The effect of Ponzi schemes on crime: Evidence from the colombian case

This paper estimates the impact of a massive negative income shock led by the simultaneous crash down of several Ponzi schemes (also known as financial ``pyramids"") in Colombia on crime rates at the municipal level. Using novel data on the spatial incidence of the latest wave of Colombian pyramids and their crash down date, I estimate difference-in-differences models with both monthly and yearly frequency. I find that the negative income shock of the pyramids" crash down differentially exacerbates crime in affected municipalities compared to those with no presence of Ponzi schemes. This is true for minor offenses like commercial theft or residential burglary, but not for major crimes as murder or terrorism.

Economic shocks and crime: evidence from the crash of ponzi schemes

In November 2008, Colombian authorities dismantled a network of Ponzi schemes, making hundreds of thousands of investors lose tens of millions of dollars throughout the country. Using original data on the geographical incidence of the Ponzi schemes, this paper estimates the impact of their break down on crime. We find that the crash of Ponzi schemes differentially exacerbated crime in affected districts. Confirming the intuition of the standard economic model of crime, this effect is only present in places with relatively weak judicial and law enforcement institutions, and with little access to consumption smoothing mechanisms such as microcredit. In addition, we show that, with the exception of economically-motivated felonies such as robbery, violent crime is not affected by the negative shock.

Collateral avoids Ponzi schemes in incomplete markets

Without introducing neither debt constraints nor transversality conditions to avoid the possibility of Ponzi schemes, we show existence of equilibrium in an incomplete markets economy with a collateral structure.

On Ponzi schemes in infinite horizon collateralized economies with default penalties

Araujo, Páscoa and Torres-Martínez (2002) showed that, without imposing any debt constraint, Ponzi schemes are ruled out in infinite horizon economies with limited commitment when collateral is the only mechanism that partially secures loans. Páscoa and Seghir (2009) presented two examples in which they argued that Ponzi schemes may reappear if, additionally to the seizure of the collateral, there are sufficiently harsh default penalties assessed (directly in terms of utility) against the defaulters. Moreover, they claimed that if default penalties are moderate then Ponzi schemes are ruled out and existence of a competitive equilibrium is restored. This paper questions the validity of the claims made in Páscoa and Seghir (2009). First, we show that it is not true that harsh default penalties lead to Ponzi schemes in the examples they have proposed. A competitive equilibrium with no trade can be supported due to unduly pessimistic expectations on asset deliveries. We subsequently refine the equilibrium concept in the spirit of Dubey, Geanakoplos and Shubik (2005) in order to rule out spurious inactivity on asset markets due to irrational expectations. Our second contribution is to provide a specific example of an economy with moderate default penalties in which Ponzi schemes reappear when overpessimistic beliefs on asset deliveries are ruled out. Our finding shows that, contrary to what is claimed by Páscoa and Seghir (2009), moderate default penalties do not always prevent agents to run a Ponzi scheme.

Caraterização e identificação de esquemas Ponzi: Casos Chales Ponzi, Bernard Madoff e Dona Branca

Mestrado em Auditoria

Collateral, default penalties and infinite horizon equilibrium

Pascoa and Seghir (2009) noticed that when collateralized promises become subject to utility penalties on default, Ponzi schemes may occur. However, equilibrium exists in some interesting cases. Under low penalties, equilibrium exists if the collateral does not yield utility (for example, when it is a productive asset or a security). Equilibrium exists also under more severe penalties and collateral utility gains, when the promise or the collateral are nominal assets and the margin requirements are endogenous: relative inflation rates and margin coefficients can make the income effects dominate the penalty effects. An equilibrium refinement avoids no-trade equilibria with unduly repayment beliefs. Our refinement differs from the one used by Dubey, Geanakoplos and Shubik (2005) as it does not eliminate no trade equilibria whose low delivery rates are consistent with the propensity to default of agents that are on the verge of selling.

