Cholesterol reduction using manufactured foods high in monounsaturated fatty acids: a randomized crossover study

In two separate studies, the cholesterol-lowering efficacy of a diet high in monounsaturated fatty acids (MUFA) was evaluated by means of a randomized crossover trial. In both studies subjects were randomized to receive either a high-MUFA diet or the control diet first, which they followed for a period of 8 weeks; following a washout period of 4–6 weeks they were transferred onto the opposing diet for a further period of 8 weeks. In one study subjects were healthy middle-aged men (n 30), and in the other they were young men (n 23) with a family history of CHD recruited from two centres (Guildford and Dublin). The two studies were conducted over the same time period using identical foods and study designs. Subjects consumed 38% energy as fat, with 18% energy as MUFA and 10% as saturated fatty acids (MUFA diet), or 13% energy as MUFA and 16% as saturated fatty acids (control diet). The polyunsaturated fatty acid content of each diet was 7%. The diets were achieved by providing subjects with manufactured foods such as spreads, ‘ready meals’, biscuits, puddings and breads, which, apart from their fatty acid compositions, were identical for both diets. Subjects were blind to which of the diets they were following on both arms of the study. Weight changes on the diets were less than 1 kg. In the groups combined (n 53) mean total and LDL-cholesterol levels were significantly lower at the end of the MUFA diet than the control diet by 0×29 (SD 0×61) mmol/l (P,0×001) and 0×38 (SD 0×64) mmol/l (P, 0×0001) respectively. In middle-aged men these differences were due to a mean reduction in LDL-cholesterol of ¹11 (SD 12) % on the MUFA diet with no change on the control diet (¹1×1 (SD 10) %). In young men the differences were due to an increase in LDL-cholesterol concentration on the control diet of þ6×2 (SD 13) % and a decrease on the MUFA diet of ¹7×8 (SD 20) %. Differences in the responses of middle-aged and young men to the two diets did not appear to be due to differences in their habitual baseline diets which were generally similar, but appeared to reflect the lower baseline cholesterol concentrations in the younger men. There was a moderately strong and statistically significant inverse correlation between the change in LDLcholesterol concentration on each diet and the baseline fasting LDL-cholesterol concentration (r¹0×49; P,0×0005). In conclusion, diets in which saturated fat is partially replaced by MUFA can achieve significant reductions in total and LDL-cholesterol concentrations, even when total fat and energy intakes are maintained. The dietary approach used to alter fatty acid intakes would be appropriate for achieving reductions in saturated fat intakes in whole populations.

Substitution of dietary monounsaturated fatty acids for saturated fatty acids in a free-living population: a feasibility study

The fatty acid composition of the diet of seven free-living subjects (five men and two women) aged 41–56 years was altered for 1 month. The aim was to increase the intake of monounsaturated fatty acids (MUFAs) from subjects current habitual levels of 12% dietary energy to a target intake of 18% dietary energy, and to decrease saturated fatty acid (SFA) from habitual levels of 16% dietary energy to target levels of 10% dietary energy. The change in fatty acid intake was achieved by supplying volunteers with foods prepared using MUFA-containing spreads or olive oil (ready meals, sweet biscuits and cakes) and also by supplying spreads, cooking oil and MUFA-enriched milk for domestic use. Body weight and plasma total cholesterol measurements were made at baseline and at 2 and 4 weeks on the diet as an aid to maintaining subject compliance. MUFA consumption was significantly increased from 12% dietary energy to 16% dietary energy (P<0.01), and SFA intake was reduced from 16% dietary energy to 6% dietary energy (P<0.01) during the 4-week intervention. The diet failed to achieve the target increase in MUFA but exceeded the target reduction in SFA. This was due to the fact that subjects reduced their total fat intake from a mean habitual level of 38% dietary energy to a mean level of 30% dietary energy. During the dietary period, mean plasma cholesterol levels were lower at 2 weeks (P<0.01) and at 4 weeks (P<0.01) than the baseline, with a mean reduction of 20% over the dietary period. This study demonstrates the difficulty of achieving increased MUFA intakes (by SFA substitution) in free-living populations when only a limited range of fatty-acid modified food products are provided to volunteers.

Detecting intraday periodicities with application to high frequency exchange rates

Many recent papers have documented periodicities in returns, return volatility, bid–ask spreads and trading volume, in both equity and foreign exchange markets. We propose and employ a new test for detecting subtle periodicities in time series data based on a signal coherence function. The technique is applied to a set of seven half-hourly exchange rate series. Overall, we find the signal coherence to be maximal at the 8-h and 12-h frequencies. Retaining only the most coherent frequencies for each series, we implement a trading rule that is based on these observed periodicities. Our results demonstrate in all cases except one that, in gross terms, the rules can generate returns that are considerably greater than those of a buy-and-hold strategy, although they cannot retain their profitability net of transactions costs. We conjecture that this methodology could constitute an important tool for financial market researchers which will enable them to detect, quantify and rank the various periodic components in financial data better.

