Financial innovation is the engine driving the financial system toward improved performance in th... more Financial innovation is the engine driving the financial system toward improved performance in the real economy. The conventional view of financial instruments is based upon the categorical distinction between debt and equity, but financial innovations have evolved less as distinct categories than as a range of financial technologies involving characteristics of both, and in the high‐yield market, innovative debt securities have emerged, which have added value by various means. During the US recession and credit crunch of 1974, many companies (especially small and medium‐sized enterprises and emerging firms) learned that capital access was no longer guaranteed on the basis of profits or success. With dramatic changes in the world economy, companies required innovative securities to provide them with the financial freedom necessary to survive and grow, to enhance their flexibility in managing the capital structure of their firms in changing times, and to finance their objectives for ...
The previous chapter discussed the factors that triggered the price collapse of the high‐yield ma... more The previous chapter discussed the factors that triggered the price collapse of the high‐yield market in the USA in 1989 and 1990. This chapter turns to the question of when and how the first movers returned to the market in 1991 and renewed it from then on with an activity that far surpassed high‐yield bond issuance and performance over previous decades. Year‐by‐year data are presented on the recovery for the US market, which is discussed in detail by economic industries and sectors, and by reference to individual companies. Separate analyses are given of high‐yield bonds during the transition years of 1991, 1992, 1993, and 1994. The chapter ends by briefly discussing the developing non‐US issuance market in the 1990s.
The chapter starts by pointing out that a fundamental mismatch exists between the sources of job ... more The chapter starts by pointing out that a fundamental mismatch exists between the sources of job creation and capital formation in the USA, and that US financial history can be read as a long attempt to resolve this. Flow of funds data from the 1950s to the late 1990s reflect the relative contraction of financial institutional sources of capital and the expansion of capital markets. However, an analysis of this structural shift shows that small businesses have participated less than large ones (although they represent over 40% of total assets, debt, and net worth), and they remain disproportionately dependent on banks as their major source of capital. The effect of the recession of the early 1990s on such small firms is discussed in terms of the four sources of regulatory chokes (i.e. overregulation) that have hampered their economic growth: banking regulations, insurance regulations, thrift regulations, and merger regulations. The last part of the chapter discusses the reinvention ...
This short introductory chapter provides a brief analysis of the high‐yield (junk bond) market in... more This short introductory chapter provides a brief analysis of the high‐yield (junk bond) market in the USA in 2001 and 2002, discussing the multitude of influences upon it, including the September 11, 2001 terrorist attacks. It notes that any attempt to compare the impact of these attacks with previous historical events will be flawed because the combination of an act of war committed in the USA at the time of a recession has never before occurred. A table is presented that attempts to sort out the positive and negative effects of individual events and circumstances on the market for high‐yield securities, and a summary is given of the immediate damage to the credit markets in September 2001. It is suggested that there is at least anecdotal evidence of large cash positions sitting on the sidelines globally, so that any recovery could be significant.
This chapter first presents a brief history of the high‐yield securities market in the USA since ... more This chapter first presents a brief history of the high‐yield securities market in the USA since the 1970s. It then discusses the etymology of the term ‘junk bonds’, and goes on to describe critical events in the high‐yield market from the period 1989–1990 – which has often been characterized as the time of the beginning of the end for the market. The next part of the chapter discusses the capital access and high‐yield financial innovations that led to the development of the high‐yield securities market from the late 1970s, giving a comparative breakdown of the distribution of the main uses of high‐yield proceeds in the periods 1983–1989 and 1990–1999, and a year‐by‐year breakdown of the use of proceeds from 1983 to 2000. Last, the junk bond situation in 2000–2002 is contrasted with that in the 1990s, giving comparative year‐by‐year data for the distress ratio, the percentage of Rule 144A (which permits private placements to be freely traded among qualified institutional buyers (QIB...
In this chapter, the issue of at-risk cultural heritage in the Middle East is addressed through t... more In this chapter, the issue of at-risk cultural heritage in the Middle East is addressed through the application of cyber-archaeology tools for data capture and dissemination. Working with an economic model to create a Heritage Asset District in the environs of Jerusalem, virtual reality for personal head-mounted devices and immersive CAVE platforms are used to help create high-value cultural heritage attractions designed to attract visitors to the district, thereby generating economic benefits. In the case study presented here, the district focuses on the Kidron Valley, which has its origin near the Temple Mount in the Old City of Jerusalem, and follows the river flowing eastward through the Judean Desert, where it empties into the Dead Sea. The most prominent cultural heritage site along the wadi (riverbed) is the Mar Saba Greek Orthodox monastery, dating to the fifth century CE. A helium-balloon photographic platform with high-definition photography and Structure from Motion (SfM)...
