An exchange-traded note is an unsecured bank IOU with returns pegged to some index.
The bank takes that contract , creates an account and deposits that IOU into an account.
However, that IOU is actually a claim on future taxes because the money has been spent.
Corporations sell commercial paper, a short-term IOU, to fund day-to-day activities like payroll.
These are bonds, a form of IOU issued by governments to borrow money.
Not the mortgage, the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.
When you sell your strip mall or your business, you take an IOU from the buyer for some of the purchase price.
David would take out a bank loan against the iou and use the cash to buy more art--"Like when you sell automobiles, " he says.
We are currently spending more on Medicare than we are collecting in payroll taxes and cashing in the few IOU's left in the trust fund.
The bond, a glorified IOU, will last for 10 years after which investors will get their money back, plus any rise in the retail prices index (RPI).
It's essentially me lending you money without having to worry about whether or not you pay me back because I've sold the IOU to my brother or my sister.
After all, she says, analysts in the Middle East failed to predict the Arab Spring and very few experts saw the financial meltdown coming -- something she did three years before in her book " IOU: The Debt Threat".
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