Page numbers refer to the print edition but are hyperlinked to the appropriate location in the e-book.
Abu Dhabi Investment Authority, 129
accredited investors, 259
Act of 1545 (England), 36
Agricultural Adjustment Act, 108
agriculture, farmland and, 282
Akkadian civilization, 16, 33, 60
Allied Crude Vegetable Oil Refining Corporation, 167
alternative investments, 256–89; commodities and natural resources as, 281–82; definition of, 257; final word on, 283; during financial crises, 259–60; fixed income securities as, 10, 134, 283; future of, 288–89; infrastructure projects as, 282–83; private equity as, 258, 274–77; REITs as, 280–81; rise of, 296–98; snapshot of, 257–60; timber, agriculture and farmland as, 282; types of, 10, 256; venture capital as, 277–80, 278, 279. See also hedge funds
American Economic Review, 233
American Express Field Warehousing Corporation, 168
American Express Warehousing Ltd., 168–69
American Institute of Certified Public Accountants (AICPA), 150–51
American Recovery and Reinvestment Act, 218
American Research and Development Corporation (ARD), 275
American Revolution: British supplies contract after, 175; costs incurred by, 88; soldiers compensated during, 102
American Stock Exchange, 89, 95
Anne (queen of Great Britain), 132
Appianus, Aurelius, 20–21
Aquinas, Thomas (saint), 33
art, stamps, coins, and wine speculation, 283
asset pricing, 229–38; capital structure and, 233–34; discounted cash flow models and, 232–33; mathematical finance and, 230; NPV and, 231–32
association (compera), 83
Augustus (Roman emperor), 58–59
bailouts: of Long-Term Capital Management, 6; restructurings and, 217; too big to fail and, 216, 219–20
bankers: as lenders of last resort, 25; social status of, 28
Bank of the United States, 176
bankruptcies: capital structure arbitrage and, 265; of cities, 111; country banks and, 74; Stanford, A., and, 154
banks and banking: branches, 75; crisis, 1970s, 75; decentralization of, 72, 74; depository banks not allowed as investment banks, 276; in England, 70, 73–75; Industrial Revolution and, 73–75; of London, 73, 82; mergers, 136; mutual savings banks, 134–37. See also commercial banks; merchant banks
Barbarians at the Gate, 276
Bergen Tunnel construction project, 178
Birds, The (Aristophanes), 24
Bismarck, Otto von, 108–9
Black Thursday (October 24, 1929), 164
bonds: convertible, 178; fabrication of Italian, 163; government, 6, 135, 176; high-yield, 276; holding, 93; investment in, 257, 259, 297, 301; management of, 102
bookkeeping, double-entry, 41
borrower, reputation of, 22–23
Boston Consulting Group, 194
Bristol-Myers Squibb, 188
Britain: beggar-thy-neighbor policies in, 202; colonial rule of India, 49–50, 61; supplies contract, after American Revolution, 175
British Bankers’ Association, 182
British East India Company, 66, 326
Brookings Institution, 91
Bubble Act of 1720, 68, 87
bubbles: causes of, 5; housing bubble of 2004–2006, 213–14; South Sea Bubble, 68–69; technology (dot-com bubble of 1999-2000), 187, 213, 223–24, 246, 263, 276, 287
budget deficit projections, 218
Buffett, Warren: American Express and, 169; earnings of, 305; on efficient market hypothesis, 250–51; financial leverage and, 6; on real ownership, 4; resource allocation and, 7; as value manager, 140
bull market: in 1920s, 91; of 1990s, 269, 285; after World War II, 92, 143
Buttonwood Agreement, 88, 97
Cady, Roberts decision, 192
California Public Employees Retirement System (CalPERS), 129
call option: performance fee as, 310–11; sale of, 151
“Can Stock Market Forecasters Forecast?”(Cowles), 248
capital asset pricing model (CAPM), 243–45
Capital Research and Management Company, 112
capital structure: asset pricing and, 233–34; capital structure arbitrage, 265
Carnegie Steel Corporation, 276
Centre for Hedge Fund Research, 268
CEOs, resource allocation and, 6–7
Changshengku (long-life bank), 29
China: interest rates in, 29; lending in, 28–31; trade and, 48; usury in, 39; venture capital and, 279