I n the twentieth century a crisis developed in transportation that coincided with and contribute... more I n the twentieth century a crisis developed in transportation that coincided with and contributed to the crisis of the city. "We shall solve the problems of the city by leaving the city," promised Henry Ford, and current federal policies threaten to make the aoandonment of cities into an object of public policy. Scorned as they may be, cities are inhabited places, and their social and physical decay has consequences that extend well beyond the city limits. Rather than serving existing urban populations, highway transportation redistributed population creating new settlement patterns and new limits to urban mobility. Today we confront the phenomenal costs of our urban transportation system-oil shortages, rising auto prices, highway repair costs, transit budget crisis, mass unemployment in the auto industry, and rising environmental and highway safety problems.' Less tangible, but no less real, are the effects upon community life. The division of urban space spurred by ...
The Milken Institute Series on Financial Innovation and Economic Growth, 2004
In the 1980s, the U.S. experienced its worst bank problems since the Great Depression. The proble... more In the 1980s, the U.S. experienced its worst bank problems since the Great Depression. The problems occurred despite an elaborate bank regulatory structure. The obvious conclusion is that the existing structure was not appropriate for fulfilling its assigned responsibilities. Although banking institutions are now in overall good financial condition and bank regulation has been significantly improved, there is still an
This article reviews theoretical and research problems in both ecological and urban political eco... more This article reviews theoretical and research problems in both ecological and urban political economy perspectives on cities. Several specific areas are identified-generic historical processes of the internationalization of the economy, uneven development within and between urban regions, economic concentration, political centralization, changes in family and community organization, and environmental limits to spatial differentiation. The connection between these structural issues and urban policy areas (social welfare policy, housing, transportation, and industrial structure) are discussed.
Financial innovation is the engine driving the financial system toward improved performance in th... more Financial innovation is the engine driving the financial system toward improved performance in the real economy. The conventional view of financial instruments is based upon the categorical distinction between debt and equity, but financial innovations have evolved less as distinct categories than as a range of financial technologies involving characteristics of both, and in the high‐yield market, innovative debt securities have emerged, which have added value by various means. During the US recession and credit crunch of 1974, many companies (especially small and medium‐sized enterprises and emerging firms) learned that capital access was no longer guaranteed on the basis of profits or success. With dramatic changes in the world economy, companies required innovative securities to provide them with the financial freedom necessary to survive and grow, to enhance their flexibility in managing the capital structure of their firms in changing times, and to finance their objectives for ...
The previous chapter discussed the factors that triggered the price collapse of the high‐yield ma... more The previous chapter discussed the factors that triggered the price collapse of the high‐yield market in the USA in 1989 and 1990. This chapter turns to the question of when and how the first movers returned to the market in 1991 and renewed it from then on with an activity that far surpassed high‐yield bond issuance and performance over previous decades. Year‐by‐year data are presented on the recovery for the US market, which is discussed in detail by economic industries and sectors, and by reference to individual companies. Separate analyses are given of high‐yield bonds during the transition years of 1991, 1992, 1993, and 1994. The chapter ends by briefly discussing the developing non‐US issuance market in the 1990s.
The chapter starts by pointing out that a fundamental mismatch exists between the sources of job ... more The chapter starts by pointing out that a fundamental mismatch exists between the sources of job creation and capital formation in the USA, and that US financial history can be read as a long attempt to resolve this. Flow of funds data from the 1950s to the late 1990s reflect the relative contraction of financial institutional sources of capital and the expansion of capital markets. However, an analysis of this structural shift shows that small businesses have participated less than large ones (although they represent over 40% of total assets, debt, and net worth), and they remain disproportionately dependent on banks as their major source of capital. The effect of the recession of the early 1990s on such small firms is discussed in terms of the four sources of regulatory chokes (i.e. overregulation) that have hampered their economic growth: banking regulations, insurance regulations, thrift regulations, and merger regulations. The last part of the chapter discusses the reinvention ...
