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DISINTERMEDIATION: A general deterioration in the profitability of a bank because it pays high interest rates on short-term borrowing, but earns relatively low interest rates on long-term lending. This was a big, BIG problem for savings and loans (S&Ls) during the 1970s and ultimately caused many of them to fail in the 1980s. S&Ls were designed (by law) to make long-term (30-year) home loans to consumers, but to get the funds for these loans using standard savings accounts. When inflation and interest rates shot up in the 1970s, S&Ls found it necessary to pay savers higher rates to get the funds. But, they still had a bunch of home loans--with low interest rates--that were 15, 20, or 25 years from being repaid. For several years, S&Ls received 6 percent on many of their loans, but paid out something like 12 percent. This gradually eroded their profitability until many were forced to close their doors.
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CETERIS PARIBUS A Latin term meaning that other factors remain unchanged. Ceteris paribus is commonly used as an assumption when conducting a wide variety of economic analyses. By holding everything else constant, the ceteris paribus assumption makes it possible to identify the cause-and-effect relation between two factors. Relaxing the ceteris paribus assumption is the primary analytical technique used in the comparative statics study of economics.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store wanting to buy either a wall poster commemorating the first day of spring or a lazy Susan for you dining room table. Be on the lookout for cardboard boxes.
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This isn't me! What am I?
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A thousand years before metal coins were developed, clay tablet "checks" were used as money by the Babylonians.
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"I learned about the strength you can get from a close family life. I learned to keep going, even in bad times. I learned not to despair, even when my world was falling apart. I learned that there are no free lunches. And I learned the value of hard work. " -- Lee Iacocca
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SEBI
Bombay Stock Exchange (India)
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