Pricing Corporate Bonds with Credit Risk, Liquidity Risk, and Their Correlation

This paper proposes a generalized bond pricing model, accounting for all the effects of credit risk, liquidity risk, and their correlation. We use an informed trading model to specify the bond liquidity payoff and analyze the sources of liquidity risk. We show that liquidity risk arises from reduced information accuracy and market risk tolerance, and it is market risk tolerance that links credit and liquidity. Then, we extend the traditional bond pricing model with only credit risk by incorporating liquidity risk into the framework in which the probabilities of the two risk events are estimated by a joint distribution. Using numerical examples, we analyze the role of the correlation between credit and liquidity in bond pricing, especially during a financial crisis. We document that the varying correlation between default and illiquidity explains the phenomenon of bond death spiral observed in a financial crisis. Finally, we take the US corporate bond market as an example to demonstrate our conclusions.

Multitarget Approach to Cardiogenic Shock after Acute Myocardial Infarction: Extracorporeal Life Support (ECLS) and Beyond

Cardiogenic shock following acute myocardial infarction is associated with high mortality, substantially unchanged for the previous 20 years. Several approaches have been sought to achieve a therapeutic breakthrough, from myocardial revascularization strategies to the use of mechanical circulatory support. Many issues are, as yet, unresolved. Systemic inflammation seems to play a key role but is still lacking in effective therapies, and is potentially compounded by the death spiral of hypoperfusion and/or artificial devices. In this review, a multitarget approach to cardiogenic shock following acute myocardial infarction is proposed.

The Emergence of Solar Photovoltaic Technology in Indonesia: Winners and Losers

As the solar energy technology has been more competitive recently, it is common to see studies which examined how solar photovoltaic can technically emerge in the energy system in Indonesia. However, less research is conducted to study how the emergence of solar photovoltaic might impact different stakeholders in the electricity market in Indonesia. The increase of solar photovoltaic deployment will create winners and losers among the main stakeholders which are: the consumers, the national electricity company (PLN), independent power producers (IPP), and the Government of Indonesia. This paper asserts that consumers in Indonesia who do not have access to the grid will get benefits from the solar photovoltaic competitive costs. The consumers who have access to grid, however, will be indifferent in their position. In the longer term, these consumers will face the death spiral unless PLN, forced by the regulation, takes the loss. PLN will face bankruptcy due to the loss unless they invest in the distributed energy resources infrastructure. IPP will not gain in position due to unsupportive government regulations. Moreover, solar photovoltaic IPP will be vulnerable due to the policies that support imbalanced competition among renewable energies. On the other hand, the government will get some advantages that support their political agenda during the proliferation of solar photovoltaic.

The traditional Afrikaans-speaking churches in dire straits

Christianity is entering another revolution or reformation phase. Five hundred years ago, Luther stood up against the Roman Catholic Church, which started the reformation and the reformed movement, culminating in the birth of the Reformed Churches (RC). Today these RCs are seemingly the victims of the new revolution. The traditional Afrikaans-speaking RCs in South Africa serve as a striking example. The symptoms of these churches correspond to those of a dying church, highlighted by scholars like Rainer, Noble, Niewhof and Mattera. Central to this situation is the fact that the relationship with God and his commandments is no longer the focus point of the churches. Thus, the identity crisis that the churches are experiencing is mirroring the chaotic South African society of violence, corruption and hopelessness. For these churches to turn the death spiral around, a reformation is needed that will transform them into alternative societies of peace and hope, founded on a living relationship with God. This article ends with suggestions on how to turn the tide for these churches, or at least how to start doing something positive to get out of the crisis.