chreokoinonia investment framework, 52
Cigar Excise Tax Extension bill, 280
cities: bankruptcies of, 111; construction and modernization of, 135; laborers relocation to, 77; trade and, 42–43
City Code on Takeovers and Mergers, 182
claim on debt (luoghe), 83
Clements, Robert Earl, 108
Clouds, The (Aristophanes), 24
collective investment, 50–55; investment partnerships as, 51–54; joint-stock companies in Rome as, 50–51
Colonial Index Trust, 285
commander in chief (shogun), 45
commercial banks: focus of, 135; Glass-Steagall Act and, 213; in Greece, 25–26; holdings of, 137; liquidity and, 327
commission rate, deregulation of, 92
Committee on Economic Security, 108, 109
commodities, natural resources and, 281–82
community foundations, 128
compagnia partnership, 64
Companies Act of 2006, 182
compera (association), 83
Concordia Res Parvae Crescunt trust, 140
Consolidated Uranium Mines, 180
convertible arbitrage, 265
corporate form: characteristics of, 14, 63; emergence of, 64–69; loosened restrictions on, 89
corporate foundations, 126, 127
corporate-run pensions, 110–14
“Cost of Capital, Corporation Finance and the Theory of Investment, The” (Modigliani and Miller, M.), 233
Council of Economic Advisers, 207
Cowles Commission for Research in Economics (now Cowles Foundation), 247
Crash of 1929: analysis of, 247; causes of, 190; closed-end mutual funds during, 141; Great Depression and, 203–5, 208, 222; regulatory response to, 210–12; warnings for, 197
credit, 5; cheap, 205; consumer, 39; creditworthiness, 208, 221, 222, 322; extension, 208; interest-free loans, 25; letters of, 22
credit default swap market, 220
cross-exchange arbitrage, 171
“Cross-Section of Expected Stock Returns, The” (Fama and French), 245
Curtiss-Wright Corporation, 192
cyclical crises: management of, 225–26; reducing effects of, 9
daimyo (feudal ruler), 45
debt: government, depository receipt for, 140; mortgage, highly rated tranches of, 224; products, 283. See also public debt
decentralized management approaches, 7
defined benefit plans: assets of, 113; liabilities and risks of, 122–23; regulations prohibiting too much stock ownership, 123; shift away from, 117, 295, 302
democratization of investment: accelerator of, 70; byproduct of, 291; definition of, 3; development of, 13, 318; impacts of, 139, 283, 296; links to, 120; manifestations of, 99, 116–17; origins of, 62–63; requirements of, 131; significance of, 7–8; story of, 97–98; success of, 147; theme of, 7, 98, 318; transition to, 61
depository receipt, for government debt, 140
Depository Trust Company, 149
deregulation: of commission rate, 92; of savings and loan associations, 136
derivatives: leverage and, 214; opportunities with, 92; options pricing formula for, 235–36, 237; partial, 236; pricing, 230, 237; Samuelson on, 234–35; speculation in, 221
Diandang lending institution, 30
discounted cash flow models, 232–33
distressed turnaround operation, 19
dividend discount model, of stock valuation, 232
“Dogs of the Dow” strategies, 254
Dojima Rice Exchange, 45, 60
dot-com bubble of 1999–2000, 213
Dow Jones UBS Commodity Index, 282
Drexel Burnham Lambert, 186
Dutch East India Company, 66, 85, 97
Dutch joint-stock companies, 64
East India Companies, 46–47, 49, 61, 69; British East India Company, 66, 326; Dutch East India Company, 66, 85, 97
Ecclesiastes (Bible), 239
economies of scale, 75, 298
Economist, 302; Commodity-Price Index, 281
educational endowments, 124–25
Edward III (king of England), 44
Edward VI (king of England), 65
“Efficient Capital Markets: A Review of Theory and Empirical Work” (Fama), 249
Egypt: interest-free banking institutions in, 38; interest rates in, 23–24; lending in, 22–24
Eisenhower, Dwight D., 280
Elizabethan Act of 1571, 36
Employee Retirement Income Security Act (ERISA), 92, 112, 113, 282; impacts of, 292–93; rewriting of, 275
endowments, 123–25, 145; educational, 124–25; in Greece and Rome, 56–57, 57; taxes and, 124; university, 257, 271, 296, 328
