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The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators and academics. Some sources note that speculation is simply a higher-risk form of investment. Others define speculation more narrowly as positions not characterized as hedging. [3]
A recent example is the Troubled Asset Relief Program (TARP), signed into law by U.S. President George W. Bush on 3 October 2008 to provide a government bailout for many financial and non-financial institutions who speculated in high-risk financial instruments during the housing boom condemned by a 2005 story in The Economist titled "The ...
The Great Crash, 1929 is a book written by John Kenneth Galbraith and published in 1955. It is an economic history of the lead-up to the Wall Street crash of 1929.The book argues that the 1929 stock market crash was precipitated by rampant speculation in the stock market, that the common denominator of all speculative episodes is the belief of participants that they can become rich without ...
The speculative or asset demand for money is the demand for highly liquid financial assets — domestic money or foreign currency — that is not dictated by real transactions such as trade or consumption expenditure. Speculative demand arises from the perception that money is optimally part of a portfolio of assets being held as investments.
During this time, speculation was the investment of choice, leading to the Panic of 1792. Former Continental Congressman William Duer raised large sums of money to invest in bank stock and government securities, novel and financially sophisticated assets whose risks many contemporaries failed to understand.
Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system. [6]Financial capitalism is thus a form of capitalism where the intermediation of saving to investment becomes a dominant function in the economy, with wider implications for the political process and social evolution. [7]
In economics, a speculative attack is a precipitous selling of untrustworthy assets by previously inactive speculators and the corresponding acquisition of some valuable assets (currencies, gold). The first model of a speculative attack was contained in a 1975 discussion paper on the gold market by Stephen Salant and Dale Henderson at the ...
The European liquidation of American securities in 1914 (also called the financial crisis of 1914) was the selloff of about $3 billion (equivalent to $91.26 billion in 2023) of foreign portfolio investments at the start of World War I, taking place at the same time as the broader July Crisis of 1914.