Intermediary Asset Pricing He, Zhiguo; Krishnamurthy, Arvind
The American economic review,
04/2013, Letnik:
103, Številka:
2
Journal Article
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We model the dynamics of risk premia during crises in asset markets where the marginal investor is a financial intermediary. Intermediaries face an equity capital constraint. Risk premia rise when ...the constraint binds, reflecting the capital scarcity. The calibrated model matches the nonlinearity of risk premia during crises and the speed of reversion in risk premia from a crisis back to precrisis levels. We evaluate the effect of three government policies: reducing intermediaries borrowing costs, injecting equity capital, and purchasing distressed assets. Injecting equity capital is particularly effective because it alleviates the equity capital constraint that drives the model's crisis.
We evaluate the effect of the Federal Reserve's purchase of long-term Treasuries and other long-term bonds (QE1 in 2008-09 and QE2 in 2010-11) on interest rates. Using an event-study methodology, we ...reach two main conclusions. First, it is inappropriate to focus only on Treasury rates as a policy target, because quantitative easing works through several channels that affect particular assets differently. We find evidence for a signaling channel, a unique demand for long-term safe assets, and an inflation channel for both QEl and QE2, and a mortgage-backed securities (MBS) prepayment channel and a corporate bond default risk channel for QE1 only. Second, effects on particular assets depend critically on which assets are purchased. The event study suggests that MBS purchases in QE1 were crucial for lowering MBS yields as well as corporate credit risk and thus corporate yields for QE1, and Treasuriesonly purchases in QE2 had a disproportionate effect on Treasuries and agency bonds relative to MBSs and corporate bonds, with yields on the latter falling primarily through the market's anticipation of lower future federal funds rates.
I describe two amplifications mechanisms that operate during crises and discuss the benefits of policy given each mechanism. The first mechanism involves asset prices and balance sheets. A negative ...shock to agents' balance sheets causes them to liquidate assets, lowering prices, further deteriorating balance sheets and amplifying the shock. The second mechanism involves investors' Knightian uncertainty. Unusual shocks to untested financial innovations increase agents' uncertainty about their investments, causing them to disengage from markets and amplifying the crisis. Liquidity provision by the central bank alleviates the crisis in both mechanisms. Ex ante policies such as liquidity/capital requirements may also be beneficial.
Severe flight to quality episodes involve uncertainty about the environment, not only risk about asset payoffs. The uncertainty is triggered by unusual events and untested financial innovations that ...lead agents to question their worldview. We present a model of crises and central bank policy that incorporates Knightian uncertainty. The model explains crisis regularities such as market-wide capital immobility, agents' disengagement from risk, and liquidity hoarding. We identify a social cost of these behaviors, and a benefit of a lender of last resort facility. The benefit is particularly high because public and private insurance are complements during uncertainty-driven crises.
Oral Tongue Squamous Cell Carcinoma (OTSCC), a distinct sub-group of head and neck cancers, is characteristically aggressive in nature with a higher incidence of recurrence and metastasis. Recent ...advances in therapeutics have not improved patient survival. The phenomenon of occult node metastasis, even among the purportedly good prognosis group of early-stage and node-negative tongue tumors, leads to a high incidence of locoregional failure in OTSCC which needs to be addressed. In the current study, transcriptome analysis of OTSCC patients identified the key genes and deregulated pathways. A panel of 26 marker genes was shortlisted and validated using real-time PCR in a prospective cohort of 100 patients. The gene expression was correlated with clinicopathological features including occult node metastasis, survival, and therapeutic outcome. The up-regulation of a panel of 6 genes namely, matrix metalloproteinase 9 (MMP9), Laminin subunit Gamma 2 (LAMC2), Desmoglein 2 (DSG2), Plasminogen Activator Urokinase (PLAU), Forkhead Box M1 (FOXM1), and Myosin 1B (MYO1B) was associated with failure of treatment in the early stage (T1, T2). Up-regulation of Tenacin C (TNC) and Podoplanin (PDPN) was significantly correlated with occult node positivity. Immunohistochemical analysis of LAMC2, MMP9, and E-Cadherin (ECAD) confirmed these markers to be indicators of poor prognosis. We propose this panel of valuable prognostic markers can be clinically useful to identify poor prognosis and occult node metastasis in OTSCC patients.
