Third, leveraging only gives you an advantage to the extent that you can earn a higher return on
your assets than your debt costs — so in effect points # 2 and # 3 are two ways of looking at the same thing, not two different benefits of leverage.
Then we acknowledge that they are high, but we point out that the sovereign has more
assets than debt.
What debtors don't understand is that bankruptcy is often more about
your assets than your debts.
Not exact matches
It offers a rare light of hope for young people with more
debts than financial
assets.
Of a $ 5 - million loan consolidation to refinance his firm, Matrix
Asset Management, he told me more
than a year ago, «Once we get the transaction out of the way, then all of our
debt falls away.»
Even though the Massachusetts filers owed substantially more in unsecured
debt (that is,
debt not backed by a home, a car, or another
asset)
than their counterparts in other states, they reported less
than half as much medical
debt, which is also unsecured.
Bond investors like mutual funds and pension funds hope to buy securities with comparatively higher yields
than other
asset - backed
debt that could also provide diversification benefits.
When prices collapsed, so did demand because too many consumers were stuck with
debts worth more
than their
assets.
It is the latest in a series of setbacks for 1MDB, which has been offloading
assets to cut a
debt load that ballooned to more
than $ 11 billion by 2015.
The fund is undergoing a «rationalization» program, launched in May, to reduce its
debt of more
than $ 11 billion by selling
assets.
They usually pay good dividends, usually trade for less
than their cash or
assets in the bank, and are fairly stable (it's very hard for a municipality to not pay back its
debts for various reasons, some of them constitutional).
April 23 (Reuters)- Barrick Gold Corp reported a slightly better
than expected increase in first - quarter adjusted profit on Monday and said it was done selling
assets to cut
debt and would instead use funds from any future sales to boost growth or pay dividends.
Meanwhile, if you are younger
than 59 1/2 and turn to your retirement
assets to pare down
debt, you will pay an early - withdrawal penalty of 10 percent unless you meet one of a few exceptions.
If a company like iHeart gets in trouble and someone else want its
assets, rather
than buying the shares, they often buy the
debt (bonds and loans) at a big discount.
Of course, with
debt in 2016 rising by roughly 40 — 45 percentage points of GDP while nominal GDP grew by less
than 8 percent, it isn't easy to explain how the real value of
assets in China grew by roughly 40 — 45 percentage points of GDP, nor why it is proving so difficult to rein in credit growth without a sharp slowdown in GDP growth.
Debt leveraging inflates property prices, creating (6) hopes for capital gains, prompting buyers to take on even more debt in the speculative hope that rising asset prices will more than cover the added interest, which is paid out of capital gains, not out of current inc
Debt leveraging inflates property prices, creating (6) hopes for capital gains, prompting buyers to take on even more
debt in the speculative hope that rising asset prices will more than cover the added interest, which is paid out of capital gains, not out of current inc
debt in the speculative hope that rising
asset prices will more
than cover the added interest, which is paid out of capital gains, not out of current income.
With long - term
debt financing, the scheduled repayment of the loan and the estimated useful life of the
assets extends over more
than one year.
Long - term
debt should be less
than 40 % of total capital, and the current ratio (current
assets divided by current liabilities) should exceed 2.0.
Of course if the value of
debt rises faster
than the value of
assets, by definition wealth (equal to equity, or net
assets, in a corporate entity) must decline.
A company with negative working capital (more liabilities
than assets) is generally seen as being in financial risk for increased
debt (which may lead to bankruptcy).
In order to operate effectively, a company should have more
assets than liabilities to ensure that it has enough
assets to pay its short - term
debt.
The 2013 survey also suggests that hedging ratios for foreign equity
assets were lower
than those of foreign
debt assets, which is also consistent with the results of the 2013 National Australia Bank Superannuation FX Survey (NAB Survey; NAB 2013).
So many mortgages, so many
assets and so many banks themselves have negative equity — that is, they owe more
debt than their
assets are worth — that there is no point in buying
assets right now.
Control
asset companies produce more volatile returns for their shareholders
than do investment companies not employing
debt financing.
If we do need to move in the direction of giving
asset price and
debt developments more weight in the conduct of monetary policy
than hitherto, we need to educate our respective communities about these issues.
If you are providing evidence of your accreditation on the basis of having over $ 1 million in net
assets, the company you are investing in is required to verify your
debts in order to confirm that your net
assets are greater
than $ 1M.
The system threatens to collapse in such a way that will leave a legacy of financial cleanup costs for the bad
debts that form the counterpart to the economy's «bad savings», that is, savings lent to speculators who use the money simply to buy existing properties rather
than to create new
assets.
What is to stop U.S. banks and their customers from creating $ 1 trillion, $ 10 trillion or even $ 50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other
assets for sale, in the hope of making capital gains and pocketing the arbitrage spreads by
debt leveraging at less
than 1 % interest cost?
