Long Term Investment Balance Sheet
LONG TERM INVESTMENT BALANCE SHEET : CAPITAL INVESTMENT SERVICES : INVESTING IN BAD TIMES.
Long Term Investment Balance Sheet
- : A summary of a person’s or organization’s assets, liabilities and equity as of a specific date
- A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period
- a record of the financial situation of an institution on a particular date by listing its assets and the claims against those assets
- In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year.
balance sheet
- An act of devoting time, effort, or energy to a particular undertaking with the expectation of a worthwhile result
- the commitment of something other than money (time, energy, or effort) to a project with the expectation of some worthwhile result; “this job calls for the investment of some hard thinking”; “he made an emotional investment in the work”
- investing: the act of investing; laying out money or capital in an enterprise with the expectation of profit
- The action or process of investing money for profit or material result
- A thing that is worth buying because it may be profitable or useful in the future
- outer layer or covering of an organ or part or organism
investment
- long-run: relating to or extending over a relatively long time; “the long-run significance of the elections”; “the long-term reconstruction of countries damaged by the war”; “a long-term investment”
- Long-Term Capital Management L.P. (LTCM) was a hedge fund management firm based in Greenwich, Connecticut that utilized absolute-return trading strategies (such as fixed-income arbitrage, statistical arbitrage, and pairs trading) combined with high leverage.
- A term is a period of duration, time or , in relation to an event. To differentiate an interval or duration, common phrases are used to distinguish the observance of length are short-term, medium-term and long-term.
long term
Dow Down Another 450 Points
Worst Crisis Since ’30s, With No End Yet in Sight
By JON HILSENRATH, SERENA NG and DAMIAN PALETTA
The financial crisis that began 13 months ago has entered a new, far more serious phase.
Lingering hopes that the damage could be contained to a handful of financial institutions that made bad bets on mortgages have evaporated. The latest turmoil comes not so much from the original problem — troubled subprime mortgages — but from losses on credit-default swaps, the insurance contracts sold by American International Group Inc. and others to those seeking protection against other companies’ defaulting.
The consequences for companies and chief executives who tarry — hoping for better times in which to raise capital, sell assets or acknowledge losses — are now clear and brutal, as falling share prices and fearful lenders send troubled companies into ever-deeper holes. This weekend, such a realization led John Thain to sell the century-old Merrill Lynch & Co. to Bank of America Corp. Each episode seems to bring intervention by the government that is more extensive and expensive than the previous one, and carries greater risk of unintended consequences.
Expectations for a quick end to the crisis are fading fast. "I think it’s going to last a lot longer than perhaps we would have anticipated," Anne Mulcahy, chief executive of Xerox Corp., said Wednesday.
"This has been the worst financial crisis since the Great Depression. There is no question about it," said Mark Gertler, a New York University economist who worked with fellow academic Ben Bernanke, now the Federal Reserve chairman, to explain how financial turmoil can infect the overall economy. "But at the same time we have the policy mechanisms in place fighting it, which is something we didn’t have during the Great Depression."
In the wake of this past week’s market meltdown, WSJ’s economics editor David Wessel looks at the shakeup and sees one of two outcomes: the crisis as catharsis or a drawn-out mess.
The U.S. financial system resembles a patient in intensive care. The body is trying to fight off a disease that is spreading, and as it does so, the body convulses, settles for a time and then convulses again. Disease has overwhelmed the self-healing tendencies of markets. The doctors in charge are resorting to ever-more invasive treatment, and are now experimenting with remedies that have never before been applied.
Fed Chairman Bernanke and Treasury Secretary Henry Paulson walked into the hastily arranged meeting with congressional leaders Tuesday night to brief them on the government’s unprecedented rescue of AIG. They looked like exhausted surgeons delivering grim news to the family.
"These are huge, momentous events with cataclysmic implications," Sen. Chris Dodd, a Connecticut Democrat, said in an interview after the meeting.
Fed and Treasury officials have identified the disease. It’s called deleveraging. During the credit boom, financial institutions and American households took on too much debt. Between 2002 and 2006, household borrowing grew at an average annual rate of 11%, far outpacing overall economic growth. Borrowing by financial institutions grew by a 10% annualized rate. Now many of those borrowers can’t pay back the loans, partly because of the collapse in housing prices. They need to reduce their dependence on borrowed money, a painful and drawn-out process that can choke off credit and economic growth.
At least three things need to happen to bring the deleveraging process to an end, and they’re hard to do at once. Financial institutions and others need to fess up to their mistakes by selling or writing down the value of distressed assets they bought with borrowed money. They need to pay off debt. Finally, they need to rebuild their capital cushions, which have been eroded by losses on those distressed assets.
But many of the distressed assets are hard to value and there are few if any buyers. Deleveraging also feeds on itself in a way that can create a downward spiral: Trying to sell assets pushes down the assets’ prices, which makes them harder to sell and leads firms to try to sell more assets. That, in turn, suppresses these firms’ share prices and makes it harder for them to sell new shares to raise capital. Mr. Bernanke, as an academic, dubbed this self-feeding loop a "financial accelerator."
More on the Crisis
Mounting Fears Pummel World MarketsMorgan Stanley in Talks With Wachovia, OthersUnheard Pleas, Lost Chances for AIG Complete Coverage: Wall Street in Crisis"Many of the CEO types weren’t willing…to take these losses, and say, ‘I accept the fact that I’m selling these way below fundamental value,’ " says Anil Kashyap, a University of Chicago business professor. "The ones that had the biggest exposure, they’ve all died."
Deleveraging started with securities tied to subprime mortgages, where defaults started rising rapidly in 2006. B
Verifying balance sheet