Collateral, default penalties and almost finite-time solvency

We argue that it is possible to adapt the approach of imposing restrictions on available plans through finitely effective debt constraints, introduced by Levine and Zame (1996), to encompass models with default and collateral. Along this line, we introduce in the setting of Araujo, Páscoa and Torres-Martínez (2002) and Páscoa and Seghir (2008) the concept of almost finite-time solvency. We show that the conditions imposed in these two papers to rule out Ponzi schemes implicitly restrict actions to be almost finite-time solvent. We define the notion of equilibrium with almost finite-time solvency and look on sufficient conditions for its existence. Assuming a mild assumption on default penalties, namely that agents are myopic with respect to default penalties, we prove that existence is guaranteed (and Ponzi schemes are ruled out) when actions are restricted to be almost finite-time solvent. The proof is very simple and intuitive. In particular, the main existence results in Araujo et al. (2002) and Páscoa and Seghir (2008) are simple corollaries of our existence result.

Competitive equilibria in infinite-horizon collateralized economies with default penalties

Araújo, Páscoa and Torres-Martinez (2002) have shown that, without imposing either debt constraints or transversality conditions, Ponzi schemes are ruled out in infinite horizon economies with default when collateral is the only mechanism that partially secures loans. Páscoa and Seghir (2008) subsequently show that Ponzi schemes may reappear if, additionally to the seizure of the collateral, there are sufficiently harsh default penalties assessed (directly in terms of utility) against the defaulters. They also claim that if default penalties are moderate then Ponzi schemes are ruled out and existence of a competitive equilibrium is ensured. The objective of this paper is two fold. First, contrary to what is claimed by Páscoa and Seghir (2008), we show that moderate default penalties do not always prevent agents to run a Ponzi scheme. Second, we provide an alternative condition on default penalties that is sufficient to rule out Ponzi schemes and ensure the existence of a competitive equilibrium.

Endogenous debt constraints in collateralized economies with default penalties

In infinite horizon financial markets economies, competitive equilibria fail to exist if one does not impose restrictions on agents' trades that rule out Ponzi schemes. When there is limited commitment and collateral repossession is the unique default punishment, Araujo, Páscoa and Torres-Martínez (2002) proved that Ponzi schemes are ruled out without imposing any exogenous/endogenous debt constraints on agents' trades. Recently Páscoa and Seghir (2009) have shown that this positive result is not robust to the presence of additional default punishments. They provide several examples showing that, in the absence of debt constraints, harsh default penalties may induce agents to run Ponzi schemes that jeopardize equilibrium existence. The objective of this paper is to close a theoretical gap in the literature by identifying endogenous borrowing constraints that rule out Ponzi schemes and ensure existence of equilibria in a model with limited commitment and (possible) default. We appropriately modify the definition of finitely effective debt constraints, introduced by Levine and Zame (1996) (see also Levine and Zame (2002)), to encompass models with limited commitment, default penalties and collateral. Along this line, we introduce in the setting of Araujo, Páscoa and Torres-Martínez (2002), Kubler and Schmedders (2003) and Páscoa and Seghir (2009) the concept of actions with finite equivalent payoffs. We show that, independently of the level of default penalties, restricting plans to have finite equivalent payoffs rules out Ponzi schemes and guarantees the existence of an equilibrium that is compatible with the minimal ability to borrow and lend that we expect in our model. An interesting feature of our debt constraints is that they give rise to budget sets that coincide with the standard budget sets of economies having a collateral structure but no penalties (as defined in Araujo, Páscoa and Torres-Martínez (2002)). This illustrates the hidden relation between finitely effective debt constraints and collateral requirements.

Estimating losses in teleportation schemes using the phenomenological operator approach to dissipation in cavity quantum electrodynamics

In this paper, we estimate the losses during teleportation processes requiring either two high-Q cavities or a single bimodal cavity. The estimates were carried out using the phenomenological operator approach introduced by de Almeida et al. [Phys. Rev. A 62, 033815 (2000)].