The coronavirus disease 2019 (COVID-19) pandemic has caused and continues to cause a great deal of morbidity and mortality among patients worldwide. The unrelenting pandemic has raised important ...issues with regard to the need for rationing healthcare services in general and oncology care in particular, in the context of strained resources and crisis-handling capacity. The management outcomes of cancer patients amidst the COVID-19 pandemic are not well characterised, and we review the limited available evidences in this regard. These evidences seem to suggest that it is wise to continue standard cancer treatments especially so for patients who test negative for COVID-19 amidst the pandemic, unless there is a compelling reason to consider a deviation. The final decision for starting, delaying or deviating from the standard protocols should ideally be made as a part of a shared multidisciplinary decision-making process and should further be individualised for each patient. Although the exact magnitude of the disruptions on cancer care is difficult to quantify as yet, the oncology community will have to study and introspect on the collateral damage caused by the COVID-19 pandemic on the long-term outcomes of cancer patients. The world has witnessed many prior pandemics and humanity has survived them all and has eventually emerged stronger, and we hope that this time it will be no different. The need of the hour is for the scientific community to rise, learn from this unprecedented experience and align together towards creating a stronger and safer future.
Oral Tongue Squamous cell carcinoma (OTSCC), the most frequently affected oral cancer sub-site, is associated with a poor therapeutic outcome and survival despite aggressive multi- modality ...management. Till date, there are no established biomarkers to indicate prognosis and outcome in patients presenting with tongue cancer. There is an urgent need for reliable molecular prognostic factors to enable identification of patients with high risk of recurrence and treatment failure in OTSCC management. In the current study, we present the meta-analysis of OTSCC microarray based gene expression profiles, deriving a comprehensive molecular portrait of tongue cancer biology, showing the relevant genes and pathways which can be pursued further to derive novel, tailored therapeutics as well as for prognostication. We have studied 5 gene expression profiling data sets available on exclusively oral tongue subsite comprising of sample size; n = 190, consisting of 111 tumors and 79 normals. The meta- analysis results showed 2405 genes differentially regulated comparing OTSCC tumor and normal. The top up regulated genes were found to be involved in Extracellular matrix degradation (ECM) and Epithelial to mesenchymal transition (EMT) pathways. The top down regulated genes were found to be involved in detoxication pathways. We validated the results in clinical samples (n = 206), comprising of histologically normals (n = 10), prospective (n = 29) and retrospective (n = 167) OTSCC by evaluating MMP9 and E-cadherin gene expression by qPCR and immunohistochemistry. Consistent with meta-analysis results, MMP9 mRNA expression was significantly up regulated in OTSCC primary tumors compared to normals. MMP9 protein over expression was found to be a significant predictor of poor prognosis, disease recurrence and poor Disease Free Survival (DFS) in OTSCC patients. Analysis by univariate and multivariate Cox proportional hazard model showed patients with loss of E-cadherin expression in OTSCC tumors having a poorer DFS (HR = 1.566; P value = 0.045) and poorer Overall Survival (OS) (HR = 1.224; P value = 0.003) respectively. Combined over-expression of MMP9 and loss of E-cadherin membrane positivity in the invasive tumor front (ITF) of OTSCC had a significant association with poorer DFS (Log Rank = 16.040; P value = 0.001). These results suggest that along with known clinical indicators of prognosis like occult node positivity, assessment of MMP9 and E-cadherin expression at ITF can be useful to identify patients at high risk and requiring a more intensive treatment strategy for OTSCC. Meta-analysis study of gene expression profiles indicates that OTSCC is a disease of ECM degradation leading to activated EMT processes implying the aggressive nature of the disease. The triggers for these processes should be studied further. Newer clinical application with agents that can inhibit the mediators of ECM degradation may be a key to achieving clinical control of invasion and metastasis of OTSCC.
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