New models of old(?) payment questions

Is private money feasible and desirable? In its absence, is there a central bank policy that partially or fully substitutes for private money? In this paper, some recent modeling ideas about how to address these questioned are reviewed and applied. The main ideas are that people cannot commit to future actions and that their histories are to some extent unknown - are not common knowledge. Under the additional assumption that the private monies issued by diferent people are distinct, a strong recognizability assumption, it is shown that there is a role for private money.

Why do US banks borrow from the Fed? A fresh look at the ‘reluctance’ phenomenon

The role of several theoretical factors in determining the demand of US banks for borrowed reserves from the Fed is empirically investigated. The main objective is to isolate the candidate(s) most likely responsible for the recent observed phenomenon of banks reluctance to borrow from the Fed, particularly since the mid-1980s. The results indicate that the declining number of banks due to mergers and consolidations holds much of the weight for explaining the weakened demand for borrowed reserves since the mid-1980s. Consistent evidence is found suggesting that US banks may have been unlawfully exploiting the discount window service for profit-taking purposes. This finding proves credible and suggests the need for further loan scrutiny at the Federal discount window.

Three Essays in Empirical Asset Pricing

The financial crisis of 2007-2008 led to extraordinary government intervention in firms and markets. The scope and depth of government action rivaled that of the Great Depression. Many traded markets experienced dramatic declines in liquidity leading to the existence of conditions normally assumed to be promptly removed via the actions of profit seeking arbitrageurs. These extreme events motivate the three essays in this work. The first essay seeks and fails to find evidence of investor behavior consistent with the broad 'Too Big To Fail' policies enacted during the crisis by government agents. Only in limited circumstances, where government guarantees such as deposit insurance or U.S. Treasury lending lines already existed, did investors impart a premium to the debt security prices of firms under stress. The second essay introduces the Inflation Indexed Swap Basis (IIS Basis) in examining the large differences between cash and derivative markets based upon future U.S. inflation as measured by the Consumer Price Index (CPI). It reports the consistent positive value of this measure as well as the very large positive values it reached in the fourth quarter of 2008 after Lehman Brothers went bankrupt. It concludes that the IIS Basis continues to exist due to limitations in market liquidity and hedging alternatives. The third essay explores the methodology of performing debt based event studies utilizing credit default swaps (CDS). It provides practical implementation advice to researchers to address limited source data and/or small target firm sample size.

Discount rates in disarray : evidence on flawed goodwill impairment testing

Carlin and Finch, this issue, compare goodwill impairment discount rates used by a sample of large Australian firms with ‘independently’ generated discount rates. Their objective is to empirically determine whether managers opportunistically select goodwill discount rates subsequent to the 2005 introduction of International Financial Reporting Standards (IFRS) in Australia. This is a worthwhile objective given that IFRS introduced an impairment regime, and within this regime, discount rate selection plays a key role in goodwill valuation decisions. It is also timely to consider the goodwill valuation issue. Following the recent downturn in the economy, there is a high probability that many firms will be forced to write down impaired goodwill arising from boom period acquisitions. Hence, evidence of bias in rate selection is likely to be of major concern to investors, policymakers and corporate regulators. Carlin and Finch claim their findings provide evidence of such bias. In this commentary I review the validity of their claims.

Implicit discount rates and fisheries management : is there a relationship?

Fishers are faced with multiple risks, including unpredictability of future catch rates, prices and costs. While the latter are largely beyond the control of fisheries managers, effective fisheries management should reduce uncertainty about future catches. Different management instruments are likely to have different impacts on the risk perception of fishers, and this should manifest itself in their implicit discount rate. Assuming licence and quota values represent the net present value of the flow of expected future profits, then a proxy for the implicit discount rate of vessels in a fishery can be derived by the ratio of the average level of profits to the average licence/quota value. From this, an indication of the risk perception can be derived, assuming higher discount rates reflect higher levels of systematic risk. In this paper, we apply the capital asset pricing model (CAPM) to determine the risk premium implicit in the discount rates for a range of Australian fisheries, and compare this with the set of management instruments in place. We test the assumption that rights based management instruments lower perceptions of risk in fisheries. We find little evidence to support this assumption. although the analysis was based on only limited data.