This short introductory chapter provides a brief analysis of the high‐yield (junk bond) market in... more This short introductory chapter provides a brief analysis of the high‐yield (junk bond) market in the USA in 2001 and 2002, discussing the multitude of influences upon it, including the September 11, 2001 terrorist attacks. It notes that any attempt to compare the impact of these attacks with previous historical events will be flawed because the combination of an act of war committed in the USA at the time of a recession has never before occurred. A table is presented that attempts to sort out the positive and negative effects of individual events and circumstances on the market for high‐yield securities, and a summary is given of the immediate damage to the credit markets in September 2001. It is suggested that there is at least anecdotal evidence of large cash positions sitting on the sidelines globally, so that any recovery could be significant.
This chapter first presents a brief history of the high‐yield securities market in the USA since ... more This chapter first presents a brief history of the high‐yield securities market in the USA since the 1970s. It then discusses the etymology of the term ‘junk bonds’, and goes on to describe critical events in the high‐yield market from the period 1989–1990 – which has often been characterized as the time of the beginning of the end for the market. The next part of the chapter discusses the capital access and high‐yield financial innovations that led to the development of the high‐yield securities market from the late 1970s, giving a comparative breakdown of the distribution of the main uses of high‐yield proceeds in the periods 1983–1989 and 1990–1999, and a year‐by‐year breakdown of the use of proceeds from 1983 to 2000. Last, the junk bond situation in 2000–2002 is contrasted with that in the 1990s, giving comparative year‐by‐year data for the distress ratio, the percentage of Rule 144A (which permits private placements to be freely traded among qualified institutional buyers (QIB...
In this chapter, the issue of at-risk cultural heritage in the Middle East is addressed through t... more In this chapter, the issue of at-risk cultural heritage in the Middle East is addressed through the application of cyber-archaeology tools for data capture and dissemination. Working with an economic model to create a Heritage Asset District in the environs of Jerusalem, virtual reality for personal head-mounted devices and immersive CAVE platforms are used to help create high-value cultural heritage attractions designed to attract visitors to the district, thereby generating economic benefits. In the case study presented here, the district focuses on the Kidron Valley, which has its origin near the Temple Mount in the Old City of Jerusalem, and follows the river flowing eastward through the Judean Desert, where it empties into the Dead Sea. The most prominent cultural heritage site along the wadi (riverbed) is the Mar Saba Greek Orthodox monastery, dating to the fifth century CE. A helium-balloon photographic platform with high-definition photography and Structure from Motion (SfM)...
I n the twentieth century a crisis developed in transportation that coincided with and contribute... more I n the twentieth century a crisis developed in transportation that coincided with and contributed to the crisis of the city. "We shall solve the problems of the city by leaving the city," promised Henry Ford, and current federal policies threaten to make the aoandonment of cities into an object of public policy. Scorned as they may be, cities are inhabited places, and their social and physical decay has consequences that extend well beyond the city limits. Rather than serving existing urban populations, highway transportation redistributed population creating new settlement patterns and new limits to urban mobility. Today we confront the phenomenal costs of our urban transportation system-oil shortages, rising auto prices, highway repair costs, transit budget crisis, mass unemployment in the auto industry, and rising environmental and highway safety problems.' Less tangible, but no less real, are the effects upon community life. The division of urban space spurred by ...
The Milken Institute Series on Financial Innovation and Economic Growth, 2004
In the 1980s, the U.S. experienced its worst bank problems since the Great Depression. The proble... more In the 1980s, the U.S. experienced its worst bank problems since the Great Depression. The problems occurred despite an elaborate bank regulatory structure. The obvious conclusion is that the existing structure was not appropriate for fulfilling its assigned responsibilities. Although banking institutions are now in overall good financial condition and bank regulation has been significantly improved, there is still an
This article reviews theoretical and research problems in both ecological and urban political eco... more This article reviews theoretical and research problems in both ecological and urban political economy perspectives on cities. Several specific areas are identified-generic historical processes of the internationalization of the economy, uneven development within and between urban regions, economic concentration, political centralization, changes in family and community organization, and environmental limits to spatial differentiation. The connection between these structural issues and urban policy areas (social welfare policy, housing, transportation, and industrial structure) are discussed.
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