enforcement, improved, 147
England: Act of 1545, 36; banking in, 70, 73–75; joint-stock companies in, 64–66, 86; stock market in, 86–87; sugar consumption in, 75, 77
English Poor Law of 1601, 100
Equitable Life Assurance Society, 132
estates: land and, 14–21; management, in Greece, 18–19; management, in Rome, 19–21
Europe: medieval, 53–54; population growth in, 71
event-driven strategies, 265
farmland, agriculture and, 282
Federal Deposit Insurance Corporation (FDIC), 136–37
Federal Housing Administration (FHA), 321
Federal Reserve: data from, 137; financial crisis of 2007–2009 and, 214; Great Depression and, 205–7; Great Recession and, 217–18, 220–21, 225; Greenspan and, 213; interest rates and, 198; as lender of last resort, 216; policy of, 333; Strong and, 201
Federal Savings and Loan Insurance Corporation, 135–36
Federal Trade Commission (FTC), 211–12
fees: event-based, 304; expense, 304; hedge funds, 261, 262, 270–71, 273, 301–2, 304–6, 308–9, 313, 314; implication of high, 311–12; management, 261, 270, 273, 304–5; as misleading proxy for quality, 309–10; performance versus, 312–15; premature withdrawal, 114. See also performance fee
feudal ruler (daimyo), 45
financial accelerator, 208
Financial Analysts Journal, 257–58
financial crises: alternative investments during, 259–60; legacy of, 213
financial crisis of 2007–2009, 143; cause of, 276, 323; Federal Reserve and, 214; impacts of, 1, 231, 260, 298; key dates in, 227
Financial Industry Regulatory Authority (FINRA), 180
Financial Stability Oversight Council, 220
financier (ummianum), 51–52
financiers (kuramoto), 45
“Finding Bernie Madoff: Detecting Fraud by Investment Managers” (Dimmock and Gerken), 169–70
First Index Investment Trust, 284
Food for Peace program, 167
foreign investment: in India, 49–50; in Japan, 46–48
Foundations of Economic Analysis (Samuelson), 234
401(k), 113–14; automatic enrollment in, 115–16; default contribution rates and allocation of funds, 116; management of, 122; mutual funds and, 144
France: beggar-thy-neighbor policies in, 202; capital in, 80–82
fraud, 9; De Angelis and, 167–70; Guinness sharetrading, 181–82; Kreuger, I., and, 161–63; Madoff, B., and, 1, 68, 147, 148–53; Miller, W., and, 158–59; Ponzi and, 152, 156–58; Stanford, A., and, 153–56; Ward and, 160–61; Whitney, R., and, 163–67. See also trading frauds
Friedman, Milton: A Monetary History of the United States, 1867–1960, 206; on permanent income hypothesis, 121–22; theory of, 9, 197
Friehling and Horowitz, 150–51
“Fund for Pious Uses,” 102
futures: commodities and natural resources, 282; contract, 45
Galbraith, John Kenneth, 162
Garn–St. Germain Depository Institutions Act of 1982, 136
general mercantile exchanges, 84
General Reserve Fund, 129
General Theory of Employment, Interest, and Money, The (Keynes), 121, 209
Gerken, William Christopher, 169–70
Glorious Revolution of 1688, 86, 97
gold: bidding war, 206; holdings of, 282; standard, 201, 203
Great Depression of 1930s, 197–212; causality of, 205–7; Crash of 1929 and, 203–5, 208, 222; deflation and, 198, 231; Federal Reserve and, 205–7; impacts of, 91, 95, 163, 321; interest rates and, 106–7; monetary and fiscal response to, 208–10; 1920s growth and, 199–200; open-ended mutual fund and, 141–42; origins of, 197; policy responses to, 196; Regulation Q and, 114; regulatory response to, 210–12; retirement and, 106–8; Strong and, 200–203
Great Recession of 2007–2009, 212–25; buildup to, 213–15; the crash, 215–16; Federal Reserve and, 217–18, 220–21, 225; fiscal response to, 218–19; intercrisis period, 212–13; key dates in, 227; recovery from, 224–25; regulatory response to, 219–22; response to, 196, 216–22; Treasury and, 217–18, 225
Greece: commercial banks in, 25–26; endowments and foundations in, 56–57, 57; estate management in, 18–19; financial leverage in, 5; guardianship in, 58; interest-free consumption loans in, 25; lending in, 22, 24–27, 60; maritime loans in, 26–27; real estate loans in, 27; resource allocation in, 6; usury in, 33
