The group's rough blueprint will be presented at a conference next week, but you can thumb through their short paper at the source.
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Individual investors hold too much invested capital in bonds and short term paper.
This short teaser paper from consultant Oliver Marks of the Sovos Group frames a crucial conversation that will be part of the upcoming Enterprise 2.0 Conference to be held on Nov 8-11, in Santa Clara, CA. This biennial conference brings together thought-leaders, practitioners, participants and vendors all focusing on the topic and issues around implementing collaborative practices and technologies within companies.
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The company was able to raise short-term paper at very low interest rates, which lowered its overall cost of borrowing.
Or to buy short-term paper issued by off-the-balance-sheet financial units of major banks that were not transparent to the investment community.
What if you sell and reinvest in short-term paper yielding only 2%?
The European Financial Stability Facility announced an expanded funding profile Wednesday, with plans to start selling short-term paper with three-, six- and 12-month maturities.
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The 5.29% yield tightened relative to treasuries by eight basis points on the day leaving the spread at 586 basis points above government short-dated paper.
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The less charitable interpretation is that the central bank has softened the penalty for banks that have funded purchases of very illiquid assets with short-term paper.
You can get the currency exposure either by purchasing short-term paper issued by the flaky government in question or by taking a long position in the futures market for that currency.
That is, the interest rate on Argentinean short-term paper, or the price of the peso on the forward market, reflects the risk of a surprise devaluation that will cost you a chunk of your capital.
The credit rating agency referenced the December 3 offer by the Greek government to private investors to participate in a Dutch auction to exchange their sovereign bonds for short-term paper issued by the European Financial Stability Facility (EFSF).
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Until the Great Recession, the Fed limited its purchases of Treasury paper to short-term bills that carry no interest rate risk.
For some banks, the combined issuance of asset-backed securities and commercial paper (short-dated securities) amounted to about half of all their loans.
But as long as such high returns are available on short-term government paper, even a tax break may not make longer-term, riskier investments look sufficiently appetising.
The central bank is also trying to woo money by fiddling with regulations: on August 24th it allowed foreigners to invest freely in short-term government paper.
The economy ministry also hopes to cut its interest burden by strong-arming pension funds (over sour looks from the big rating agencies) to swap short-dated government paper for long-term bonds.
But it is too soon to tell whether the vehicle will ever be restored to its former pre-credit-crunch glory, when it was able to issue short-term commercial paper to fund its investments in asset-backed securities.
This has come as a huge relief to chief financial officers, who barely a year ago were having to make do without a fully functioning market for commercial paper (short-term loans to finance operating expenses).
On the other hand, the European central bank has given European banks billions of no-cost three-year loans and guess what, some of those banks have been using that money to buy newly issued short-term government paper.
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But while Immelt has taken major steps toward shoring up the company's balance sheet, including slashing its reliance on short-term commercial paper and reducing risky real estate loans, GE is still vulnerable to rising interest rates and unwelcome scrutiny from regulators.
The company, which makes screens for Apple's iPad and iPhone, needs to shore up cash to roll over as much as 360bn yen of short-term commercial paper and will need another 200bn yen to cover a maturing convertible bond in September 2013.
Yet the White Paper is refreshingly short of new ways to spend public money.
Corporations sell commercial paper, a short-term IOU, to fund day-to-day activities like payroll.
Whilst engaging in dialogue to remove illegal symbols can bring short term relief, the paper argues that there are risks to this approach.
That liquidity crisis is why the Federal Reserve had to step in last week and act as commercial bank of last resort, agreeing to buy short term notes called commercial paper directly from companies.
The costs of issuing commercial paper, a form of short-term debt heavily used by companies in America, will fall once a Fed facility for purchasing commercial paper is up and running on October 27th.
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This is clear from the performance of the commercial-paper market, another short-term asset class that rarely hits the headlines, where rates suddenly hit six-year highs last week.
The commercial paper market represents the short-term loans that corporations issue to one another, a market which has now all but dried up as banks and firms fear lending money to a potential defaulter.
Known as conduits, these special-purpose vehicles borrow in the short-term, commercial-paper market to make acquisitions of highly rated paper in American asset-backed securities, and have been walloped by the plunging value of those assets since the frailty of subprime loans were exposed.
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