-- Goethe What is to stop U.S. banks and their customers from creating $ 1 trillion, $ 10 trillion or even $ 50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other
assets for sale, in the hope of making capital gains and pocketing the arbitrage spreads by
debt leveraging at less
than 1 % interest cost?
If you have more
debts than you do
assets, you have a negative net worth.
That valued the Dodsland
assets at 15 times
debt - adjusted cash flow, which was more
than twice the valuation of recent sales.
Commercial financing programs such as mezzanine financing,
asset - based lending, equipment financing, and much more can help make buying and furnishing a franchise much easier
than paying out of pocket or going into
debt by taking out bank loans.
No
asset may prove more prescient
than the heart of the QE distortion: corporate
debt.
Prices are sharply lower
than all - time highs above $ 1,900 in 2011, when a worsening
debt crisis in Europe sparked buying of safe haven
assets.
The
debt that is currently sloshing around global markets may become more of a liability
than an
asset.
They teach the tactics of
asset stripping and how to replace industrial engineering with financial engineering, as if financialization creates wealth faster
than the
debt burden.
Calumet Specialty Products Partners is interesting in that some of its
assets have promise, but are burdened by other cash - burning segments of its business and the massive
debt that costs it more
than double its operating cash flows:
That statement would clearly be more reassuring to Americans had not the largest bank in the U.S. in 2008, Citigroup, blown itself up while lying to the public and its shareholders about its exposure to subprime
debt and holding more
than $ 1 trillion in
assets off its balance sheet.
I actually think something else is going on here — rather
than talking about regulating the financial sector, the government and the Bank are signaling that they are willing to provide lender - of - last - resort assurances to those who sell or engage in derivative financial products, of which the
asset - back mortgage and commercial
debt are but two examples.
In normal times, Section 18 of the Act says the Bank can only buy (or sell) certain types of
assets — coins, foreign currencies, federal and provincial / territorial
debt,
debt issued by the U.S., Japan or the European Union, International Monetary Fund (IMF) special drawing rights, and bills of exchange or promissory notes issued by a bank or authorized foreign bank provided they have a maturity of no more
than 180 days.
Even when governments borrow to spend on bridges and highways rather
than programs, the
debt is still not connected to a marketable
asset.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage - backed bonds and other complex
debt securities such as collateralized loan obligations in all markets for more
than three years... The unit made a deliberate move out of safer
assets such as US Treasuries in 2009 in an effort to increase returns and diversify investments.»
When borrowing is cheap, firms will take on more
debt to invest in hiring and expansion; consumers will make larger, long - term purchases with cheap credit; and savers will have more incentive to invest their money in stocks or other
assets, rather
than earn very little — and perhaps lose money in real terms — through savings accounts.
They understandably wanted yields higher
than the Treasury was paying, as the Fed was flooding the economy with credit to keep
asset prices afloat to save the banks from having to take loan write - downs and admit that
debt creation was not really the same thing as Alan Greenspan euphemized in calling it «wealth creation.»
Still, with less
than $ 100 million in
debt due before 2020, Barrick executives said the company is shifting to a growth strategy, focusing on Nevada and the Dominican Republic, and will no longer sell
assets in order to reduce its billions of dollars in
debt.
The past several years have featured little more
than a gigantic
asset swap, the short description being that massive volumes of government
debt have been swapped by central banks for massive volumes of idle bank reserves, while massive volumes of low - yielding, covenant - lite
debt have been issued into the hands of yield - seeking investors, in order to retire massive volumes of corporate equities at elevated valuations through buybacks.
According to the study that was just recently conducted by the Soccerex Football Finance 100, which ranks the world's top teams based on both their playing and fixed
assets, money in the bank, owner potential investment and
debt, Arsenal has more financial power
than those big clubs:
The value of public commercial
assets is on the same order of magnitude as annual global GDP, and comfortably higher
than global public
debt.
Liu pointed to the European
debt crisis as «the single most significant risk to the city's economy this year,» and said that even a mild European recession would be bruising, since European banks have more
than a trillion in
assets in New York City offices and employ approximately 45,000 people here.
- Administering the New York State and Local Retirement System for public employees, with more
than one million members, retirees and beneficiaries and more
than 3,000 employers; - Acting as sole trustee of the $ 129 billion Common Retirement Fund, one of the largest institutional investors in the world; - Maintaining the State's accounting system and administering the State's $ 12.6 billion payroll; - Issuing reports on State finances; - Managing the State's
assets and issuing
debt; - Reviewing State contracts and payments before they are issued; - Conducting audits of State agencies and public benefit corporations; - Overseeing the fiscal affairs of local governments, including New York City; - Overseeing the Justice Court Fund and the Oil Spill Fund Acting as custodian of more
than $ 9 billion in abandoned property and restoring unclaimed funds to their rightful owners;