Guardian International Bank, 154
Guinness sharetrading fraud, 181–82
Hace Şerefüddin el-Hace Yahya, 52
hedge funds, 260–74, 268; definition of, 261; fees, 261, 262, 270–71, 273, 301–2, 304–6, 308–9, 313, 314; funds of, 270–71; growth and development of, 262–64; highest-paid managers, 304–6, 307; illiquidity of, 271–72; origin of, 261–62; passive aggressive, 301, 302; risks and returns of, 272–74; strong performers’ characteristics, 269; universe today, 264–69
Heshuyen, Frans Jacob, 140
House Appropriations Committee, 194
housing bubble of 2004–2006, 213–14
Hughes, Charles Evans, 108
Immigration Act of 1924, 199
increase or expansion (riba), 37–38
independent custodian, 153
independent foundations, 127
indexing, market efficiency and, 301–3
individuals, retirement accounts and, 120–23
Industrial Revolution, 70–82; banking and, 73–75; breadth of, 79–80; capital in, 71–72; discussions about, 61; impacts of, 8, 40, 98; laborers during, 63, 77–79; wealth generation during, 75–77. See also Second Industrial Revolution
inflation: of 1960s and 1970s, 114, 135; protection against, 115, 258; during World War I, 198
infrastructure projects, 282–83
Insider Trading Sanctions Act of 1984, 193
institutional clients, 10, 123
Institutional Investor, 299
Intelligent Investor, The (Graham), 250
interest: carried, 304, 308, 327; interest-free banking institutions, 38; interest-free loans, 25; lending and, 8, 21–31. See also usury
interest rates: in China, 29; in Egypt, 23–24; Federal Reserve and, 198; in fiat systems, 201; Great Depression and, 106–7; savings and, 114, 135–36, 205; swaps, 183
international reply coupon, 156–57
investment: definition of, 2; professionalization of, 123; theory, 9; vehicles, types of, 10
Investment Advisers Act of 1940, 142, 275
Investment Company Act of 1940, 142, 286
Investment Company Institute, 114
investment management: future developments in, 10–11; issues in, 2; views on, 69
investment managers: highest-paid, 304–6, 307; independence and entrepreneurship of, 3, 10, 291–300, 300, 315–16, 319; revenue growth and wealth creation for, 303–8; successful, 10–11;
investment partnerships, 51–55; formation of, 258; global influences on, 54–55; Islamic societies and, 53; medieval Europe and, 53–54; in Mediterranean Sea and Middle East, 51–52
investment principles, 3–7, 332–34; financial leverage as, 5–6, 333; fundamental value as, 4–5, 333; real ownership as, 4, 333; resource allocation as, 6–7, 334
investment professionals: performance of, 247–55; relationships with, 10
Investors Diversified Services (IDS), 142–43
Islamic societies: investment partnerships and, 53; usury and, 37–38
’isqa investment partnership, 52
Italian city-states: merchant banks of, 6, 42–44, 54, 291; public debt securitization in, 82–84
Ivan the Terrible (Russian czar), 65
James I (king of England and Ireland), 65
James II (king of England and Ireland), 86
Japan: foreign investment in, 46–48; lending in, 31; real estate and, 217; trade in, 44–46, 60
Jews: ’isqa investment partnership and, 52; Madoff, B., and, 150; usury and, 34–35
Jianjiao-ku (orphans’ funds), 29
John D. and Catherine T. MacArthur Foundation, 127
joint-stock corporation, 87
Jonathan’s Coffeehouse, 86
Journal of Finance, The, 245
J. P. Morgan Private Banking, 138–39
Justinian (Roman emperor), 34
Keynes, John Maynard: The General Theory of Employment, Interest, and Money, 121, 209; theory of, 9, 197, 202, 212, 231
Kindleberger, Charles, 206
Knickerbocker Trust Company, 200
Kohlberg Kravis Roberts (KKR), 276
kuramoto (financiers), 45
Kuwait Investment Authority, 129
laborers: during Industrial Revolution, 63, 77–79; labor force participation rates, 104–5
land: absentee owners, 19; borrowings against, 5; estates and, 14–21; as foundation of wealth and investment, 8; leases, 16–17; Mesopotamia and, 15–17, 291; passive ownership of, 15
