Riding the South Sea bubble

This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare's Bank, a fledgling West End London banker, knew that a bubble was in progress and nonetheless invested in the stock; it was profitable to "ride the bubble." Using a unique dataset on daily trades, we show that this sophisticated investor was not constrained by institutional factors such as restrictions on short sales or agency problems. Instead, this study demonstrates that predictable investor sentiment can prevent attacks on a bubble; rational investors may only attack when some coordinating event promotes joint action.

With a bang, not a whimper: Pricking Germany's "stock market bubble" in 1927 and the slide into depression

In May 1927, the German central bank intervenedindirectly to reduce lending to equity investors.The crash that followed ended the only stockmarket boom during Germany s relative stabilization 1924-28. This paper examines thefactors that lead to the intervention as well asits consequences. We argue that genuine concernabout the exuberant level of the stock market,in addition to worries about an inflow offoreign funds, tipped the scales in favour ofintervention. The evidence strongly suggeststhat the German central bank under HjalmarSchacht was wrong to be concerned aboutstockprices-there was no bubble. Also, theReichsbank was mistaken in its belief thata fall in the market would reduce theimportance of short-term foreign borrowing,and help to ease conditions in the money market.The misguided intervention had important realeffects. Investment suffered, helping to tipGermany into depression.

Generalized canonical correlation analysis of matrices with different row and column orders

A Method is offered that makes it possible to apply generalized canonicalcorrelations analysis (CANCOR) to two or more matrices of different row and column order. The new method optimizes the generalized canonical correlationanalysis objective by considering only the observed values. This is achieved byemploying selection matrices. We present and discuss fit measures to assessthe quality of the solutions. In a simulation study we assess the performance of our new method and compare it to an existing procedure called GENCOM,proposed by Green and Carroll. We find that our new method outperforms the GENCOM algorithm both with respect to model fit and recovery of the truestructure. Moreover, as our new method does not require any type of iteration itis easier to implement and requires less computation. We illustrate the methodby means of an example concerning the relative positions of the political parties inthe Netherlands based on provincial data.

The dot-com bubble, the Bush deficits and the US current account

Over the past decade the US has experienced widening current account deficits and a steady deterioration of its net foreign asset position. During the second half of the 1990s, this deterioration was fueled by foreign investment in a booming US stock market. During the first half of the 2000s, this deterioration has been fuelled by foreign purchases of rapidly increasing US government debt. A somewhat surprising aspect of the current debate is thatstock market movements and fiscal policy choices have been largely treated as unrelated events. Stock market movements are usually interpreted as reflecting exogenous changes in perceived or real productivity, while budget deficits are usually understood as a mainly political decision. We challenge this view here and develop two alternative interpretations. Both are based on the notion that a bubble (the dot-com bubble) has been driving the stock market, but differ in their assumptions about the interactions between this bubble and fiscal policy (the Bush deficits). The benevolent view holds that a change in investorsentiment led to the collapse of the dot-com bubble and the Bush deficits were a welfare-improving policy response to this event. The cynical view holds instead that the Bush deficits led to the collapse of the dot-com bubble as the new administration tried to appropriate rents from foreign investors. We discuss the implications of each of these views for the future evolution of the US economy and, in particular, its net foreign asset position.

Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

Anomalous Proper-Motions in the Cygnus Super Bubble Region

In an analysis of proper motions of O and B stars contained the Input Catalogue for Hipparcos, we have found a clear deviation from the expected pattern of systematic motions which can be readily identified with the associations Cygnus OB1 and Cygnus OB9, located near de the edge of the Cygnus Superbubble. Teha anomalous motions are directed outwards from the center of the Superbubble, which is coincident with tha association Cygnus OB2. This seems to support the hypothesis of a strong stellar and supernova activity in Cygnus 0B2 giving rise to the Superbubble and, by means of gravitational instabilities in its boundaries, to Cygnus 0B1 and Cygnus OB9. New uvby-beta aperture photometry of selected O and B stars in the area of Cygnus OB1 and Cygnus OB9 is also presented and analyzed in this paper.

