Hedging private international real estate

The performance of an international real estate investment can be critically affected by currency fluctuations. While survey work suggests large international investors with multi-asset portfolios tend to hedge their overall currency exposure at portfolio level, smaller and specialist investors are more likely to hedge individual investments and face considerable specific risk. This presents particular problems in direct real estate investment due to the lengthy holding period. Prior research investigating the issue relies on ex post portfolio measure, understating the risk faced. This paper examines individual risk using a forward-looking simulation approach to model uncertain cashflow. The results suggest that a US investor can greatly reduce the downside currency risk inherent in UK real estate by using a swap structure – but at the expense of dampening upside potential.

Fixing the currency: analysing the implications for property investment performance

This paper analyses the historic effects of exchange rate movements on returns, risk and diversification of office markets within the Euro zone in order to gain insights into the investment consequences of conversion to a fixed rate currency regime. The data used in the study represents annual office rental growth rates for 22 European cities from nine European Union countries between 1985 and 1996. Relative performance is reported in terms of domestic currency and in terms of deutsche marks. The evidence presented suggests that Euro zone property investors in ‘southern’ countries are now protected from short term jump risk associated with flexible peg currency arrangements and medium/long-term currency volatility. Historically exchange rate movements have produced decreases in returns and increases in volatility. For northern ‘bloc’ cities, the effects of fixing the exchange rate are minimal. For these cities, national exchange rate fluctuations against the deutsche mark have been minor and the resultant implications for property risk and return to non-domestic SCA investors have been negligible. Moreover, although previous research would suggest that the effect of currency volatility is to decrease market correlation, this cannot be observed within the Euro zone.

Effects of short-term pH fluctuations on cadmium, nickel, lead, and zinc availability to ryegrass in a sewage sludge-amended field

In this field experiment, sewage sludge was applied at 0, 5, 10, and 50 t ha(-1), and the availability of Cd, Ni, Pb, and Zn was assessed both by ryegrass uptake and by DTPA extractions. The aim was to investigate the role of important soil parameters, particularly pH, on heavy metal availability. It was found that metal uptake and extractability increased significantly in the 50 t ha(-1) treatment. In the 16th week of the experiment there was a significant, although temporary, increase in DTPA-extractable Cd, Ni, and Zn concentrations. Metal concentrations in ryegrass were also significantly elevated in week 20 compared to the subsequent cuttings. These fluctuations in both DTPA and ryegrass uptake occurred only at 50 t ha(-1) and were probably induced by a sudden pH decrease measured in the same treatment in week 16. This suggests that soils which have received high applications of sewage sludge may be prone to fluctuations in metal availability. (c) 2007 Elsevier Ltd. All rights reserved.

Changes in the extent of glaciers in the Eastern Terskey Alatoo, the Central Tien-Shan, in response to climatic fluctuations in between the end of the 19th and the beginning of the 21st century

Changes in the extent of glaciers and rates of glacier termini retreat in the eastern Terskey-Alatoo Range, the Tien Shan Mountains, Central Asia have been evaluated using the remote sensing techniques. Changes in the extent of 335 glaciers between the end of the Little Ice Age (LIA; mid-19th century), 1990 and 2003 have been estimated through the delineation of glacier outlines and the LIA moraine positions on the Landsat TM and ASTER imagery for 1990 and 2003 respectively. By 2003, the glacier surface area had decreased by 19% of the LIA value, which constitutes a 76 km(2) reduction in glacier surface area. Mapping of 109 glaciers using the 1965 1:25,000 maps revealed that glacier surface area decreased by 12.6% of the 1965 value between 1965 and 2003. Detailed mapping of 10 glaciers using historical maps and aerial photographs from the 1943-1977 period, has enabled glacier extent variations over the 20th century to be identified with a higher temporal resolution. Glacial retreat was slow in the early 20th century but increased considerably between 1943 and 1956 and then again after 1977. The post-1990 period has been marked by the most rapid glacier retreat since the end of the LIA. The observed changes in the extent of glaciers are in line with the observed climatic warming. The regional weather stations have revealed a strong climatic warming during the ablation season since the 1950s at a rate of 0.02-0.03 degrees Ca-1. At the higher elevations in the study area represented by the Tien Shan meteorological station, the summer warming was accompanied by negative anomalies in annual precipitation in the 1990s enhancing glacier retreat. However, trends in precipitation in the post-1997 period cannot be evaluated due to the change in observational practices at this station. Neither station in the study area exhibits significant long-term trends in precipitation. Crown Copyright (C) 2009 Published by Elsevier B.V. All rights reserved.

Morphology, biomass and nutrient status of fine roots of Scots pine (Pinus sylvestris) as influenced by seasonal fluctuations in soil moisture and soil solution chemistry

A field monitoring study was carried out to follow the changes of fine root morphology, biomass and nutrient status in relation to seasonal changes in soil solution chemistry and moisture regime in a mature Scots pine stand on acid soil. Seasonal and yearly fluctuations in soil moisture and soil solution chemistry have been observed. Changes in soil moisture accounted for some of the changes in the soil solution chemistry. The results showed that when natural acidification in the soil occurs with low pH (3.5-4.2) and high aluminium concentration in the soil solution (> 3-10 mg l(-1)), fine root longevity and distribution could be affected. However, fine root growth of Scots pine may not be negatively influenced by adverse soil chemical conditions if soil moisture is not a limiting factor for root growth. In contrast, dry soil conditions increase Scots pine susceptibility to soil acidification and this could significantly reduce fine root growth and increase root mortality. It is therefore important to study seasonal fluctuations of the environmental variables when investigating and modelling cause-effect relationships.

