Financial Accelerator
Categories: Investing, Managed Funds, Banking
It sounds like a product featured in a pre-roll YouTube ad, promising that you can turn $1,000 into $1 million by using their patented trading techniques. "I was eating dry Rice-A-Roni out of a box because I couldn't afford my water bill...but just six weeks using the patented techniques of the Financial Accelerator and I just bought my third Lamborghini!"
In reality, the term "financial accelerator" refers to a relationship that can exist between overall economic trends and the impact they have on the financial markets.
A country falls into recession. The stock market plunges as a result. Because the stock market plunges, the recession deepens.
That's the basic action behind the financial accelerator. Tough economic times lead to weakness in financial markets. The wealth lost and the confidence eroded by the falling markets further exacerbate the economic situation. There's a feedback loop between economic conditions and financial markets that can amplify the impact of a situation.
This process can work in the other direction as well. Strong economic conditions drive financial markets higher, creating additional wealth and confidence, which feed further economic growth...the financial accelerator working as a positive feedback loop.
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Finance: What are Angel Investors and Se...8 Views
Find it a la shma What are angel investors and
seed funds Just call me angel Thanks That's All right
It's early in the morning here and we just do
that sometimes Yeah All right Well an angel investor is
typically i'm sorry Won't sing again An angel Investors typically
someone who was wildly successful in an entrepreneurial venture of
their own They feel a kind of moral obligation to
recycle their winnings And in most cases very very early
stage companies are so extremely risky with failure rates over
ninety nine percent Well that it takes some kind of
angel to come in and invest the first few hundred
grand Get them started building that nose picking device the
world has always wanted no And since in most cases
very early start ups have absolutely no idea what they're
worth So many initial angel investments carry no price meaning
that there was only one term carried by the money
invested It will be valued at say a ten percent
or whatever number discount toe whatever valuation The next round
if there is one values the company at while the
first few million bucks into google by a small handful
Of already successful silicon valley types ended up being converted
into stock in their initial or a round which was
done at a whopping almost seventy million dollars It was
done at the height of the first internet bubble and
while timing is everything sometimes google's original investment netted it's
angel investors some ten thousand times their money and spawned
a whole many industry in angels getting together hoping tio
you know do more googles When angels pool their money
they create what is called a seed fund think seeds
planted in the ground to eventually bear fruit You know
like that And when seed investors are right yeah sometimes
they make that ten thousand times their money thing and
yahoo google facebook and a small handful of others all
live in this lofty world of ten thousand xers We're
on ly the loftiest of angels fly q's call me
change All right i'll stop Hey if you've got google
money and you can call me whatever you want No