Secondly, the Fed holds long-term assets and short-term liabilities and yield curves generally slope upwards.
The ratio of short term liabilities to short term assets has never been lower.
Japanese officials said the BOJ should act without worrying about the financial risks of buying longer-term assets.
If your short-term assets are at risk in the stock market, you have made a fundamental mistake.
When this happens, the Fed, rather than the banks, will take the balance sheet hit on trillions of dollars of long-term assets.
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"This should be a great time to invest in long-term assets such as energy, but clear policy is needed in order to release it, " he said.
With most of the funds tied up in long-term assets, that could leave the banks short of cash if investors stop buying new products.
Its level reflects all sorts of things, including demand from investors for bonds, expectations of future inflation and a risk premium for holding longer-term assets.
These gave banks more freedom to use models to value illiquid assets and more flexibility in recognising losses on long-term assets in their income statements.
One of my bank clients has several billion dollars of cash and short-term assets on which it is earning just 27 hundredths of one percent interest.
For investors in the stock market, it is a general rule to assume that long-term assets should not be needed in the three- to five-year range.
Long-term nominal interest rates are influenced by many things, including investors' expectations of inflation and future short-term rates, and a risk premium for holding long-term assets.
By the end of 2007, money funds held a record 31% of corporate America's short-term assets, a share that is thought to have continued rising this year.
They treat capital expenditures, like buildings and long-term assets, the same way they treat operational expenditures, so it's really impossible to tell if we have a surplus or deficit or what.
The fact is, mortgages in general, and the uniquely American 30-year fixed rate, prepayable, self-amortizing mortgages in particular are, like many long-term assets with built-in options, extremely difficult to price properly.
That allows banks to use short-term funds raised from the sale of products to buy the longer-term assets that have the higher yield banks need to give investors the promised return.
If yields are low because investors demand less compensation for holding long-term assets, then financial conditions have become looser and the central bank, other things being equal, needs to continue tightening.
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The commercial paper market is growing increasingly antsy and GE, not unlike a hedge fund, is stuck with some percentage of long-term assets that it is trying to fund with short-term money.
Long-term liabilities should be funded with long-term assets.
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The other, fee-based side of its business involves managing long-term investor assets in exchange-traded funds, mutual funds and money market accounts.
It acquires equity in startups often on the cheap via a hodgepodge of sources: venture funds in wind down mode, pension funds and endowments looking to purge long-term illiquid assets from their portfolios, or just founders, VCs and angels starved for a little liquidity.
Holding a lot of long-term, illiquid assets and using very short-term markets for funding seemed fine when times were good.
Others will make bigger adjustments, putting some assets needed for short-term expenses in safe investments like money-market accounts while leaving assets for long-term expenses in riskier investments like stocks.
We should not expect current taxpayers to pay the full cost of long term investments and assets that will benefit future generations as well.
SIVs allow a money manager to borrow money in the short term in order to invest in higher-yielding or more risky assets longer term.
FORBES: This is a transcript of the After Hours video report.
Comparing long-term debt to current assets helps measure financial stability and highlights a potentially worsening situation within a company.
Littman Krooks LLP counsels individuals and families to plan for retirement, long-term needs, and protect assets.
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Lydall ( LDL) lowered its expected long-term rate of return on plan assets to 7.75% for 2012, from a prior 8%.
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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.
As investors remain wary of risk involved in equity and commodity assets in the short term, Berkshire Hathaway sage Warren Buffett is in India, where he advised investors to stay out of long-term dollar-bound bonds, according to Bloomberg.
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