HORMONAL RESPONSES TO DIFFERENT RESISTANCE EXERCISE SCHEMES OF SIMILAR TOTAL VOLUME

Uchida, MC, Crewther, BT, Ugrinowitsch, C, Bacurau, RFP, Moriscot, AS, and Aoki, MS. J Strength Cond Res 23(7): 2003-2008, 2009-This study assessed the effect of different resistance exercise scheme (RES) designs of similar total of load lifted on the responses of testosterone, cortisol, and creatine kinase (CK). Twenty-seven healthy males performed 1 of 4 bench press workouts described by the 1 repetition maximum (1RM) load: 4 sets of maximum repetitions at 50%-1RM (50%-1RM RES), 5 sets of maximum repetitions at 75%-1RM (75%-1RM RES), 10 sets of maximum repetitions at 90%-1RM (90%1RM RES), or 8 sets of maximum repetitions at 110%-1RM (110%-1RM RES). Each RES was equated by the total volume of load lifted (repetitions x sets x load). Blood samples, collected pre-exercise (Pre) and post-exercise (Post) at 1 and 24 hours (24 h), were analyzed for total and free testosterone, total cortisol, and CK. In general, testosterone and cortisol showed little change within or between the different RES (p > 0.05), possibly because of the relatively low volume lifted and/ or the small muscle mass activated by the bench press exercise. Cortisol was elevated after the 75%-1RM RES at the Post sample, with this response also exceeding the other RES (p < 0.05). The 24 h CK response was also elevated after the 75%-1RM RES (p < 0.05), thereby suggesting greater training strain for the same volume of load. These results confirm previous recommendations regarding the prescription of resistance exercise and the importance of total volume as a stimulus for activating the endocrine system and achieving long-term adaptation.

SALIVARY HORMONE AND IMMUNE RESPONSES TO THREE RESISTANCE EXERCISE SCHEMES IN ELITE FEMALE ATHLETES

Nunes, JA, Crewther, BT, Ugrinowitsch, C, Tricoli, V, Viveiros, L, de Rose Jr, D, and Aoki, MS. Salivary hormone and immune responses to three resistance exercise schemes in elite female athletes J Strength Cond Res 25(8): 2322-2327, 2011-This study examined the salivary hormone and immune responses of elite female athletes to 3 different resistance exercise schemes. Fourteen female basketball players each performed an endurance scheme (ES-4 sets of 12 reps, 60% of 1 repetition maximum (1RM) load, 1-minute rest periods), a strength-hypertrophy scheme (SHS-1 set of 5RM, 1 set of 4RM, 1 set of 3RM, 1 set of 2RM, and 1set of 1RM with 3-minute rest periods, followed by 3 sets of 10RM with 2-minute rest periods) and a power scheme (PS-3 sets of 10 reps, 50% 1RM load, 3-minute rest periods) using the same exercises (bench press, squat, and biceps curl). Saliva samples were collected at 07:30 hours, pre-exercise (Pre) at 09:30 hours, postexercise (Post), and at 17:30 hours. Matching samples were also taken on a nonexercising control day. The samples were analyzed for testosterone, cortisol (C), and immunoglobulin A concentrations. The total volume of load lifted differed among the 3 schemes (SHS > ES > PS, p < 0.05). Postexercise C concentrations increased after all schemes, compared to control values (p < 0.05). In the SHS, the postexercise C response was also greater than pre-exercise data (p < 0.05). The current findings confirm that high-volume resistance exercise schemes can stimulate greater C secretion because of higher metabolic demand. In terms of practical applications, acute changes in C may be used to evaluate the metabolic demands of different resistance exercise schemes, or as a tool for monitoring training strain.

Online Mammographic Images Database for Development and Comparison of CAD Schemes

Considering the difficulties in finding good-quality images for the development and test of computer-aided diagnosis (CAD), this paper presents a public online mammographic images database free for all interested viewers and aimed to help develop and evaluate CAD schemes. The digitalization of the mammographic images is made with suitable contrast and spatial resolution for processing purposes. The broad recuperation system allows the user to search for different images, exams, or patient characteristics. Comparison with other databases currently available has shown that the presented database has a sufficient number of images, is of high quality, and is the only one to include a functional search system.

A Geometric Approach for Turbo Decoding of Reed-Solomon Codes in QAM Modulation Schemes

This work studies the turbo decoding of Reed-Solomon codes in QAM modulation schemes for additive white Gaussian noise channels (AWGN) by using a geometric approach. Considering the relations between the Galois field elements of the Reed-Solomon code and the symbols combined with their geometric dispositions in the QAM constellation, a turbo decoding algorithm, based on the work of Chase and Pyndiah, is developed. Simulation results show that the performance achieved is similar to the one obtained with the pragmatic approach with binary decomposition and analysis.