Like the "free lunch" borrowing environment of 2003 and 2004, most assets yield more than dollars, encouraging leveraged borrowing of dollars to buy most other assets.
At the same time that safe assets fall in yield, the interest rates on riskier bonds will rise sharply.
Nipponese, old and young alike, are gradually taking their money out of the post office and moving it into higher-yield assets, like investment funds.
And a great antidote to deflation is current income: so investing in real assets that also provide yield is a double-purpose move.
However, with the global economic environment slightly improving in 2009, the yield on trading assets for FICC increased to 4.3%.
Today, insurance companies have an average of 12% of their assets in risk assets that include high-yield public equity, private equity and real estate equity.
The irony is that Japan won't be recycling its savings and trade surpluses abroad into high-yield foreign currency assets as much as in the past.
If the yield on these assets declines to around 2% on greater regulatory scrutiny, especially on higher margin businesses like derivatives, this reduces our price estimate by about 2%.
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That was splendid for the purchasers, but rather unwise of the life companies, which had no way of hedging their liabilities with fixed-interest assets with a similarly high yield.
That allows banks to use short-term funds raised from the sale of products to buy the longer-term assets that have the higher yield banks need to give investors the promised return.
Further monetary easing also helps gold since it adds to worries about inflation whenever an economic recovery takes hold, plus it means a low so-called opportunity cost, or the loss of interest earnings that investors might have gotten instead by holding yield-bearing assets.
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Where David Miles does see a large impact from QE is in the price - and implied yield - on other assets, notably corporate bonds.
The higher yield in the underlying assets of funds like EBND are of no help, because EBND is down 1.5% so far in September while the zero yield of the iShares 3-7y US Treasury Bond (IEI) fund is up 0.35% thanks to higher bond prices.
Secondly, the Fed holds long-term assets and short-term liabilities and yield curves generally slope upwards.
We forecast earnings for the equity division by looking at the assets deployed for trading and an estimated yield on these businesses.
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That's a nice way of saying that during recent years the Harvard Management Company, the university's investment subsidiary, diverted large portions of the university's endowment assets out of safe but poky low-yield securities (as of last June fixed-income investments accounted for only 16% of Harvard's portfolio) and into what this Forbes story describes as "exotic financial instruments": derivatives, hedge funds, private equity partnerships, commodities and emerging-market equities.
The yield on the note has fallen over the last month as demand for less risky assets increased following the crisis in Cyprus and signs of a slowdown in the U.S. The yield was as high as 2.06 percent on March 11.
Not a huge obstacle for yield seeking banks, especially if those assets are backed by the U.S government, but an obstacle that could give some banks pause.
With the exception of the late spring, when bad news from Europe caused a brief sell-off, investors have bid up stocks, high-yield bonds, and most other risk assets.
There are certain financial products that seem like a great way to boost yield and appear to be backed by solid assets.
When new assets come into an ETF that throws off a hefty yield, the dividends paid by the underlying companies must be spread over more investors.
We forecast earnings in the sales and trading division by looking at the assets deployed in the equity and debt markets and the yield the bank earns on this capital.
"There are few other opportunities for that level of yield in a quarterly dividend where the underlying assets are secured, and the duration is three months, " says Neuberger Berman fund manager, Joseph Lynch.
Also buying last week were the traditional yield-seeking investors globally, looking for outlets beyond assets at home that provide depressed returns due to artificially low interest rates.
More remarkable than the amount of Japanese household financial assets is their structure: 60 percent are in essentially zero-yield bank deposits.
Corporate-bond investors want assets that are least sensitive to rate rises, and shorter-dated high-yield bonds are the sweet spot, he said.
Low rates make it more difficult for pensions to find yield, which potentially creates new asset bubbles by pushing dollars into other assets, including various alternative assets.
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For example, if one had shifted assets out of the U.S. into a broad array of investible high yield countries with favorable freedom dynamics four years ago (slightly before the global credit crisis), he would have strongly outperformed the Dow Jones Industrial Average.
The embrace of risky assets drove investors out of U.S. Treasurys, which tumbled, pushing the yield on the benchmark 10-year note up to 1.958%.
Couple this with the realization that most IT assets are underutilized, it becomes clear that an efficiently designed and implemented data center can yield significant improvements in these compute ratios.
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