The layman’s finance crisis glossary

The current financial crisis has thrown terminology from the business pages onto the front page of newspapers, with jargon now abounding everywhere from the watercooler to the back of a taxi.
Here is a guide to many of the business terms currently cropping up regularly, as well as some of the more exotic words coined to describe some of the social effects of the credit crunch.
Administration Bear market Bond Bull market Chapter 11 Collateralised debt obligation Commercial paper Commodities Credit crunch Credit default swap Derivatives Equity Fundamentals Futures Hedge fund Hedging Investment bank Limited liabilityLeveraging Libor
Liquidity Loans to deposit ratio Mark-to-market Mortgage-backed securities Nationalisation Negative equity Profit warning Rating Securities lending Securitisation Security Short selling Spiv Stagflation Sub-prime mortgages Swap Underwriters Unwind Write-down
A-C
Administration
A rescue mechanism for UK companies in severe trouble. It allows them to continue as a going concern, under supervision, effectively to try to trade out of difficulty.
A firm in administration cannot be wound up without permission from a court.
Bear market
In a bear market, prices are falling and investors, anticipating losses, tend to sell. This can create a self-sustaining downward spiral.
Bond
A debt security – or more simply an IOU. The bond states when a loan must be repaid and what interest the borrower (issuer) must pay to the holder. Banks and investors buy and trade bonds.
Bull market
A bull market is one in which prices are generally rising and investor confidence is high.
Chapter 11
The term for bankruptcy protection in the US. It postpones a company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business, for example.

Collateralised debt obligations
A collateralised debt obligation is a financial structure that groups individual loans, bonds or assets in a portfolio, which can then be traded.
In theory, CDOs attract a stronger credit rating than individual assets due to the risk being more diversified. But as the performance of some assets has fallen, the value of many CDOs have also been reduced.
Commercial paper
Unsecured, short-term loans issued by companies. The funds are typically used for working capital, rather than fixed assets such as a new building.
Commodities
Commodities are products that, in their basic form, are all the same so it makes little difference from whom you buy them.
That means that they have a market price. You would be unlikely to pay more for iron ore from a particular mine, for example.
Credit crunch
The situation created when banks hugely reduced their lending to each other because they were uncertain about how much money they had.
This in turn resulted in more expensive loans and mortgages for ordinary people.
Credit default swap
A swap designed to transfer credit risk. The buyer of the swap makes periodic payments to the seller in return for protection in the event of a default.
A bank which owns a lot of mortgage debt could swap it, but would have to make a pay-out if those mortgages were not repaid.
Derivatives
Derivatives are a way of investing in a particular product or security without having to own it. The value can depend on anything from the price of coffee to interest rates or what the weather is like.
Derivatives can be used as insurance to limit the risk of a particular investment.
Credit derivatives are based on the risk of borrowers defaulting on their loans, such as mortgages.
Equity
In a business, equity is how much all of the shares put together are worth.
In a house, your equity is the amount your house is worth minus the amount of mortgage debt that is outstanding on it.
Fundamentals
Fundamentals determine a company, currency or security’s value. A company’s fundamentals include its assets, debt, revenue, earnings and growth.
Futures
A futures contract is an agreement to buy or sell a commodity at a predetermined date and price. It could be used to hedge or to speculate on the price of the commodity.
H-K
Hedge fund
A private investment fund with a large, unregulated pool of capital and very experienced investors.
Hedge funds use a range of sophisticated strategies to maximise returns – including hedging, leveraging and derivatives trading.
Hedging
Making an investment to reduce the risk of price fluctuations to the value of an asset.
For example, if you owned a stock and then sold a futures contract agreeing to sell your stock on a particular date at a set price. A fall in price would not harm you – but nor would you benefit from any rise.

