A Lender of Last Resort (LLR) is an institution, usually a country's Central Bank (like the Federal Reserve in the United States), that offers loans to banks or other organizations that are having financial difficulties or that are near a collapse or a bankruptcy. Generally, LLRs borrow money to those companies or financial institutions whose … Continue reading What is a Lender of Last Resort?
Donald Trump conducted an interview on May 4 with the Economist. Here follows the accurate transcription: [talking about his tax plan] But beyond that it’s OK if the tax plan increases the deficit? It is OK, because it won’t increase it for long. You may have two years where you’ll…you understand the expression “prime the … Continue reading Donald Trump: “you understand the expression prime the pump?”
Dividends are the part of a company's earnings directly distributed to its shareholders. Their distribution and quantity is decided by the board of directors and approved by the assembly of the shareholders and they can be issued as cash payments (the most common case), additional shares or other types of assets. Dividends can be structured as to be distributed as a periodical ongoing cash flow … Continue reading What is a dividend?
John Maynard Keynes (1883-1946) was a famous British economist, mainly known for his book "The General Theory of Employment, Interest and Money", published in 1936, and for being the father of Keynesian Economics. In particular, Keynes was a strong advocate of full employment and government intervention in order to stop economic recessions: in his opinion, absolutely … Continue reading John Maynard Keynes
The intrinsic value of a share is the actual and correct value of a stock, based on the fundamentals of its issuing company. Besides the fundamentals of the firm, which are the numerical values written in its financial statements, the intrinsic value includes in its calculation also other aspects of the business, both tangible (for example, … Continue reading What is the intrinsic value of a share?
A share (or stock) is a security that gives the buyer part of the ownership of the issuing company. Moreover, a the owner of a share can also have the right to claim a part of the earning gained by the enterprise, which might be distributed among shareholders as dividends. There are two types of shares: common and preferred. The first ones usually allow … Continue reading What is a share?
A financial bubble is an economic period in which the prices of particular types of assets increase in an exaggerated way, strongly exceeding their intrinsic value, only to contract later, when the bubble burst. It is usually originated by an exuberant bullish market and it ends when no more investors or speculators are willing to … Continue reading What is a financial bubble?