Back from beyond the bid-ask spread: perspectives on liquidity

Research into the topic of liquidity has greatly benefited from the availability of data. Although bid-ask spreads were inaccessible to researchers, Roll (1984) provided a conceptual model that estimated the effective bid-ask prices from regular time series data, recorded on a daily or longer interval. Later data availability improved and researchers were able to address questions regarding the factors that influenced the spreads and the relationship between spreads and risk, return and liquidity. More recently transaction data have been used to measure the effective spread and researchers have been able to refine the concepts of liquidity to include the impact of transactions on price movements (Clayton and McKinnon, 2000) on a trade-by-trade analysis. This paper aims to use techniques that combine elements from all three approaches and, by studying US data over a relatively long time period, to throw light on earlier research as well as to reveal the changes in liquidity over the period controlling for extraneous factors such as market, age and size of REIT. It also reveals some comparable results for the UK market over the same period.

Back from beyond bid-ask spread: estimating liquidity in international markets

Research on the topic of liquidity has greatly benefited from the improved availability of data. Researchers have addressed questions regarding the factors that influence bid-ask spreads and the relationship between spreads and risk, return and liquidity. Intra-day data have been used to measure the effective spread and researchers have been able to refine the concepts of liquidity to include the price impact of transactions on a trade-by-trade analysis. The growth in the creation of tax-transparent securities has greatly enhanced the visibility of securitized real estate, and has naturally led to the question of whether the increased visibility of real estate has caused market liquidity to change. Although the growth in the public market for securitized real estate has occurred in international markets, it has not been accompanied by universal publication of transaction data. Therefore this paper develops an aggregate daily data-based test for liquidity and applies the test to US data in order to check for consistency with the results of prior intra-day analysis. If the two approaches produce similar results, we can apply the same technique to markets in which less detailed data are available and offer conclusions on the liquidity of a wider set of markets.

European CMBS pricing: bond, mortgage and real estate characteristics

The recent global economic crisis is often associated with the development and pricing of mortgage-backed securities (i.e. MBSs) and underlying products (i.e. sub-prime mortgages). This work uses a rich database of MBS issues and represents the first attempt to price commercial MBSs (i.e. CMBSs) in the European market. Our results are consistent with research carried out in the US market and we find that bond-, mortgage-, real estate-related and multinational characteristics show different degrees of significance in explaining European CMBS spreads at issuance. Multiple linear regression analysis using a databank of CMBSs issued between 1997 and 2007 indicates a strong relationship with bond-related factors, followed by real estate and mortgage market conditions. We also find that multinational factors are significant, with country of issuance, collateral location and access to more liquid markets all being important in explaining the cost of secured funding for real estate companies. As floater coupon tranches tend to be riskier and exhibit higher spreads, we also estimate a model using this sub-set of data and results hold, hence reinforcing our findings. Finally, we estimate our model for both tranches A and B and find that real estate factors become relatively more important for the riskier investment products.

SATgene dietary model to implement diets of differing fat composition in prospectively genotyped groups (apoE) using commercially available foods

esponse to dietary fat manipulation is highly heterogeneous, yet generic population-based recommendations aimed at reducing the burden of CVD are given. The APOE epsilon genotype has been proposed to be an important determinant of this response. The present study reports on the dietary strategy employed in the SATgenɛ (SATurated fat and gene APOE) study, to assess the impact of altered fat content and composition on the blood lipid profile according to the APOE genotype. A flexible dietary exchange model was developed to implement three isoenergetic diets: a low-fat (LF) diet (target composition: 24 % of energy (%E) as fat, 8 %E SFA and 59 %E carbohydrate), a high-saturated fat (HSF) diet (38 %E fat, 18 %E SFA and 45 %E carbohydrate) and a HSF-DHA diet (HSF diet with 3 g DHA/d). Free-living participants (n 88; n 44 E3/E3 and n 44 E3/E4) followed the diets in a sequential design for 8 weeks, each using commercially available spreads, oils and snacks with specific fatty acid profiles. Dietary compositional targets were broadly met with significantly higher total fat (42·8 %E and 41·0 %E v. 25·1 %E, P ≤ 0·0011) and SFA (19·3 %E and 18·6 %E v. 8·33 %E, P ≤ 0·0011) intakes during the HSF and HSF-DHA diets compared with the LF diet, in addition to significantly higher DHA intake during the HSF-DHA diet (P ≤ 0·0011). Plasma phospholipid fatty acid analysis revealed a 2-fold increase in the proportion of DHA after consumption of the HSF-DHA diet for 8 weeks, which was independent of the APOE genotype. In summary, the dietary strategy was successfully implemented in a free-living population resulting in well-tolerated diets which broadly met the dietary targets set.