Investment bank
Investment banks provide financial services for governments, companies or extremely rich individuals. They differ from commercial banks where you have your savings or your mortgage.P
Leveraging
Leveraging, or gearing, means using debt to supplement investment.
The more you borrow on top of the funds (or equity) you already have, the more highly leveraged you are. Leveraging can maximise both gains and losses.
Deleveraging means reducing the amount you are borrowing.
Libor
London Inter Bank Offered Rate. The rate at which banks lend money to each other.
Limited liability
Confines an investor’s loss in a business to the amount of capital they invested. If a person invests £100,000 in a company and it goes under, they will lose only their investment and not more.
Liquidity
The liquidity of something is how easy it is to convert it into cash. Your current account, for example, is more liquid than your house.
If you needed to sell your house quickly to pay bills you would have drop the price substantially to get a sale.
Loans to deposit ratio
For financial institutions, the sum of their loans divided by the sum of their deposits.
Currently important because using other sources to fund lending is getting more expensive.
Mark-to-market
Recording the value of an asset on a daily basis according to current market prices.
So for a futures contract, what it would be worth if realised today rather than at the specified future date. Also marked-to-market.
Mortgage-backed securities
These are securities made up of mortgage debt or a collection of mortgages. Banks repackage debt from a number of mortgages which can be traded. Selling mortgages off frees up funds to lend to more homeowners. See securities.
Nationalisation
The act of bringing an industry or assets like land and property under state control.
Negative equity
Refers to a situation in which the value of your house is below the amount of the mortgage that still has to be paid off.
Profit warning
When a company issues a statement indicating that its profits will not be as high as it had expected. Also profits warning.
Rating
Bonds are rated according to their safety from an investment standpoint – based on the ability of the company or government that has issued it to repay.
Ratings range from AAA, the safest, down to D, a company that has already defaulted.
Securities lending
Security lending is when one broker or dealer lends a security to another for a fee. This is the process that allows short selling.
Securitisation
Turning something into a security. For example, taking the debt from a number of mortgages and combining them to make a financial product which can then be traded.
Banks who buy these securities receive income when the original home-buyers make their mortgage payments.

Security
Essentially, a contract that can be assigned a value and traded. It could be a stock, bond or mortgage debt, for example.
Short selling
A technique used by investors who think the price of an asset, such as shares, currencies or oil contracts, will fall. They borrow the asset from another investor and then sell it in the relevant market.
The aim is to buy back the asset at a lower price and return it to its owner, pocketing the difference. Also shorting.
Spiv
A term popularised in World War II for flashily-dressed chancers involved in black market dealings. A fictional spiv is ladies’ man Private Joe Walker in Dad’s Army.
Newspaper headline writers use «spiv» as shorthand for traders who play for high stakes.
Stagflation
The dreaded combination of inflation and stagnation – an economy that is not growing while prices continue to rise.
Sub-prime mortgages
These carry a higher risk to the lender (and therefore tend to be at higher interest rates) because they are offered to people who have had financial problems or who have low or unpredictable incomes.
Swap
An exchange of securities between two parties. For example, if a firm in one country has a lower fixed interest rate and one in another country has a lower floating interest rate, an interest rate swap could be mutually beneficial.
Underwriters
When used of a rights issue, the institution pledging to purchase a certain number of shares if not bought by the public.
Unwind
To unwind a deal is to reverse it – to sell something that you have previously bought, or vice versa.
When administrators are called in to a bank, they must do the unwinding before creditors can get any money back.
Write-down
Reducing the book value of an asset to reflect a fall in its market value. For example, the write-down of a company’s value after a big fall in share prices.

Fuente: BBC

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Largest ever hoard of Anglo-Saxon gold found in Staffordshire

Largest ever hoard of Anglo-Saxon gold found in StaffordshireFirst pieces of gold were found in a farm field by an amateur metal detector who lives alone on disability benefit A harvest of Anglo-Saxon gold and silver so beautiful it brought tears to the eyes of one expert, has poured out of a Staffordshire field – the largest hoard of gold from the period ever found.

The weapons and helmet decorations, coins and Christian crosses amount to more than 1500 pieces, with hundreds still embedded in blocks of soil. It adds up to 5kg of gold – three times the amount found in the famous Sutton Hoo ship burial in 1939 – and 2.5kg of silver, and may be the swag from a spectacularly successful raiding party of warlike Mercians, some time around AD700.

The first scraps of gold were found in July in a farm field by Terry Herbert, an amateur metal detector who lives alone in a council flat on disability benefit, who had never before found anything more valuable than a nice rare piece of Roman horse harness. The last pieces were removed from the earth by a small army of archaeologists a fortnight ago.

Herbert could be sharing a reward of at least £1m, possibly many times that, with the landowner, as local museums campaign to raise funds to keep the treasure in the county where it was found.

Leslie Webster, former keeper of the department of prehistory at the British Museum, who led the team of experts and has spent months poring over metalwork, described the hoard as «absolutely the equivalent of finding a new Lindisfarne Gospels or Book of Kells».

«This is going to alter our perceptions of Anglo-Saxon England as radically, if not more so, as the Sutton Hoo discoveries,» she predicted.