lending: in China, 28–31; collateral and, 24, 30; in Egypt, 22–24; in Greece, 22, 24–27, 60; interest and, 8, 21–31; in Japan, 31; life as loan from gods, 24; pawnshops, 30–31; risky types of, 39; in Rome, 27–28; subprime-mortgage, 223
Life, Liberty and Property: A Story of Conflict and a Measurement of Conflicting Rights (Jones), 261
life expectancy, increase in, 105
LIMRA market research, 134
liquid assets (saltum), 52
Literary Works by Mr. Huang of Jinhua, 30
Livermore, Jesse Lauriston, 204
Lives of the Twelve Caesars (Suetonius), 59
lock-ups, initial investment, 271–72
Lombard Street (Bagehot), 216
London: banks of, 73, 82; public markets and, 86–87, 97
London Stock Exchange, 95
London Stock Exchange Group, 95
long-life bank (Changshengku), 29
luoghe (claim on debt), 83
malfeasance: examples of, 9, 146; prevention of, 133, 141
manager in provinces (pro magistro), 51
market efficiency and indexing, 301–3
Mary I (queen of England and Ireland), 65
Massachusetts Investors Trust, 141
mathematical finance, 230
mean-variance optimization, 10, 243
Mediterranean Sea: investment partnerships in, 51–52; trade and, 41–42
mergers: acquisition or, 265; banks, 136; NYSE, 95
Mesopotamia: land and, 15–17, 291; trade in, 41; usury in, 33
middle class: creation of, 8; investment by, 120
Middle East: investment partnerships in, 51–52; SWFs, 130
Mit Ghamr Savings Bank, 38
momentum investing strategies, 314
Monetary History of the United States, 1867–1960, A (Friedman and Schwartz), 206
money: Aristotle on, 33, 59; expanding supply of, 176; sterility of, 23; time value of, 32
money market mutual funds, 143
mortgages, 321–23; insurance, 321; mortgage-backed securities, 217, 266, 323; mortgage debt, highly rated tranches of, 224; subprime-mortgage lending, 223
mutual funds, 139–44; closed-end, 140, 141; 401(k) and, 144; Great Depression and open-ended, 141–42; industry today, 144; money market, 143; opportunities with, 92; during postwar period, 142–44; precursors to, 140; in retirement accounts, 295; shares through, 93
mutual life insurance companies, 133–34
naruqqum investment partnerships, 52
National Conference of Commissioners on Uniform State Laws, 124
National Housing Act of 1934, 321–22
national or international exchange, 94
National School Lunch Program, 167
National Venture Capital Association (NVCA), 278
natural catastrophe, 332; raising funds by selling, 162; “safe,” 1; selling and purchasing, 165; Treasury, 252
natural resources, commodities and, 281–82
negotiable bills of exchange, 83–84
net present value (NPV), 231–32
New York Curb Market Agency, 89, 97
New York Stock Exchange (NYSE), 88, 191; closure of, 203; mergers and transformations, 95; “Own Your Share of American Business” campaign, 92; stock ticker network, 95; trading volume, 89, 90; Whitney, R., and, 164–67
New York Stock Exchange Gratuity Fund, 165
no-arbitrage condition, 235–36
nonnegotiable bills of exchange, 83
NYSE Regulation Inc., 180
Oeconomicus (Xenophon), 18
oil: crisis, 143; dealers, of Oyamazaki, 45; prices, 114
Oregon Investment Council, 296
orphans’ funds (Jianjiao-ku), 29
Over the Counter Bulletin Board, 180
“Own Your Own Home” campaign, 321
“Own Your Share of American Business” campaign, 92
Packard Motor Car Company, 111
Panel on Takeovers and Mergers, 182
Paris, stock market in, 85
Pension Benefit Guaranty Corporation, 112
pensions: corporate-run, 110–14; funds, 282, 303, 327; growth of, 117; insurance and, 106, 112; plans, 258, 292; Presbyterian Church and, 101–2; reinsurance, 111–12; in Rome, 58–59, 60; Social Security and private, 109–10; sophistication of, 112–13; taxes and, 109–10, 112; Union Army, 105
“Pensions: The Broken Promise” (NBC Reports), 111
permanent income hypothesis, 121–22
Philadelphia Saving Fund Society, 103–4, 134
political democratization, 63
population growth, in Europe, 71
Presbyterian Church, 101–2
price-to-earnings (P/E) ratios, 204
PricewaterhouseCoopers, 174
“Pricing of Options and Corporate Liabilities, The” (Black and Scholes), 235
