Funding Positions

Investment banks and hedge funds often use TRS contracts to pay for positions in securities that they cannot— for operational, credit, or other reasons—fund using the interbank market or a classic repo. The TRS counterparty that is long the security swaps it with a counterparty that 

FIGURE 10.8 Total Return Swap Used in Capital Structure Arbitrage  

Note that the haircut is the amount of the bond value that is not handed over in the loan proceeds—it acts as a credit protection to the provider of funds in the event that the bond, which is in effect the collateral for the loan, drops in value during the term of the swap. For ease of 

FIGURE 10.9 Using a Total Return Swap to Fund a Security 

Asset 50 million face value of an A-rated asset-backed security 

FIGURE 10.7 Usin a Total Return Swap to Fund a Ssnurify Party A Asset seller, a hedge fund Party B Funds provider, an investment bank 

Floating rate paid by the asset seller LIBOR plus 35 basis points 

Assume that, at swap maturity, the stock has risen in price to 99-70, making its market value 49,850,000. The investment bank would therefore owe the hedge fund a performance payment of 100,000. The hedge fund, meanwhile, owes the investment bank 27,690.71, which is 1.43125 percent interest on 49,750,000 for fourteen days. The bank pays the fund a net payment of 72,309. If there was a coupon payment during the term, it would be paid by the investment bank as part of the performance payment to the hedge fund. 

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Keith approached me about working in my laboratory for the summer and as he already had an undergraduate degree, he was not eligible for any summer scholarships. I looked over his transcript and noticed that he was a terrific student and had done particularly well in my course. His alternative was to go back to the Navy where he would be on the high seas navigating huge boats. In spite of some concerns about my finances, I offered him a fully funded position and for both of the rest was, as they, history. 

The field may enter into an economic decline when either income is falling (production decline) or costs are rising, and in many cases both are happening. Whilst there may be scope for further investment in a field in economic decline, it should not tie up funds that can be used more effectively in new projects. A mature development must continue to generate a positive cashflow and compete with other projects for funds. The options that are discussed in this section give some idea of the alternatives that may be available to manage the inevitable process of economic decline, and to extend reservoir and facility life. 

This segmented mirror telescope was quite successful and due to its success, funds were acquired to make a second Keck telescope, and it was positioned to allow the two Keck telescopes to be used for interferometry as well as for individual telescope observing. 

This work has benefited from enlightening discussions with Prof. B.T. Pickup, Prof. J. Delhalle, and Dr. C. Barbier. B.C. would like to take this opportunity to thank the Belgian National Fund for Scientific Research for his successive Research Assistant, Senior Research Assistant and Research Associate positions. 

In fact, studies funded by drug companies usually show positive effects of their products and worse results for the products of their competitors, whereas studies that have been independently sponsored show results that are midway between these two extremes. A team of researchers at the Beth Israel Medical Center in New York have examined the outcome of clinical trials as a function of who had sponsored them. They found that approximately 75 per cent of drug-company studies showed favourable results for their own drugs, but only 25 per cent of them showed favourable results for the product of a competing... 

Fig. 1. Comparisons of amino add compositions of ordered protein and disordered protein. (Top) Amino acid compositions of three disordered datasets. (Middle) Amino acid compositions of three ordered datasets. (Bottom) Compositions of disordered datasets relative to the Globular 3-D dataset (from Romero et al., Proteins Struct., Fund., Gen. 42, 38-48, copyright 2001. Reprinted by permission of Wiley-Liss, Inc., a subsidiary of John Wiley Sons, Inc.). The ordinates are (% amino acid in disordered dataset — % amino acid in Globular 3-D)/(% amino acid in Globular 3-D) = (D —0)/0. Negative values indicate that the disordered database has less than the ordered, positive indicates more than the ordered. Error bars are one standard deviation.

For Nell, this approach closely resembles the first of Marx s solutions in Capital, volume 2, to the problem of establishing where the money comes from to service the gap between the amount advanced by capitalists and the amount M they receive as income.2 As we saw in Chapter 3, Marx addresses this issue by positing that capitalists advance the amount M -M in addition to M. Under the Kalecki Principle, M —M is the amount of money cast into circulation by capitalists in order to realize profits. Ignoring for simplicity the role of capitalist consumption, this amount is required to purchase additional quantities of capital. Hence, capitalists advance the whole of M. On this view, theoretically, it is correct to speak of M becoming M, but in practice there is no initial sum of money, M, followed later by a larger sum, M there is only M (ibid. 207). In the single swap approach this advance of money is sufficient to fund total income in one run of the monetary circuit. 

As discussed earlier, in relation to the single swap approach, it may also be posited that capitalists advance the amount M —M required to purchase the total increment of capital. In addition to funding the production of this capital increment, the monetary advance allows the realization of the volume of surplus value required for its production. Capitalists earn a net volume of profits (surplus value) that is driven by increments dC = dC, + dC2 and dV =dV, + dV2 of constant and variable capital respectively. Ignoring for simplicity the role of capitalist consumption, the total volume of surplus value P = dV + dC is driven by capitalist requirements for new constant and variable capital. 

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