The gold includes spectacular gem studded pieces decorated with tiny interlaced beasts, which were originally the ornamentation for Anglo-Saxon swords of princely quality: the experts would judge one a spectacular discovery, but the field has yielded 84 pommel caps and 71 hilt collars, a find without precedent.

The hoard has just officially been declared treasure by a coroner’s inquest, allowing the find which has occupied every waking hour of a small army of experts to be made public at Birmingham City Museum, where all the pieces have been brought for safe keeping and study.

The find site is not being revealed, in case the ground still holds more surprises, even though archaeologists have now pored over every inch of it without finding any trace of a grave, a building or a hiding place.

The field is now under grass, but had been ploughed deeper than usual last year by the farmer, which the experts assume brought the pieces closer to the surface. Herbert reported it as he has many previous small discoveries to Duncan Slarke, the local officer for the portable antiquities scheme, which encourages metal detectorists to report all their archaeological finds. Slarke recalled: «Nothing could have prepared me for that. I saw boxes full of gold, items exhibiting the very finest Anglo-Saxon workmanship. It was breathtaking.»

As archaeologists poured into the field, along with experts including a crack metal detecting scheme from the Home Office who normally work on crime scene forensics, Herbert brought one friend sworn to secrecy to watch, but otherwise managed not to breath a word to anyone – even the fellow members of his metal detecting society when they boasted of their own latest finds.

None of the experts, including a flying squad from the British Museum shuttling between London and Birmingham, has seen anything like it in their lives: not just the quantity, but the dazzling quality of the pieces have left them groping for superlatives.

They are still arguing about the date some of the pieces were made, the date they went into the ground, and the significance of most seemingly wrenched off objects they originally decorated. There are three Christian crosses, but they were folded up as casually as shirt collars. A strip of gold with a biblical inscription was also folded in half: it reads, in occasionally misspelled Latin, «Rise up O Lord, and may thy enemies be dispersed and those who hate the be driven from thy face.»

Kevin Leahy, an expert on Anglo-Saxon metal who originally trained as a foundry engineer, and who comes from Burton-on-Trent, has been cataloguing the find and describes the craftsmanship as «consummate», but the make up of the hoard as unbalanced.

«There is absolutely nothing feminine. There are no dress fittings, brooches or pendants. These are the gold objects most commonly found from the Anglo-Saxon ere. The vast majority of items in the hoard are martial – war gear, especially sword fittings.»

If the date of between AD650 and AD750 is correct, it is too early to blame the Vikings, and just too early for the most famous local leader, Offa of Offa’s Dyke fame.

Leahy said he was not surprised at the find being in Staffordshire, the heartland of the «militarily aggressive and expansionist» 7th century kings of Mercia including Penda, Wulfhere and Æthelred. «This material could have been collected by any of these during their wars with Northumbria and East Anglia, or by someone whose name is lost to history. Here we are seeing history confirmed before our eyes.»

Deb Klemperer, head of local history collections at the Potteries museum, and an expert on Saxon Staffordshire pottery, said: «My first view of the hoard brought tears to my eyes – the Dark Ages in Staffordshire have never looked so bright nor so beautiful.»

The most important pieces will be on display at Birmingham Museum and Art Gallery from tomorrow until Tuesday October 13, and will then go to the British Museum for valuation – a process which will involve another marathon collaboration between experts. Their best guess today is «millions».

Leahy, who still has hundreds of items to add to his catalogue, has in the past excavated several Anglo-Saxon sites including a large cemetery of clay pots full of cremated bone. He said: «After all those urns I think I deserve the Staffordshire find.»

Mysteries of Mercia

It is no longer politically correct to refer to the period as the dark ages – but Anglo-Saxon England remains a shadowy place, with contradictory and confusing sources and archaeology. Yet out of it came much that is familiar in modern Britain, including its laws, its parish boundaries, a language that came to dominate the world, as well as metalwork and manuscript illumination of dazzling intricacy and beauty.

Mercia was one of Britain’s largest and most aggressive kingdoms, stretching from the Humber to London, its kings and chieftains mounting short but ferocious wars against all their neighbours, and against one another: primogeniture had to wait for the Normans, so it was rare for a king to reign unchallenged and die in his bed.

They were nominally Christian by the date of the Staffordshire hoard, but sources including the Venerable Bede suggest that their faith was based more on opportune alliances than fervour.

In south Staffordshire, at the heart of the kingdom, Tamworth was becoming the administrative capital and Lichfield the religious centre as the cult grew around the shrine of Saint Chad. There were few other towns, and most villages were still small settlements of a few dozen thatched buildings. Travel, if essential, would have been easier by boat: archaeology suggests that much of the Roman road network was decaying, and in many places scrub and forest was taking back land which had been farmed for centuries.

