This is my first post of 2014. I've been so busy working on research projects and getting ready for the new semester, that I've neglected my blog! So as its my first post of 2014, I want to talk about something uplifting. How about Britain's impending financial crash and debt crisis? The video below by MoneyWeek is part scaremongering and part drumming up business, but it worth watching as it does make some salient points. Most people want to ignore the scale of the UK's debt problem, but this documentary tackles it head on. Happy 2014!
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...