Economies

Black Monday occurred on 19 October 1987. It represents the largest one day sell off in the history of the U.S. equities markets, led by losses in the DJIA and the S&P 500.

What Is Keynesian Economics? Keynesian economics is an economic theory that argues that governments should spend heavily on infrastructure projects and unemployment benefits during economic downturns in order to stimulate consumer and business spending, growth and job creation. The theory was developed by British economist John Maynard Keynes in his 1936 book, The General Theory of Employment, Interest, and Money. It was published during the Great Depression, when nothing seemed…

What Are Government Bonds? Bonds are debt instruments issued by governments to the public. Essentially, when a government sells bonds, it's borrowing money to finance its activities, including infrastructure projects, health and welfare benefits, defense expenditures and the like. It also sells bonds to pay off its previously issued debt—in other words, selling new debt to retire old debt. The United States government bond market is the largest debt market…

What Are Tariffs? Tariffs are a tax or duty imposed on imported foreign goods. They're paid by the company importing the product, although the foreign company exporting the product may thereby find its products too expensive to sell in foreign markets depending on how high the tariffs are. The importing company paying the tariff may absorb the cost or pass it along to consumers, or a combination of the two.…

What Is A Safe Haven Asset? Safe haven assets are investments that investors turn to during times of market volatility and instability, i.e., to "weather the storm." These investments are perceived to be safe from losses during market turmoil or are negatively correlated to the market at large, meaning they may go up in price when the majority of other assets, mainly stocks, are losing value. Most Common Safe Haven…

What Is Dow Theory? The Dow Theory is a technical analysis concept that adherents believe can signal whether the stock market is headed upward ("bullish") or downward ("bearish"). The idea was developed in the late 19th century by Charles Dow. He was the founder of the Wall Street Journal and co-founder of its then parent company, Dow Jones & Company, as well as the creator of the Dow Jones Industrial…

What Is The Lehman Brothers Collapse? The collapse of Lehman Brothers in September 2008 was the largest instance of corporate bankruptcy in American history. The firm's failure is generally regarded as the seminal event of the global financial crisis, which triggered the Great Recession that followed. The effects are still being felt today in the form of weak economic growth and unprecedented central bank intervention in the global economy and…

What Is Modern Portfolio Theory? Modern portfolio theory is an investing model designed to help investors structure a portfolio that seeks to maximise returns with a minimal level of risk, largely through diversification. Who Created Modern Portfolio Theory? The theory was devised by Harry Markowitz in an article entitled "Portfolio Selection" published in the Journal of Finance in 1952. In the article, he quantified a method for constructing such a…

The U.S. Department of the Treasury is the largest issuer of bonds in the world. It issues debt securities in order to fund the activities of the U.S. government, which generally runs high budget deficits. As of 31 December 2018, the U.S. federal debt totaled slightly below US$22 trillion. Of that amount, $16.1 trillion was held by the public and $5.9 trillion was held by other entities of the federal…

The U.S. Energy Information Administration (EIA) is an official provider of energy-related data and analytics. Initially created by the Federal Energy Administration Act of 1974, the EIA specializes in the collection, analysis and dissemination of energy industry data at the federal level. Producers, traders and government officials view the EIA as a leading authority on the current state of global energy. Mission And Products Dating back to the oil crises…

The Financial Industry Regulatory Authority (FINRA) is a private, not-for-profit agency authorised by the U.S. Congress to protect American investors from fraud and wrong-doing by securities brokers. It's not part of the U.S. government but is overseen by the Securities and Exchange Commission, which is part of the government. FINRA regulates U.S. brokerage firms by enforcing its own rules as well as federal securities laws and those of the Municipal…