The metalwork in the hoards came from a world very remote from the lives of most people, in mud and wattle huts under thatched roofs, living by farming, hunting, fishing, almost self-sufficient with their own weavers, potters and leather workers, needing to produce only enough surplus to pay dues to the land owner. A failing harvest would have been a far greater disaster than a battle lost or the death of one king and the rise of another.

The world of their nobles is vividly evoked in poems like Beowulf, probably transcribed long after they became familiar as fireside recitations, of summer warfare and winter feasting in the beer hall, where generous gift giving was as important as wealth.

Rich and poor lived in the incomprehensible shadow of a vanished civilisation, the broken cement and stone teeth of Roman ruins studding the countryside, often regarded with dread and explained as the work of giants or sorcerers. One poem in Old English evokes the eerie ruins of a bathing place, possibly Bath itself: «death took all the brave men away, their places of war became deserted places, the city decayed.»

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John Deere – 175th Anniversary

It All Started With a Steel PlowCelebrating 175 years of commitment to those linked to the land

Our roots go back to 1837 and John Deere’s one-man blacksmith shop. We’re proud of this heritage and are excited about a future full of opportunities to help meet the world’s growing need for food, shelter, and infrastructure. We’re celebrating all of this in 2012, our 175th anniversary, and we hope you’ll join in.

Who was John Deere?

The man behind the name
John Deere – Founder and President 1837-1886

In addition to being our company’s founder and innovator of the self-scouring steel plow, John Deere was a father and active public servant.

He had nine children (Francis, Charles, Hiram, Jeannette, Ellen, Frances, Emma, Alice, and Mary) with his wife, Demarius Lamb.

One year after Demarius died, he married her sister, Lucenia.

He was an active abolitionist.

He hand-delivered books and candles to local schools.

Always the innovator, he cooled his Moline home using a large clay pipe that pulled cool air from the ground and circulated it through the house.

The story of John Deere, who developed the first commercially successful, self-scouring steel plow, closely parallels the settlement and development of the midwestern United States.

Deere was born in Rutland, Vermont, on February 7, 1804, the third son of William Rinold Deere and Sarah Yates Deere. In 1805, the family moved to Middlebury, Vermont, where William engaged in merchant tailoring. In 1808, he boarded a boat for England, in the hopes of claiming an inheritance and making a more comfortable life for his family. He was never heard from again, and is presumed to have died at sea.

Raised by a mother on a meager income, John Deere’s education was probably rudimentary and limited to the common schools of Vermont. At the age of 17, he apprenticed himself and learned the trade of blacksmithing, which he carried on at various places in Vermont.

In 1837, facing depressed business conditions in Vermont and with a young family to care for, Deere traveled alone to Grand Detour, Illinois, to make a fresh start. Resourceful and hard working, his skills as a blacksmith were immediately in demand.

The new pioneer farmers struggled to turn heavy, sticky prairie soil with cast iron plows designed for the light, sandy soil of New England. John Deere was convinced that a plow that was highly polished and properly shaped could scour itself as it cut furrows. In 1837, he created such a plow, using a broken saw blade.

By 1841, Deere was producing 100 of the plows annually. In 1843, he entered a partnership with Leonard Andrus to produce more plows to meet increasing demand.

By 1848, Deere dissolved his partnership with Andrus and moved the business to Moline, Illinois, which offered advantages of water power, coal and cheaper transportation than to be found in Grand Detour. In 1850, approximately 1600 plows were made, and the company was soon producing other tools to complement its steel plow.

In 1858, Deere transferred leadership of the company to his son, Charles, who served as its vice president. John Deere retained the title of president of the company, but now turned his attention to civic and political activities.

John Deere was active in public life throughout his career in Moline. Among other roles, he was a founder and president of the National Bank of Moline, was an active member of the First Congregational Church, and served as the city’s mayor for two years.

John Deere died on May 17, 1886, at his home in Moline.

Deere & Company (NYSE: DE) is a world leader in providing advanced products and services and is committed to the success of customers whose work is linked to the land – those who cultivate, harvest, transform, enrich and build upon the land to meet the world’s dramatically increasing need for food, fuel, shelter and infrastructure. Since 1837, John Deere has delivered innovative products of superior quality, built on a tradition of integrity. N B: This biography was dealt with with a group of students currently working at the Granadero Baigorria plant.

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