Permanent trading impacts and bond yields

We analyze four years of transaction data for euro-area sovereign bonds traded on the MTS electronic platforms. In order to measure the informational content of trading activity, we estimate the permanent price response to trades. We find not only strong evidence of information asymmetry in sovereign bond markets, but we also show the relevance of information asymmetry in explaining the cross-sectional variations of bond yields across a wide range of bond maturities and countries. Our results confirm that trades of more recently issued bonds and longer maturity bonds have a greater permanent effect on prices. We compare the price impact of trades for bonds across different maturity categories and find that trades of French and German bonds have the highest long-term price impact in the short maturity class whereas trades of German bonds have the highest permanent price impacts in the long maturity class. More importantly, we study the cross-section of bond yields and find that after controlling for conventional factors, investors demand higher yields for bonds with larger permanent trading impact. Interestingly, when investors face increased market uncertainty, they require even higher compensation for information asymmetry.

The credit relationship between Henry III and merchants of Douai and Ypres, 1247-70

This article looks at an important but neglected aspect of medieval sovereign debt, namely ‘accounts payable’ owed by the Crown to merchants and employees. It focuses on the unusually well-documented relationship between Henry III, King of England between 1216 and 1272, and Flemish merchants from the towns of Douai and Ypres, who provided cloth on credit to the royal wardrobe. From the surviving royal documents, we reconstruct the credit advanced to the royal wardrobe by the merchants of Ypres and Douai for each year between 1247 and 1270, together with the king's repayment history. The interactions between the king and the merchants are then analysed. The insights from this analysis are applied to the historical data to explain the trading decisions made by the merchants during this period, as well as why the strategies of the Yprois sometimes differed from those of the Douaissiens.

Risk premia in covered bond markets

The authors empirically explore risk premia in mortgage covered bond markets. Using a large panel dataset of covered bond asset swap spreads, they study the impact of different legal and economic environments. Conducting an in-depth analysis of this market, the authors find significant but small differences between countries during normal market periods. However, these differences are much stronger during times of economic crisis. Moreover, they find that developments in the real estate market are of relatively little importance during stable market periods. During economic distress, however, they are of high importance for explaining risk premia in covered bond markets

The (de)merits of minimum-variance hedging: application to the crack spread

We study the empirical performance of the classical minimum-variance hedging strategy, comparing several econometric models for estimating hedge ratios of crude oil, gasoline and heating oil crack spreads. Given the great variability and large jumps in both spot and futures prices, considerable care is required when processing the relevant data and accounting for the costs of maintaining and re-balancing the hedge position. We find that the variance reduction produced by all models is statistically and economically indistinguishable from the one-for-one “naïve” hedge. However, minimum-variance hedging models, especially those based on GARCH, generate much greater margin and transaction costs than the naïve hedge. Therefore we encourage hedgers to use a naïve hedging strategy on the crack spread bundles now offered by the exchange; this strategy is the cheapest and easiest to implement. Our conclusion contradicts the majority of the existing literature, which favours the implementation of GARCH-based hedging strategies.

Credit risk in covered bonds

Covered bonds are a promising alternative for prime mortgage securitization. In this paper, we explore risk premia in the covered bond market and particularly investigate whether and how credit risk is priced. In extant literature, yield spreads between high-quality covered bonds and government bonds are often interpreted as pure liquidity premia. In contrast, we show that although liquidity is important, it is not the exclusive risk factor. Using a hand-collected data set of cover pool information, we find that the credit quality of the cover assets is an important determinant of covered bond yield spreads. This effect is particularly strong in times of financial turmoil and has a significant influence on the issuer's refinancing cost.

House price dynamics and their reaction to macroeconomic changes

This article applies a three-regime Markov switching model to investigate the impact of the macroeconomy on the dynamics of the residential real estate market in the US. Focusing on the period between 1960 and 2011, the methodology implemented allows for a clearer understanding of the drivers of the real estate market in “boom”, “steady-state” and “crash” regimes. Our results show that the sensitivity of the real estate market to economic changes is regime-dependent. The paper then proceeds to examine whether policymakers are able to influence a regime switch away from the crash regime. We find that a decrease in interest rate spreads could be an effective catalyst to precipitate such a change of state.

Unwritten law in Hobbesian political thought

In Hobbesian terminology, ‘unwritten laws’ are natural laws enforced within a polity, by a non-sovereign judge, without some previous public promulgation. This article discusses the idea in the light of successive Hobbesian accounts of ‘law’ and ‘obligation’. Between De Cive and Leviathan, Hobbes dropped the idea that natural law is strictly speaking law, but he continued to believe unwritten laws must form a part of any legal system. He was unable to explain how such a law could claim a legal status. His loyalty to the notion, in spite of all the trouble that it caused, is a sign of his belief that moral knowledge is readily accessible to all.

Microstructure of the Euro-area government bond market

This chapter highlights similarities and differences of equity and fixed- income markets and provides an overview of the characteristics of European government bond market trading and liquidity. Most existing studies focus on the U.S. market. This chapter presents the institutional details of the MTS market, which is the largest European electronic platform for trading government, quasi-government, asset- backed, and corporate fixed- income securities. It reviews the main features of high- frequency fixed- income data and the methods for measuring market liquidity. Finally, the chapter shows how liquidity differs across European countries, how liquidity varies with the structure of the market, and how liquidity has changed during the recent liquidity and sovereign crises.