Primary Reserve Fund, 143
principal-agent problems, 47, 61
private wealth management, 137–39
probabilistic insurance, 252
pro magistro (manager in provinces), 51
promissory notes (tegata), 46
property, separate “claim” on, 46
Protestant Reformation, 36
Provident Institution for Savings, 134
public asset management, 16
public auction (sub hasta), 50
public debt: issuance of, 96; Italian city-states securitization of, 82–84; from War of Spanish Succession, 67
public markets, 82–97; Amsterdam and, 84–85, 97; consolidation of, 94–95; emergence of, 63, 98; London and, 86–87, 97; Second Industrial Revolution and, 89; technology and, 89–90; United States and, 88–89, 97
Quanfu governmental agency, 28
quantitative fund (quant strategy), 264, 267–68
Railroad Retirement System, 109
Rampart Investment Management, 151
real estate: analysis of, 207; investments, 136; Japan and, 217; loans, in Greece, 27; values, 214–15
real estate investment trusts (REITs), 280–81
regional exchanges, 94–95
regulations: improved, 147; prohibiting too much stock ownership, 123; Regulation Q, 114, 143; response to Crash of 1929, 210–12; response to Great Depression, 210–12; response to Great Recession, 219–22; SEC and, 166, 180, 194–95, 259
relative value funds, 267
representative sampling, 286
Reserve Fund for Future Generations, 129
retirement: age of, 59, 107–9; assets, 295; Bismarck and, 108–9; demographic change and, 104–6; early efforts at, 100–101; during eighteenth and nineteenth century, 101–4; funding, 8, 99–118; Great Depression and, 106–8; home equity as asset, 115; involuntary, 103; length of, 105–6; planning for, 115–16
retirement accounts: individuals and, 120–23; mutual funds in, 295; opportunities with, 92; shares through, 93
returns: dollar-weighted compared to buy-and-hold, 273–74; of hedge funds, 272–74; rate of return over cost, 232; risk-adjusted, 151–52
revenue streams, licensing of, 282
riba (increase or expansion), 37–38
Richard Whitney & Co., 164
risk, 238–47; avoidance of, 122–23; CAPM and, 243–45; common source of, 223; of defined benefit plans, 122–23; diversification and, 238–40; exchange rate fluctuation and default as, 84; fallibility and, 238; financial leverage and, 6; of hedge funds, 272–74; Markowitz on, 240–43; mortality, 132, 145; over cycle, 222; risk-adjusted returns, 151–52; risk management system, 173; risky types of lending, 39; tail, 240, 246–47; three-factor model, 245; Tobin on, 241–42
Rockefeller, John D., 126
Rome: endowments and foundations in, 56–57, 57; estate management in, 19–21; financial leverage in, 5; joint-stock companies in, 50–51; lending in, 27–28; pensions in, 58–59, 60; resource allocation in, 6; tutorship in, 58; usury in, 33–34
Royal Bank of Scotland, 183
Rule 501 of Regulation D, 259
Russell Sage Foundation, 125
Said Business School, 220
saltum (liquid assets), 52
savings, 134–37, 145; consumption and, 121–22; female servants and, 103, 134; history of, 131; interest rates and, 114, 135–36, 205; life-cycle, 106, 121, 134; rates, 78–79
savings and loan associations, 135–37; deregulation of, 136; real estate investments of, 136
savings and loan crisis of 1980s, 213
Scottish Enlightenment, 79–80
Second Industrial Revolution, 70; public markets and, 89; savings rates during, 79
securities: fixed income, 10, 134, 283; mortgage-backed, 217, 266, 323; price list for, 85–86; trade in goods compared to, 84
Securities Act of 1933, 141, 211; avoiding registration under, 260–61; Rule 501 of Regulation D of, 259; violations of, 180
Securities and Exchange Commission (SEC): Boesky and, 184, 186; filings, 212; insider trading and, 191–93; Madoff, B., and, 147, 149, 152–53; Market Surveillance Unit, 189; regulation and, 166, 180, 194–95, 259; reports to, 142; Rule 10b-5, 192
Securities Exchange Company, 157
Security Analysis (Graham and Dodd), 250
SEC v. Texas Gulf Sulphur, 193
self-interest, principle of, 69
semistrong-form efficiency, 249
