Mina Mar Group

Dodd-Frank Wall Street Reform and Customer Protection Act  was signed into law in 2010 as a response to financial crisis of 2008 by targeting sectors that caused the crisis, banks, mortgage lenders and credit reporting agencies. It reshaped U.S. regulatory system, especially financial sector. From the beginning Dodd-Frank received  criticism that it limits growth potential of financial firms and lovers overall market liquidity. On February 3, 2017 Donald Trump signed an executive order that asked the U.S. Treasury to propose Dodd-Frank changes and a year later on May 24, 2018 President signed into law Economic Growth, Regulatory Relief and Consumer Protection Act. With this Act, Dodd-Frank wasn't repealed but some of its regulations were loosened. Consumer Financial Protection Bureau still has the control over mortgage lending and credit reporting agencies. It was argued that regulations proposed by Dodd-Frank impose a burden on community banks and ...

Futures contract or just futures is an agreement between two parties to buy or sell assets at a predetermined price at a specified date in the future. Underlying asset can be stock market index, currencies or most common commodities - oil. gasoline and gold. Buyer of the future has the obligation to buy the underlying asset when the future contract expires just like the seller has the obligation to provide the asset at the expiration date. Futures that are traded on commodity future exchanges are more standardized and regulated like Chicago Mercantile Exchange or  New York Mercantile Exchange. Standardized contract means that for instance, one future oil contract is for 1,000 of oil and one gold contract is for 100 troy ounces of gold. The Commodities Futures Trading Commission regulates the exchanges and require buyers and sellers to be registered. Futures are used by two types of market participants - hedgers and speculators. Guarantees to buy or sell at a cert...

Derivative is very complex complex to explain but at its most it is financial contract between two or more parties and it derives its price from an underlying asset. Basically buyer agrees to purchase the asset on a specific date at a specific price. There are numerous types of derivatives and underlying assets can be almost anything but the most common are commodities (oil, gasoline, oil), currencies, stocks, bonds, interest rates and market indexes. They can be traded on unregulated over-the-counter market where transactions happen between private parties or they can be traded on exchange where they are highly regulated and standardized. Bear in mind that OTC constitutes major portion of  derivative market and it caries great counterparty risk - possibility that one of the parties involved might default. Common derivatives are options, futures,swaps and forwards.  Options give the buyer right but not the obligation to sell or purchase underlying asset at a ce...

Sarbanes - Oxley Act is the United States federal law that amended and supplemented existing requirements in corporate financial reporting and accounting practices. Commonly called SOX Act was signed into law by President Bush on July 30, 2002. After highly publicized corporate financial scandals including Enron and WorldCom the purpose of the Act was to restore investor's shaken confidence in the market and truthfulness of corporate financial statements and close loopholes in the law that led to fraud. The Act that got the name from two sponsors Sen. Paul S. Sarbanes and Rep. Michael G. Oxley created strict new rules for accountants, auditors, corporate officers and more strict record keeping requirements. Also it added new, more stringent criminal penalties for violation of this law. The new law set out reforms in four principle areas: corporate responsibilities, criminal punishment, accounting regulations and new protections. SOX is a lengthy and complex peac...

Stock market correction happens when the market falls 10% or more from it recent peak. Correction can occur in securities or any other asset class. To knew investors this may come as a big surprise but corrections are natural part of market cycle that happen often and they can even strengthen the market. It is caused by certain events that triggers selling but market usually makes up loses in couple of months. Correction is not the same as the stock market crash. Correction happens when fall of 10% manifests itself over days, weeks or months while stock market crash happens when price drops by 10% in one single day. Stock market is one of the main indicators of economic health since buying and selling of securities is based on investors projections, whether they have positive or negative expectations of future market movements. Corrections don't last long, usually it is three or four months and they can happen more than once a year. They happen during expansion phase and i...

Bull market is market trend when price of assets or securities rise by 20%, an opposite from bear market. The term bull market is usually used when talking about securities but the term applies to anything that can be traded, real estate, currencies and commodities . During bull market all three major stock indexes, S&P 500, Nasdaq and Dow Jones Industrial Average rise. Bull market happens in healthy economy and is characterized by investor confidence and optimism. The term can be also applied to investors, ones that have optimistic view of the market is called bull or bullish. On the other hand investors with pessimistic view of the market are called bears or bearish. Natural rise and fall of economic growth over time is known as business cycle and it has four phases: expansion phase, peak, contraction and through. Bull market happens during expansion phase when economy is growing with strong GDP, with drop in unemployment and strong corporate profits. In stock market...

Bear market is defined as a market trend in which price of securities fall 20% or more from previous market peak and last two months or longer. Usually bear market is caused bu declining economic activity caused by a change in monetary policy. Recession is accompanied by low employment. Stock market crash, drop in stock price of 10% or more in just a day or two can cause bear market and negative investor sentiment. It can occur in any asset class, stocks, bonds, currencies and commodities or section of industry. In stocks bear market is measured by indexes like Dow Jones, S&P 500 and Nasdaq, if they are continuing to lower over period of time. Bear market can be recognized through observation of business cycles. It is the opposite of bull market or expansion phase when asset price continue to grow over time. sometimes corrections, less severe decline in price that lasts less than two months. Investors use different steps to protect themselves like increasing amount of cash...

Special purpose vehicle/entity (SPV/SPE) is separate legal entity created by an  organization for specific, often narrow and temporary purpose, typically to isolate company from financial risk, including bankruptcy.It can be understood as subsidiary of larger company but it has its own assets and liabilities. There are several uses of special purpose vehicles. Because every project carries certain amount of risk parent company will use SPV to shield itself from risk in a legal way. This way companies can execute large financial projects without putting the whole firm at risk. Securitization of loan is another common usage of SPVs. It is used when banks that issue mortgage-backed securities whose payment comes from pool of loans. In order to ensure that investors in mortgage-back securities are payed first bank will establish SPV, separating it from other obligations and giving it a priority in payment. Management of assets with exceptionally complex financial ...