Mesonic fluctuations in a nonlocal Nambu–Jona-Lasinio model

The effects of meson fluctuations are studied in a nonlocal generalization of the Nambu–Jona-Lasinio model, by including terms of next-to-leading order (NLO) in 1/Nc. In the model with only scalar and pseudoscalar interactions NLO contributions to the quark condensate are found to be very small. This is a result of cancellation between virtual mesons and Fock terms, which occurs for the parameter sets of most interest. In the quark self-energy, similar cancellations arise in the tadpole diagrams, although not in other NLO pieces which contribute at the 25% level. The effects on pion properties are also found to be small. NLO contributions from real pi-pi intermediate states increase the sigma meson mass by 30%. In an extended model with vector and axial interactions, there are indications that NLO effects could be larger.

Monetary integration and real estate markets: an investigation of the impact of the introduction of a single currency on real estate performance

This paper assesses the impact of the monetary integration on different types of stock returns in Europe. In order to isolate European factors, the impact of global equity integration and small cap factors are investigated. European countries are sub-divided according to the process of monetary convergence. Analysis shows that national equity indices are strongly influenced by global market movements, with a European stock factor providing additional explanatory power. The global and European factors explain small cap and real estate stocks much less well –suggesting an increased importance of ‘local’ drivers. For real estate, there are notable differences between core and non-core countries. Core European countries exhibit convergence – a convergence to a European rather than a global factor. The non-core countries do not seem to exhibit common trends or movements. For the non-core countries, monetary integration has been associated with increased dispersion of returns, lower correlation and lower explanatory power of a European factor. It is concluded that this may be explained by divergence in underlying macro-economic drivers between core and non-core countries in the post-Euro period.

Analysis of time-related metabolic fluctuations induced by ethionine in the rat

The time-course of metabolic events following response to a model hepatotoxin ethionine (800 mg/kg) was investigated over a 7 day period in rats using high-resolution (1)H NMR spectroscopic analysis of urine and multivariate statistics. Complementary information was obtained by multivariate analysis of (1)H MAS NMR spectra of intact liver and by conventional histopathology and clinical chemistry of blood plasma. (1)H MAS NMR spectra of liver showed toxin-induced lipidosis 24 h postdose consistent with the steatosis observed by histopathology, while hypertaurinuria was suggestive of liver injury. Early biochemical changes in urine included elevation of guanidinoacetate, suggesting impaired methylation reactions. Urinary increases in 5-oxoproline and glycine suggested disruption of the gamma-glutamyl cycle. Signs of ATP depletion together with impairment of the energy metabolism were given from the decreased levels in tricarboxylic acid cycle intermediates, the appearance of ketone bodies in urine, the depletion of hepatic glucose and glycogen, and also hypoglycemia. The observed increase in nicotinuric acid in urine could be an indication of an increase in NAD catabolism, a possible consequence of ATP depletion. Effects on the gut microbiota were suggested by the observed urinary reductions in the microbial metabolites 3-/4-hydroxyphenyl propionic acid, dimethylamine, and tryptamine. At later stages of toxicity, there was evidence of kidney damage, as indicated by the tubular damage observed by histopathology, supported by increased urinary excretion of lactic acid, amino acids, and glucose. These studies have given new insights into mechanisms of ethionine-induced toxicity and show the value of multisystem level data integration in the understanding of experimental models of toxicity or disease.

Commodity currency: an alternative route to currency union

Proposals have been made for a common currency for East Asia, but the countries preparing to participate need to be in a state of economic convergence. We show that at least six countries of East Asia already satisfy this condition. There also needs to be a mechanism by which the new currency relates to other reserve currencies. We demonstrate that a numéraire could be defined solely from the actual worldwide consumption of food and energy per capita, linked to fiat currencies via world market prices. We show that real resource prices are stable in real terms, and likely to remain so. Furthermore, the link from energy prices to food commodity prices is permanent, arising from energy inputs in agriculture, food processing and distribu-tion. Calibration of currency value using a yardstick such as our SI numéraire offers an unbiased measure of the con-sistently stable cost of subsistence in the face of volatile currency exchange rates. This has the advantage that the par-ticipating countries need only agree to currency governance based on a common standards institution, a much less on-erous form of agreement than would be required in the creation of a common central bank.

The resting-state neurovascular coupling relationship: rapid changes in spontaneous neural activity in the somatosensory cortex are associated with haemodynamic fluctuations that resemble stimulus-evoked haemodynamics

Although promise exists for patterns of resting-state blood oxygen level-dependent (BOLD) functional magnetic resonance imaging (fMRI) brain connectivity to be used as biomarkers of early brain pathology, a full understanding of the nature of the relationship between neural activity and spontaneous fMRI BOLD fluctuations is required before such data can be correctly interpreted. To investigate this issue, we combined electrophysiological recordings of rapid changes in multi-laminar local field potentials from the somatosensory cortex of anaesthetized rats with concurrent two-dimensional optical imaging spectroscopy measurements of resting-state haemodynamics that underlie fluctuations in the BOLD fMRI signal. After neural ‘events’ were identified, their time points served to indicate the start of an epoch in the accompanying haemodynamic fluctuations. Multiple epochs for both neural ‘events’ and the accompanying haemodynamic fluctuations were averaged. We found that the averaged epochs of resting-state haemodynamic fluctuations taken after neural ‘events’ closely resembled the temporal profile of stimulus-evoked cortical haemodynamics. Furthermore, we were able to demonstrate that averaged epochs of resting-state haemodynamic fluctuations resembling the temporal profile of stimulus-evoked haemodynamics could also be found after peaks in neural activity filtered into specific electroencephalographic frequency bands (theta, alpha, beta, and gamma). This technique allows investigation of resting-state neurovascular coupling using methodologies that are directly comparable to that developed for investigating stimulus-evoked neurovascular responses.