Lease-backed securities. Interest in equipment-lease backed securities might free up banks' ability to lend to corporations. (CFO)
What else would they say? Bank regulators say new powers will help them avoid bailouts. (Reuters)
FCIC? Congress's task force to investigate financial crisis in trouble just months before report is due. (NYT)
Off the hook but duly warned. SEC drops CDO case against Moody's but issues warning to raters. (CNBC)
The end as they know it. JPMorgan plans to end all proprietary trading. (Bloomberg)
Mfg group sees lower growth. Manufacturers see slowdown as consumers save more, spend less. (JOC)
Community outreach. FDIC plans roundtables with financial community, academics on resolution authority. (The Hill)
Too many regulators. Tighter securitization rules could constrain banks, issuers. (BankInvestmentConsultant)
Slouching toward bank rule harmony. Global regulators, Basel Committee getting closer to accord on rules for banks. (WSJ)
Signs of better things? Key raw materials shipping increased in lates month, signaling growth after slowing. Intermodal shipping also up. (JOC)
Business media outlets have repeatedly pointed out that Corporate America is stockpiling cash in response to the ongoing concern over the economy and to Washington’s anti-business posturing. But how risk are they willing to take with all this extra cash?
The AFP recently released its fifth annual liquidity survey highlighting that “companies are placing this cash into ultra-conservative investment vehicles; valuing safety of principal over both liquidity and yield.” The AFP liquidity survey respondents included 337 companies, of which only 12 percent had annual revenues of $5 billion or greater. By contrast, in a March survey of The NeuGroup’s Treasury Investment Managers’ Peer Group (TIMPG) where 69 percent of participants had revenues of $5 billion or greater, and well over $2 billion in their portfolios, a slightly different story emerges. While this group has been taking a more conservative duration posture with 62 percent stating their current portfolio duration is shorter than their target, they are generally planning to add more risk to the portfolio. Indeed, 55 percent of TIMPG members indicated they plan to increase duration risk in 2010 and 70 percent indicated they plan to increase credit risk. This may lead to a conclusion that the more dollars you have to play with, the more comfortable you will be with a riskier investment strategy.