separate account management, 137–39
Shakespeare, William, 239
shogun (commander in chief), 45
side pocket capabilities, 272
Singapore International Monetary Index (SIMEX), 170–72
Small Business Act of 1958, 278
Small Business Administration, 275
Smith, Adam: South Sea Bubble and, 68–69; theories of, 70, 79, 326; The Wealth of Nations, 36, 69
Social Security: private investment accounts, 116; private pensions and, 109–10; retirement age and, 59, 107
societas publicanorum, 51, 56, 64
speculation: art, stamps, coins, and wine, 283; in derivatives, 221; excesses, 197; impacts of, 232; value and, 4–5
split-strike conversion, 151–52
Stabilizing an Unstable Economy (Minsky), 214
Stagecoach Corporate Stock Fund, 284–85
Stanford Financial Group, 154
State Street Corporation, 299
State Street Global Advisors, 299
State Street Investment Trust, 141
statistical arbitrage, 267
stock exchanges: national or international, 94; new, 96; regional, 94–95
stock market: dislocations, 205; in England, 86–87; in Paris, 85
stock ownership: age and, 93–94; direct and indirect, 91, 93; gender and, 93–94; regulations prohibiting too much, 123; study of, 96; in United States, 90–94, 97
strong-form efficiency, 249
Studebaker-Packard Corporation, 111
sub hasta (public auction), 50
subprime-mortgage lending, 223
sugar consumption, in England, 75, 77
Sumerian city-states, 15–16
taksitum (total profit), 52
Tax Reform Act of 1969, 126
tegata (promissory notes), 46
Theory of Interest, The (Fisher), 231
Theory of Investment Value, The (Williams, J.), 4, 232
“Theory of Speculation” (Bachelier), 230
Tokistes, or Usurer, The (Alexis and Nicostratus), 24
Total Fitness Center, 154
total profit (taksitum), 52
totorum bonurum provisions, 52
trade: China and, 48; cities and, 42–43; commerce and, 8, 40–50; in goods compared to securities, 84; in India, 48–49; in Japan, 44–46, 60; Mediterranean Sea and, 41–42; in Mesopotamia, 41; rice, 45–46; in West, 40–42
trade associations, 48–49
trade clearing system, 174
trading frauds: Kerviel and Société Générale, 172–74; Leeson and Barings Bank, 170–72
transparency: lack of, 130; level of, 98, 126
Treasury: Great Recession and, 217–18, 225; policies of, 197
Troubled Assets Relief Program (TARP), 218
Truth in Securities Act, 211
ummianum (financier), 51–52
unemployment, rise in, 198
Uniform Management of Institutional Funds Act (UMIFA), 124
Uniform Prudent Management of Institutional Funds Act (UPMIFA), 124
United Auto Workers (UAW), 111–12
United Kingdom: GDP growth and, 75; mergers in, 182; stock ownership in, 96; venture capital in, 279.
usury: Asian societies and, 38–39; attitudes about, 8; in China, 39; Christianity and, 34–37; contemporary views of, 39; in Greece, 33; historical and religious views of, 33–34, 60; in India, 38–39; Islamic societies and, 37–38; Jews and, 34–35; in Mesopotamia, 33; in Rome, 33–34; world views on, 32–33
van Ketwich, Abraham, 140
Vix Pervenit: On Usury and Other Dishonest Profit (Benedict XIV), 37
Wall Street Reform and Consumer Protection Act, 220
War of Spanish Succession, 67
weak-form efficiency, 249
wealth: generation of, 75–77; intergenerational transfer of, 15; for investment managers, 303–8; land as foundation of investment and, 8; private wealth management, 137–39; reallocation of, 72
Wealth of Nations, The (Smith), 36, 69
“Who Holds the Wealth of Nations?” (Rozanov), 128
whole life insurance, 132
William and Flora Hewlett Foundation, 127
William III (king of England), 73, 97
William of Orange (stadtholder of Dutch Republic), 86
Wilsonian internationalism, 199
“World’s Largest Hedge Fund Is a Fraud, The” (Markopolos), 152
World War I: impacts of, 95, 162; inflation during, 198; transition out of, 197–98
World War II: bull market after, 92, 143; economy and, 275; impacts of, 96; mutual funds during postwar period, 142–44; price and wage fixing of, 110
Wujinzang (Buddhist temples’ wealth), 29
yield curves, aberrations in, 266
Zhiku lending institution, 29–30