In connection with the earnings report Lehman released on June 16, 2008, the firm published a detailed financial appendix breaking down its balance sheet by various asset groups.
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Deferred tax liabilities, off-balance sheet debt, and asset write-downs result in a bloated balance of which most investors are not aware.
Imagine the potential for trouble monetizing this giant liability side of the balance sheet while selling the asset side to mop up the cash again.
And its balance sheet is burdened with distressed asset-backed securities and mounting credit losses in its consumer lending division.
Expanding the ECB balance sheet put a floor under asset prices and restored confidence in the entire European financial system, much as had happened in the U.S. in 2009.
In many countries, the buyer must record the difference between the price of the acquisition and the target firm's reported assets as a new asset on its balance sheet.
According to those minutes, several FOMC members thought the new round of asset purchases and balance sheet expansion might be ended by the end or even before the end of 2013 while interest rates would presumably remain on the floor much longer.
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The current action seeks to target the asset side of the balance sheet.
That is, the problem is deemed to be giving banks too much discretion on the asset side of the balance sheet, when the liability side is insured.
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The critics assume implicitly that all the expansion on the asset side of the Fed's balance sheet is offset by monetary liabilities, which simply isn't true.
These three sets of policy tools--lending to financial institutions, providing liquidity directly to key credit markets, and buying longer-term securities--have the common feature that each represents a use of the asset side of the Fed's balance sheet, that is, they all involve lending or the purchase of securities.
This long-term decline in NOPAT, combined with growing asset write-downs and consistently large off balance sheet debt, indicates a company with serious issues.
Although these sets of tools differ in important respects, they have one aspect in common: They all make use of the asset side of the Federal Reserve's balance sheet.
Furthermore, even by the relatively hygienic standards of most insurers, the asset side of Lloyd's' balance-sheet is squeaky clean, while the toxic claims that brought it to its knees in the 1990s are now parcelled off to Warren Buffett's Berkshire Hathaway.
But the Fed has not told us when it will begin to normalize its balance sheet, and the expectation is that it will further expand its asset acquisition and influence the allocation of credit.
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Meanwhile on the domestic front, it listed potential threats including rising property prices, which have triggered fears that new asset bubbles could form, along with "excessive off-balance sheet financing" by banks and local governments.
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Asset sales are an attractive way of cleaning up the public balance-sheet without doing anything that further chokes demand.
"With the worsening of the economy's growth prospects, continued credit losses and asset markdowns may maintain for a time the pressure on the capital and balance sheet capacities of financial institutions, " Bernanke said in a speech in London.
For most people, the value of their employment exceeds the value of their assets by a wide margin, and this asset has some special characteristics that make it differ from typical items on a balance sheet or brokerage statement.
They have come thick and fast but a common thread is that the best way for the BOJ to jump-start the economy and affect inflation and inflationary expectations is through asset markets notably the stockmarket by the use of its own balance sheet.
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