Random Notes From Class

real assets are such that one can stake a claim to it

Scarce loan-able funds are also known as capital

privatize profits and socialize losses

if i drive a pickup truck to haul cleaning equipment, it is called a capital good, but if you drive it to be macho, it is a consumer good

Liquidity - ease to convert without significant loss in value

senate and house are the only ones that can actually spend money

whatever the president wants to spend money on is subject to congress's and senate's approval

Money Markets are anything with 1 year or less of remaining maturity

Fed fund market
big banks tend to run reserve deficits
small banks tend to run reserve deficits

fed fund rate is determined by fomc- Federal open market committee

Capital Market Instruments
Bonds - are long term
notes - are only up to 10 years
Common & preferred stock


negotiated market - the issuer chooses the investment bank based on an ongoing relationship

utility companies are not allowed to choose issuer because they are in a monopolistic market

Nasdaq is dealer market that do not require brokers

Real estate is much more like an auction market

S= T+2

Sentiment = Transection + 2 business days

transaction costs and taxes are major

Efficient markets - prices adjust immediately because they instantly reflect value- no profit opportunity even for insiders - no need for intervention


seewater - berkley and Harvard

freedman is a freshwater market affiliation (efficiaent market hypotheses)