If I asked you for $100 and your mother asked you for $100, you'd charge me more interest, because I'm [hopefully] a higher risk [from your point of view].
The interest paid on bonds is directly related to the risk of holding the bond (or, the perceived risk). A high interest rate (which the government pays) is the only way the government can get people to buy its bonds, because it's considered a high risk.
It pretty much means that, people aren't expecting Greece to be able to pay back its debt in 2 years. Which is really bad, normally, short term bonds have lower rates (because the risk is lower)...but now, even at 2-years, people see huge risk.
People want 75% interest on, what is essentially, a 2 year loan. Compare that to other parts of the world where you're taking 3% on 20 years....20 years is a long time, anything can happen, but even over such a huge difference in time scale, greece is a much, much, higher risk.
Yes. It's kind of a "double-or-nothing" casino game.
The yield is determined by the free market, it's the amount that Greece has to (promise to) pay for anyone to take them. It's not determined by a formula afaik, just based on current events and the state of the country's finances.
I don't think you can invest (or rather, speculate, this is too crazy to call investing) in these as normal retail investor though.
To be clear, the yield is determined by the free market as the price they pay for the bond. If the bond was originally priced at $100, with a 1% coupon payment (the amount the government or bond issuer will pay you in interest), if the resale value goes down to $50 in the open market, then the yield has doubled to 2%, since a new owner of the bond only had to pay $50 to get the same $1 coupon payment while holding the bond.
Regardless of whether the bond has a coupon payment or not the face value of the bond is due at maturity. In your example the $1 coupon is still paid but in two years you also get $100 back on your $50 purchase (netting 20+%apy).
Of course if the government defaults on your bond you get maybe on $1 coupon and end with a net loss of $49.
The word is "layman's". Lehman Brothers is the investment bank that collapsed in 2008. Cute typo.
The simplest translation, though: The market believes that if you were to loan money to Greece for two years, there's only about a 33% chance that you'll get your money back.
(That's 1.74^(-2) assuming risk-neutrality and a risk-free rate of 0%, which is depressing but sure makes calculations easier. In reality, the math is much more complicated, as nobody is actually neutral to asset risk, and you have to consider pseudo-defaulting via inflation, and the fact that bonds aren't entirely worthless after a default, etc.)
Greek debt is around $240 billion and Lehman assets were around $613 billion.
Of course, that number does not even consider that countries only partially and temporarily default, instead of fully and permanently like limited corporations, and that everyone who owns Greek debt has had a generous advance warning. This is really a comparatively minor crisis.
To me, a country defaulting sounds worse than a bank going under. Does the inability of Greece to raise capital have greater indirect costs and knock-on effects than the failure of Lehmans?
Sure. This is a HUGE opportunity to make a buck! BUY, BUY BUY!! No cash, borrow and BUY! Leverage baby leverage! Were going to make a killing on this! Oh... sorry, I see you actually meant layman's...
It'll be pretty bad because regulators have dealt with failing banks before but the EU has never had to deal with a member state defaulting and does not really have any institutions to deal with it. I'd says this disaster will probably end up being about 10 Lehmans in magnitude, though the fall of the Lehman brothers was only part of the financial crisis.
The collapse of Lehman brothers was an event that threatened the stability of the global financial system. The default of Greece is a minor nuisance that is mainly relevant because of fear that Italy and Spain might be next.
* If it's only for authors, the form should clearly state that at the beginning. Not just loosely imply it by using the phrase "your textbook," which could easily mean one that the reader owns or uses.
* There should be a link to a form where regular visitors (non-authors) can submit books. It would be more appropriate for their staff to follow-up with authors anyway at that point, once given the leads.
Say I figure out which people are influencing sales more than others, what should I do with that data? Maybe get with these people to have them share more often.
You could offer them a coupon to share with their followers, reach out to them for feedback, etc.. Once you have the data there are a lot of possibilities.
This is sweet. Too bad I don't know rails...it's on my todo list though. Would love to get this same functionality setup for my site, nicestperson.com but sadly this is written in PHP (which apparently was the language that cave men coded in). I love the name auto fill functionality too. Works really fast. Great job!
Facebook has an SDK written in PHP so you should be able to work with that. It's pretty simple if you follow the examples. As of yet there is no official SDK for Ruby though the unofficial implementations are pretty decent and easy to work with.
