Federal Home Loan Bank lending to community banks: are targeted subsidies necessary?

The Gramm-Leach-Bliley Act of 1999 extended the lending authority of Federal Home Loan Banks to include advances secured by small-enterprise loans of community financial institutions. The authors examine three possible reasons for the extension of this selective credit subsidy to community banks and thrifts, including the need to subsidize community depository institutions, stabilize the Federal Home Loan Banks, and address a market failure for small enterprise loans in rural banking markets. They use two empirical models to investigate whether funding constraints affect small-business lending decisions by rural community banks. The results reject the hypothesis that access to increased funds will increase the amount of small-business loans made by community banks.Small business ; Federal home loan banks

Effect of time delay on feedback control of a flashing ratchet

It was recently shown that the use of feedback control can improve the performance of a flashing ratchet. We investigate the effect of a time delay in the implementation of feedback control in a closed-loop collective flashing ratchet, using Langevin dynamics simulations. Surprisingly, for a large ensemble, a well-chosen delay time improves the ratchet performance by allowing the system to synchronize into a quasi-periodic stable mode of oscillation that reproduces the optimal average velocity for a periodically flashing ratchet. For a small ensemble, on the other hand, finite delay times significantly reduce the benefit of feedback control for the time-averaged velocity, because the relevance of information decays on a time scale set by the diffusion time of the particles. Based on these results, we establish that experimental use of feedback control is realistic.Comment: 6 pages, 6 figures, to appear in Europhysics Letter

The importance of financial market development on the relationship between loan guarantees for SMEs and local market employment rates

We empirically examine whether a major government intervention in the small-firm credit market yields significantly better results in markets that are less financially developed. The government intervention that we investigate is SBA-guaranteed lending. The literature on financing small and medium size enterprises (SMEs) suggests that small firms may be exposed to a particular type of market failure associated with credit rationing. And SMEs in markets that are less financially developed will likely face a greater degree of this market failure. To test our hypothesis, we use the level of bank deposits per capita as our relative measure of financial market development, and we use local market employment rates as our measure of economic performance. After controlling for the appropriate cross-sectional market characteristics, we find that SBA-guaranteed lending has a significantly more (less) positive impact on the average annual level of employment when the local market is relatively less (more) financially developed. This result has important implications for public policy directives concerning where SBA-guaranteed lending should be directed.Small Business Administration ; Financial markets ; Small business - Finance ; Employment

\u3ci\u3eGomphus Spicatus\u3c/i\u3e (Odonata: Gomphidae) Rediscovered in Illinois and \u3ci\u3eLibellula Semifasciata\u3c/i\u3e (Odonata: Libellulidae) Recorded Near Wisconsin

(excerpt) Gomphus spicatus Hagen (Odonata: Gomphidae), commonly called dusky clubtail, is a common and widely distributed dragonfly in a variety of ponds, lakes, and slow streams throughout its range in the north-eastern and northcentral United States and adjacent areas of southern Canada (Donnelly 2004)

Jupiter as a Giant Cosmic Ray Detector

We explore the feasibility of using the atmosphere of Jupiter to detect Ultra-High-Energy Cosmic Rays (UHECR's). The large surface area of Jupiter allows us to probe cosmic rays of higher energies than previously accessible. Cosmic ray extensive air showers in Jupiter's atmosphere could in principle be detected by the Large Area Telescope (LAT) on the Fermi observatory. In order to be observed, these air showers would need to be oriented toward the Earth, and would need to occur sufficiently high in the atmosphere that the gamma rays can penetrate. We demonstrate that, under these assumptions, Jupiter provides an effective cosmic ray "detector" area of $3.3 \times 10^7$ km$^2$. We predict that Fermi-LAT should be able to detect events of energy $>10^{21}$ eV with fluence $10^{-7}$ erg cm$^{-2}$ at a rate of about one per month. The observed number of air showers may provide an indirect measure of the flux of cosmic rays $\gtrsim 10^{20}$ eV. Extensive air showers also produce a synchrotron signature that may be measurable by ALMA. Simultaneous observations of Jupiter with ALMA and Fermi-LAT could be used to provide broad constraints on the energies of the initiating cosmic rays.Comment: 8 pages, 5 figures. Accepted for publication in the Astrophysical Journal Letter

On SBA-guaranteed lending and economic growth

Increasingly, policymakers are looking to the small business sector as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs. Encouraging lending to small business is the primary policy objective of the Small Business Administration (SBA) loan-guarantee program. Using a panel data set of SBA-guaranteed loans we assess whether SBA-guaranteed lending has an observable impact on local and regional economic performance.Small Business Administration ; Loans ; Small business

Dynamic magnetic reconnection in three space dimensions: Fan current solutions

The problem of incompressible, nonlinear magnetic reconnection in three-dimensional "open" geometries is considered. An analytic treatment shows that dynamic "fan current" reconnection may be driven by superposing long wavelength, finite amplitude, plane wave disturbances onto three-dimensional magnetic X-points. The nonlinear reconnection of the field is preceded by an advection phase in which magnetic shear waves drive large currents as they localize in the vicinity of the magnetic null. Analytic arguments, reinforced by detailed simulations, show that the ohmic dissipation rate can be independent of the plasma resistivity if the merging is suitably driven

SBA-loan guarantees and local economic growth

Increasingly policymakers are looking to the small business sector as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs. Encouraging lending to small business is the primary policy objective of the Small Business Administration (SBA) loan-guarantee program. Using a panel data set of SBA-guaranteed loans we assess whether SBA-guaranteed lending has an observable impact on local and regional economic performance.Small business ; Economic development ; Loans ; Small Business Administration

Small firm credit market discrimination, SBA-guaranteed lending, and local market economic performance

We empirically test whether SBA-guaranteed lending has a greater impact on economic performance in markets with a high percentage of potential minority small businesses. This hypothesis is predicated on priors related to three overlapping assumptions. These three assumptions are: (1) The classic type of credit rationing developed in the seminal paper by Stiglitz and Weiss (1981) is more likely to occur in markets with a higher per capita percentage of minority small businesses because such markets are more likely to have more severe information asymmetry problems, (2) SBA-guaranteed lending is likely to reduce these credit rationing problems—thus improving the level of development of the local financial market, and (3) increased local financial market development helps to lubricate the wheels of economic performance (Rajan and Zingales, 1998). Using local labor market employment rates as our measure of economic performance, we find evidence consistent with this proposition. In particular, we find a positive and significant impact on the average annual level of employment in a local market of SBA-guaranteed lending in that local market. This impact is 200 percent larger in markets with a high percentage of potential minority small businesses. This result has important implications for public policy in general and SBA-guaranteed lending in particular.Small business - Finance ; Small Business Administration ; Discrimination in consumer credit

Exact solutions for steady-state, planar, magnetic reconnection in an incompressible viscous plasma

The exact planar reconnection analysis of Craig and Henton [Astrophys. J. 450, 280 (1995)] is extended to include the finite viscosity of the fluid and the presence of nonplanar components in the magnetic and velocity fields. It is shown that fast reconnection can be achieved for sufficiently small values of the kinematic viscosity. In particular, the dissipation rate is sustained by the strong amplification of planar magnetic field components advected toward the neutral point. By contrast, nonplanar field components are advected without amplification and so dissipate energy at the slow Sweet–Parker rate