As discussed in our new book, The Age of Deleveraging, back in mid-2008, many FDIC-insured institutions were heavily leveraged but still had an average capital-to-asset ratio of 7.9%.
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But people should be required to make a real assessment of what kind of capital is necessary to hold an asset that's atypical to its maturity, if that's what they're claiming.
He also things the opportunity for the company to raise capital via asset sales may have already past.
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The process of lending money against the security of assets, or trading assets with the banks' capital, helped to push asset prices even higher.
Nippon Life Insurance has agreed to buy a 26% stake in Reliance Capital Asset Management in a bid to tap into the fast-growing Indian market.
This mathematical approach to investing led to the famed Capital Asset Pricing Model by Sharpe, Lintner, and Black, the Option Pricing Model by Black and Scholes, and other important theories.
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Banks fail because they either run out of capital to support their ongoing operations, their asset values drop below that of their liabilities, or fraud forces regulators to step in and take over.
In order to determine the true amount of real income when a capital asset is sold, it would be necessary to index the purchase price for the inflation that occurred between the date of purchase and sale.
The SEC raised serious doubts, but apparently decided recently to take no further action, concerning asset values reported to investors in Stillwater Capital Partners, a money management firm whose assets were acquired by Gerova Financial Group last year.
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That will require banks to undergo a tough asset-quality review and to boost their capital if necessary.
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The first very minor one is that the only real legal meaning of a credit rating refers to how much capital a bank has to allocate to a holding in a particular asset.
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Apologists for the capital gains tax say that when an asset is sold, the capital gain is converted to cash and can be viewed as an income flow.
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Thai developer Tanayong wants to borrow capital for its only valuable asset, the much-delayed BTS Skytrain which began operating in December.
All capital would quickly flow to the current successful asset classes, and the rest might as well close up shop because they would never attract any capital.
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Properly structured, 1031-exchange securities can enable investors to shelter real-estate sales from capital-gains taxes, to obtain regular income and to bequeath the asset to their heirs in a tax-efficient manner.
By defining human capital as an asset that must be grown and protected, investors can begin to ascertain how human capital issues impact overall portfolio risk and the probability of achieving their long-term financial goals.
Assuming a decline in asset prices, far from deflationary, the decline in the price of an asset signals to investors where capital is no longer needed.
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Even though it spits out percentages to several decimal points, the capital-asset pricing model, as the conceptual framework for calculating the rates is called, is controversial in itself.
General Growth Properties will be of special interest today as Bruce Berkowitz of Fairholme Capital sold off some of its stake to Brookfield Asset Management (NYSE: BAM) in mid-January, according to SeekingAlpha.
While this helps to contain inflation in an import-dependent economy, further rapid capital inflows could trap Manila in a vise that's increasingly common in developing Asia rapid currency appreciation (which would argue for lower interest rates to deter excess capital inflows) versus mounting asset inflation (which would require higher interest rates).
She is also trying to pursue an "asset-light" strategy to avoid the burden of supporting the capital investment needs of building and owning huge water projects.
Given that managers are paid to create value, not destroy it, asset write-downs reflect management incompetence and failure to allocate capital effectively.
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The brokerage house recorded a wider than expected loss for the second quarter and announced asset sales to shore up its capital base.
Capital spending financed by asset sales will not add to public borrowing, nor, under the conventions, to the official control total for public expenditure.
Today, concerns about capital, asset quality, and credit risk continue to limit the willingness of many intermediaries to extend credit, even when liquidity is ample.
Most advisers will tell you to diversify distribute investment capital across various asset classes, each of which may behave differently at a particular time.
After all, in this economy, human capital is supposed to be a firm's greatest asset, so to jettison it at the first sign of trouble would be horribly short-sighted.
Human capital is the asset that most people count on to support their families and to meet short-term financial obligations, such as buying food, paying the mortgage, and other living expenses.
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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If traders are given licence to use leverage to buy into rising asset markets, then the trading division should be charged a cost of capital high enough to reflect the risks involved.
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