When capital is allocated in a free market, it moves toward the productive, and the economy tends to prosper. By the same token, when it is misallocated, an economy can hit the skids. We’ve had decades of misallocated capital in the U.S. Instead of saving, we’ve been spending… way beyond our means.
November 14th, 2008 | Doug Hornig | 0 comments | ContinuedAll Posts Tagged With: "capital"
Level 3 Assets Growing in All Five U.S. Investment Banks
The SEC will require Wall Street firms to report on their capital and liquidity levels in, “terms the market can readily understand and digest.” Aha! So we will now know who has more dodgy assets than real capital. Of course, we already do know quite a bit. A new accounting rule last November required banks to report their assets in three categories, from easiest to sell and value (Level 1) to hardest to sell and value (Level 3). Write-downs in level 3 assets directly affect a bank’s capital.
May 8th, 2008 | Dan Denning | 1 comment | Continued