the Great Depression |
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| Gramm-Leach-Bliley Act 1999 |
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| States that investment banks are still allowed to give out loans and offer financial services as well as investor related financial services |
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| Yield that would be realized on a bond or other fixed income security if the bond was held until the maturity date. It is greater than the current yield if the bond is selling at a discount and less than the current yield if the bond is selling at a premium. |
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| Borrowing a security (or commodity futures contract) from a broker and selling it, with the understanding that it must later be bought back (hopefully at a lower price) and returned to the broker. Short selling (or "selling short") is a technique used by investors who try to profit from the falling price of a stock |
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| Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. One example is an unsecured bond. |
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| Face value amount of a bond |
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| Federal Deposit Insurance Corporation. A federal agency that insures deposits in member banks and thrifts up to $100,000. |
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| One of 12 regional banks established to maintain reserves, issue bank notes, and lend money to member banks. The Federal Reserve Banks are also responsible for supervising member banks in their areas, and are involved in the setting of national monetary policy. |
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| Smoot Hawley Tariff, 1930 |
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| Raised U.S. tariffs on over 20,000 imported goods to record levels. The ensuing retaliatory tariffs by U.S. trading partners reduced American exports and imports by more than half and according to some views may have contributed to the severity of the Great Depression. |
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| Started by Nazis; lasted from 1919-1933; experienced hyperinflation amongst many other problems that lead to decline |
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| Sell or transfer an asset prior to declaring bankruptcy. |
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| A fund into which a company sets aside money over time, in order to retire its preferred stock, bonds or debentures. |
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| Strike price for a call option |
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| Day where call option expires |
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| Market Volatility Index. An index designed to track market volatility as an independent entity for credit purposes |
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| First C.E.O of Bear Stearns, began company growth |
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| 2nd CEO of Bear, helped bring Jimmy Cayne on board |
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| A former CEO of Bear who was responsible for investing in sub prime and alt a mortgages. Inexperienced and argued as one of the worst CEOS of all time. Served as Chairman of the Board when the company went under |
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| Final CEO during the collapse, got put into a horrible situation |
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| Owned 5.9% of Bear, making him the 2nd largest stake holder. He made billions trading currency and as Bear stock kept plummeting, he kept buying in. |
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| C.F.O. of Bear Stearns who oversaw Tanan and Cioffee, who ran hedge funds that were leveraged 25 times. |
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| Fed Reserve president of New York who went into Bear to help them find a solution |
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| Secretary of Treasury and former CEO of Goldman Sachs who helped coordinate the buyout of Bear Stearns |
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| Chairman of the Fed who also helped coordinate a deal for the Bear Stearns buyout |
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| Ex-partner at Goldman Sachs. Expert Mergers and Acquisitions man, brought in by Bear Stearns to help bring in 20 million dollars of loans to get Bear Stearns surfaced. |
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| Investment banker from Lazard; brought in by Bear Stearns to help ensure a buyout. He was highly sought by Financial services CEOS for his advice |
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| CEO of JP Morgan Chase. Making money re-selling discount loans to Bear Stearns. Responsible for the buyout of Bear |
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| A security that is split into multiple traunches, each of which is given a different investment grade and is composed of different levels of mortgages |
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| Collateral Debt Obligation |
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| Composed of student loans, car loans, insurance policies |
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| Residential Mortgage Backed Security |
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| A type of mortgage-backed security composed of a wide array of different non-commercial mortgage debts. It securitizes the mortgage payments of non-commercial real estate. D |
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