financial concepts



Psychological manipulation

Market manipulation


Purchasing Managers’ Index – PMI

Purchasing Managers’ Index
“Purchasing Managers’ Indices (PMI) are economic indicators derived from monthly surveys of private sector companies. The two principal producers of PMIs are Markit Group, which conducts PMIs for over 30 countries worldwide, and the Institute for Supply Management (ISM), which conducts PMIs for the United States.

Markit Group and the ISM separately compile Purchasing Managers’ Index (PMI) surveys on a monthly basis by polling businesses which represent the makeup of the respective business sector. The surveys cover private sector companies, but not the public sector.”

Purchasing Managers’ Index – PMI
“The Purchasing Managers’ index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. Prior to September 1, 2001, the acronym (PMI) stood for Purchasing Managers’ Index. The Institute of Supply Management (ISM) now uses only the acronym, PMI. Although the ISM publishes several indexes, the PMI is the most widely followed and is sometimes referred to as the ISM index.”
Economic Indicators: Purchasing Managers Index (PMI)

Markit Economics > Press releases: PMI by country

Manufacturing PMI by country


Market Capitalization

Market Capitalization
“Market capitalization is just a fancy name for a straightforward concept: it is the market value of a company’s outstanding shares. This figure is found by taking the stock price and multiplying it by the total number of shares outstanding.”

Market Capitalization
“Market capitalization or market cap is the total dollar market value of the shares outstanding of a publicly traded company; it is equal to the share price times the number of shares outstanding.[2][3] As outstanding stock is bought and sold in public markets, capitalization could be used as a proxy for the public opinion of a company’s net worth and is a determining factor in some forms of stock valuation. The investment community uses this figure to determine a company’s size, as opposed to sales or total asset figures.”

Market Capitalization
“Market capitalisation or market cap is the market value of a company’s issued share capital – in other words. the number of shares multiplied by the current price of those shares on the stock market. Companies are ranked as large-cap, mid-cap and small-cap depending on their market capitalisation (market cap), though the actual criteria for classification depend on the market concerned.”



What’s a clearinghouse?
“A clearing requirement is a requirement that all eligible derivatives be cleared on a central clearinghouse (also known as a central counterparty, or CCP). A clearinghouse provides critical counterparty risk mitigation by mutualizing the losses from a clearing member’s failure, netting clearing members’ trades out every day, and requiring that parties post collateral every day. Clearinghouses also centralize trade reporting, and can provide any level of post-trade transparency to the OTC derivatives markets that your heart desires — same-day trade reporting, including prices, aggregate and counterparty-level position data, etc. Virtually all of the harmful opacity and murkiness of the current OTC derivatives markets can be ended with just a clearing requirement — that is, a clearing requirement is a prerequisite for getting rid of the harmful opacity in OTC derivatives; an exchange-trading requirement is not…”

Clearing House
“An agency or separate corporation of a futures exchange responsible for settling trading accounts, clearing trades, collecting and maintaining margin monies, regulating delivery and reporting trading data. Clearing houses act as third parties to all futures and options contracts – as a buyer to every clearing member seller and a seller to every clearing member buyer.”

Clearing house (finance)
“A clearing house is a financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions. These transactions may be executed on a futures exchange or securities exchange, as well as off-exchange in the over-the-counter (OTC) market. A clearing house stands between two clearing firms (also known as member firms or clearing participants) and its purpose is to reduce the risk of one (or more) clearing firm failing to honor its trade settlement obligations. A clearing house reduces the settlement risks by netting offsetting transactions between multiple counterparties, by requiring collateral deposits (also called “margin deposits”), by providing independent valuation of trades and collateral, by monitoring the credit worthiness of the clearing firms, and in many cases, by providing a guarantee fund that can be used to cover losses that exceed a defaulting clearing firm’s collateral on deposit. Also, it acts as a clearing firm.”




“Stagflation is the term for an economic period of slow growth, relatively high unemployment and rising prices.  Other indicators of stagflation are reductions in gross domestic product and other productivity measures.”



Cash equity, Market equity
“market equity represents a property’s value to its owner based on an increase in demand. If someone bought a $100,000 house with 20% down and the house was now worth $130,000, that owner would have $20,000 in cash equity in the property and $30,000 in market equity. The owner’s cash equity position is stable and increases each month as a portion of his monthly mortgage payment goes towards paying down the principal borrowed. Market equity can change at any time as real estate market and broader economic conditions fluctuate.”



Celebrity bond
“A celebrity bond is commercial debt security issued by a holder of fame-based intellectual property rights to receive money upfront from investors on behalf of the bond issuer and their celebrity clients in exchange for assigning investors the right to collect future royalty monies to the works covered by the intellectual property rights listed in the bond. Typically backed by music properties, the investment vehicle was pioneered in 1997 by rock and roll investment banker David Pullman through his $55 million David Bowie bond deal”

Bowie: man whose bonds fell to earth
“In 1997 David Bowie became the toast of the financial world when he issued bonds against his future income. Now things have turned sour. Nic Fleming reports”

David Bowie

Who’s Who in Bowie Bonds

Wall Street figured out how to securitize your rent. Should you worry?

Securitized Profits


“In general, capitalizing expenses is beneficial as companies acquiring new assets with a long-term lifespan can spread out the cost over a specified period of time. Companies take expenses that they incur today and deduct them over the long term without an immediate negative affect against revenues.
If a company capitalizes regular operating expenses, it is doing so inappropriately, most likely to artificially boost its operating cash flow and look like a more profitable company. Because a company can’t hide its expenses forever, such a practice will fail in the long run.”