Dynamics of a paramagnetic colloidal particle driven on a magnetic-bubble lattice

We present a theoretical study of the recently observed dynamical regimes of paramagnetic colloidal particles externally driven above a regular lattice of magnetic bubbles [P. Tierno, T. H. Johansen, and T. M. Fischer, Phys. Rev. Lett. 99, 038303 (2007)]. An external precessing magnetic field alters the potential generated by the surface of the film in such a way to either drive the particle circularly around one bubble, ballistically through the array, or in triangular orbits on the interstitial regions between the bubbles. In the ballistic regime, we observe different trajectories performed by the particles phase locked with the external driving. Superdiffusive motion, which was experimentally found bridging the localized and delocalized dynamics, emerge only by introducing a certain degree of randomness into the bubbles size distribution.

Response of wheat to additional nitrogen fertilizer application after pig slurry on over-fertilized soils

Pig slurry is a valuable nutrient resource but constitutes a waste disposal problem in areas of high animal density. In the semiarid area of Pla d’Urgell, in the Ebro Valley, North-East Spain, irrigated crops receive large amounts of nutrients in the form of manure and mineral fertilizers. We studied the effect of pig slurry and additional side-dress mineral fertilizers on irrigated wheat, Triticum aestivum L., on a coarse loam soil, with high soil P and K levels. Yields increased by 62.3% when using pig slurry. The application of ammonium sulfate nitrate sidedress did not significantly increase wheat production. The average apparent recoveries were higher for potassium (88.7%) than for nitrogen (51.3%) and phosphorus (36.3%). Greater amounts of soil NO3-N were measured over the four growing seasons, which was consistent with the amount of N applied. Macronutrient and micronutrient uptake was significant higher for pig slurry treatments, but only small differences were found between the pig slurry and pig slurry plus ammonium sulfate nitrate treatments. The unfertilized treatment showed significantly lower soil P, K, Cu and Zn content than pig slurry treatments; 34%, 21%, 34%, and 26% respectively. These findings could be used to develop a nutrient management plan based on knowledge of soil test results and crop nutrient removal. This could help to improve the use of pig slurry and mineral fertilizers on limited available land areas and prevent the accumulation of potentially toxic elements in soils and the export of nutrients through agricultural drainage.

Evidence for the influence of the North Atlantic Oscillation on the total ozone column at northern low latitudes and midlatitudes during winter and summer seasons.

The strong influence of the winter North Atlantic Oscillation (NAO) on the total ozone column (TOC) in the Northern Hemisphere has been reported in a number of previous studies. In this study we show that this influence is not restricted to the winter season but is also significant in summer. Especially interesting effects of the summer NAO (SNAO) on the TOC are observed over the eastern Mediterranean region, where a strongly positive SNAO index is related to the creation of a geopotential height-negative anomaly over Greece with maximum amplitude at 200 hPa. Another anomaly was observed west of the Iberian Peninsula with similar effects on the TOC. Analyzing 26 years of Total Ozone Mapping Spectrometer (TOMS) and Ozone Monitoring Instrument (OMI) data from the equator to midlatitudes (60°) in the Northern Hemisphere, we demonstrate that the SNAO accounts for up to 30% of the TOC variability with a strong latitudinal and longitudinal dependence. Additionally, we obtain significant correlations between the NAO index and the thermal tropopause pressure and also with the geopotential heights at 200 and 500 hPa. Finally, some indirect connections between NAO and the TOC through teleconnections are also discussed.

Effect of compressibility in bubble formation in closed systems

We analyze the stability of small bubbles in a closed system with fixed volume, temperature, and number of molecules. We show that there exists a minimum stable size of a bubble. Thus there exists a range of densities where no stable bubbles are allowed and the system has a homogeneous density which is lower than the coexistence density of the liquid. This becomes possible due to the finite liquid compressibility. Capillary analysis within the developed"modified bubble" model illustrates that the existence of the minimum bubble size is associated to the compressibility and it is not possible when the liquid is strictly incompressible. This finding is expected to have very important implications in cavitation and boiling.

Yield in double cropping system as affected by N fertilization rate with pig slurry in a Catalonia dryland region

Intensive swine production is an important agricultural and economical activity in Europe. The high availability of pig slurry (PS) lead to attractive fertilization strategy to reduce costs, therefore is mainly applied as fertilizer in agricultural systems. The optimization N fertilization in these areas should be taken in into to avoid nitrates losses by lixiviation and to achieve maximum efficiency in crop nutrition. Many studies have shown that PS applications can achieve satisfactory yields in different crops by partially or completely replacing synthetic fertilizers. In addition, for the last years, in Northeast Spain (Catalonia) has been widely extended the double-cropping forage system.