Institutional investors such as pension funds regard European venture capital as a bad asset class.
Paulson's bad-asset rescue plan would join a bunch of other proposals now circulating Washington.
Moreover, the new plan may not be big enough to deal with the bad-asset problem.
And without universal accounting standards, perhaps imposed by the Financial Accounting Standards Board, we may never know how bad the toxic asset situation is.
Warren Buffett has long been resistant to gold fever, frequently dismissing the yellow metal as an investment because it produces no income, most recently bad-mouthing the asset in his annual Berkshire Hathaway shareholder letter.
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Banks are riddled with bad loans from a collapse in asset prices.
That is not bad for a risk-free asset with a maturity of one to six years in theory, and often only a few months in practice.
The collapsing danger asset price problem would be bad enough, but soon it is joined by some others.
But the Detroit rescue by the Troubled Asset Relief Program was a bad deal from start to finish.
We have always said Alchemy was bad news for this plant - they are asset strippers who intended to sell off the best bits and leave people out of work.
It almost goes without saying that no investment asset is either inherently good or inherently bad.
It has also invited domestic banks, foreign banks such as Merrill Lynch, and even the best domestic corporations, to invest in asset-management companies that would buy bad loans to liquidate them at a profit.
As a first step, their bad debts are being transferred to four state-approved asset-management companies, although it is not clear what these companies will then do with them.
It is also creating a facility, supported by the Federal Reserve, for asset-backed securities which could relieve banks of bad loans.
So far, only a few governments have made moves towards dealing with their toxic assets: the U.K.'s asset protection program insures banks against future losses on bad assets but in return requires pledges that participating institutions increase domestic lending.
Its loans will be transferred to the National Asset Management Agency (Nama), the Irish "bad bank" responsible for recovering the value of problematic loans made by other Irish banks.
Indeed, when Domestic Asset Protection Trusts were first introduced, probably a majority of the (relatively few) asset protection planners thought they were in the nature of a bad joke.
And if a poor-performing parent lands in Chapter 11, taking its dynamo of a sub with it, that's too bad for the sub's investors, since the sub is an asset of the parent.
The central government, in response to the 1990s crisis, took bad loans off the books of the four largest banks by having newly formed asset management companies buy troubled assets at above-market values.
Also on June 9th, the Congressional Oversight Panel published a report that questioned the stress tests' reliance on banks' own data and their failure to capture the full risks in asset classes, particularly commercial property, that are only now going bad.
The bad news is that, as the financial markets recovered, the positive correlation across asset categories has continued.
Without boring you in academia, one of the assumptions in the theory suggests that companies and asset classes have a natural, repeating cycle in which good performance begets bad performance and vice-versa.
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What we need is for the Fed and the Administration to unleash capital trapped in bad real estate to restart sustainable job creation and economic growth in this new, asset-light, Internet-based world.
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In 1999 the finance ministry decided to set up four asset-management companies, one for each bank, to deal with the bad loans.
Two new entities will be created: the Financial Restructuring Agency (FRA), which will rescue ailing finance companies and banks, and the Asset Management Corp. (AMC), which is tasked with taking over bad loans.
"After so many bad days, investors celebrated a little, " said Ed Peters, chief investment officer at PanAgora Asset Management in Boston.
"Asset quality is deteriorating to an extraordinary extent, " says Marshall of Fitch IBCA. The number of bad loans is beginning to reach frightening heights.
"You're trying to second-guess politicians and as an investor, that's a really bad position to be in, " says Alec Letchfield, head of U.K. equities for HSBC Global Asset Management in London.
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