Sapporo World Window : urban interaction through public and private screens

This paper introduces Sapporo World Window, a screen-based application that is currently under development for the new underway passage at the centre of Sapporo City. There are ten large public screens installed in the space, displaying user-generated videos about various aspects of the city and a real-time map that visualises users’ interaction with the city. The application aims to engage the general public by functioning as a unique ‘point of connection’ for socio-cultural and technological interactions, making the space a lively social place where people can have meaningful experiences of interacting with people and places of Sapporo through mobile phones (keitai) and the public screens in the space. This paper first outlines the contextual background and key concept for the application’s design. Then the paper discusses the user interaction processes, technical specifications, and interface design, followed by the conclusions and outlook.

Theoretical comparison of innovative window daylighting devices for a sub-tropical climate using radiance

Daylighting in tropical and sub-tropical climates presents a unique challenge that is generally not well understood by designers. In a sub-tropical region such as Brisbane, Australia the majority of the year comprises of sunny clear skies with few overcast days and as a consequence windows can easily become sources of overheating and glare. The main strategy in dealing with this issue is extensive shading on windows. However, this in turn prevents daylight penetration into buildings often causing an interior to appear gloomy and dark even though there is more than sufficient daylight available. As a result electric lighting is the main source of light, even during the day. Innovative daylight devices which redirect light from windows offer a potential solution to this issue. These devices can potentially improve daylighting in buildings by increasing the illumination within the environment decreasing the high contrast between the window and work regions and deflecting potentially glare causing sunlight away from the observer. However, the performance of such innovative daylighting devices are generally quantified under overcast skies (i.e. daylight factors) or skies without sun, which are typical of European climates and are misleading when considering these devices for tropical or sub-tropical climates. This study sought to compare four innovative window daylighting devices in RADIANCE; light shelves, laser cut panels, micro-light guides and light redirecting blinds. These devices were simulated in RADIANCE under sub-tropical skies (for Brisbane) within the test case of a typical CBD office space. For each device the quantity of light redirected and its distribution within the space was used as the basis for comparison. In addition, glare analysis on each device was conducted using Weinold and Christoffersons evalglare. The analysis was conducted for selected hours for a day in each season. The majority of buildings that humans will occupy in their lifetime are already constructed, and extensive remodelling of most of these buildings is unlikely. Therefore the most effective way to improve daylighting in the near future will be through the alteration existing window spaces. Thus it will be important to understand the performance of daylighting systems with respect to the climate it is to be used in. This type of analysis is important to determine the applicability of a daylighting strategy so that designers can achieve energy efficiency as well the health benefits of natural daylight.

The waddlia genome: A window into chlamydial biology

Growing evidence suggests that a novel member of the Chlamydiales order, Waddlia chondrophila, is a potential agent of miscarriage in humans and abortion in ruminants. Due to the lack of genetic tools to manipulate chlamydia, genomic analysis is proving to be the most incisive tool in stimulating investigations into the biology of these obligate intracellular bacteria. 454/Roche and Solexa/Illumina technologies were thus used to sequence and assemble de novo the full genome of the first representative of the Waddliaceae family, W. chondrophila. The bacteria possesses a 2′116′312bp chromosome and a 15′593 bp low-copy number plasmid that might integrate into the bacterial chromosome. The Waddlia genome displays numerous repeated sequences indicating different genome dynamics from classical chlamydia which almost completely lack repetitive elements. Moreover, W. chondrophila exhibits many virulence factors also present in classical chlamydia, including a functional type III secretion system, but also a large complement of specific factors for resistance to host or environmental stresses. Large families of outer membrane proteins were identified indicating that these highly immunogenic proteins are not Chlamydiaceae specific and might have been present in their last common ancestor. Enhanced metabolic capability for the synthesis of nucleotides, amino acids, lipids and other co-factors suggests that the common ancestor of the modern Chlamydiales may have been less dependent on their eukaryotic host. The fine-detailed analysis of biosynthetic pathways brings us closer to possibly developing a synthetic medium to grow W. chondrophila, a critical step in the development of genetic tools. As a whole, the availability of the W. chondrophila genome opens new possibilities in Chlamydiales research, providing new insights into the evolution of members of the order Chlamydiales and the biology of the Waddliaceae.

Thermal performance optimization of building aspect ratio and south window size in five cities having different climatic characteristics of Turkey

The aim of the study is to establish optimum building aspect ratios and south window sizes of residential buildings from thermal performance point of view. The effects of 6 different building aspect ratios and eight different south window sizes for each building aspect ratio are analyzed for apartments located at intermediate floors of buildings, by the aid of the computer based thermal analysis program SUNCODE-PC in five cities of Turkey: Erzurum, Ankara, Diyarbakir, Izmir, and Antalya. The results are evaluated in terms of annual energy consumption and the optimum values are driven. Comparison of optimum values and the total energy consumption rates is made among the analyzed cities.