Word: ratio
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...yield curve will continue to be depressed, just as it has been in Japan for the past 16 years. In the early 1990s observers in Japan argued that 10-year Japan government-bond yields of 3.5% could not persist for long. That was when the government debt-to-GDP ratio was around 50%. It now stands at 150% and 10-year yields are 1.36% (having gone as low as 60 basis points in the interim...
...match supply, even though Washington must sell hundreds of billions of dollars in bonds in coming months to fund stimulus measures and bank rescues. Consider the uncanny parallel between the composition of assets on bank balance sheets in 1929 and balance sheets at the start of this crisis. The ratio of loans to investments, which include Treasuries and other securities, was 2.6:1 in 1929 and 2.8:1 in 2008. During the early period of the Great Depression, banks restructured their balance sheets to reflect a much more conservative lending stance. They reduced loans - in absolute and relative terms...
...this: What is your alpha relative to a monkey? Alpha refers to the measure by which you beat the expected return. In other words, how much better could you do in the job than an average simian that is plopped in the chair? What's your alpha-monkey ratio...
...down, that wasn't a heck of a lot; Citigroup, for instance, had a $13.2 billion charge in the same quarter, primarily related to loan losses. But the relatively small loss took BofA's thin tangible equity, the type of capital that matters most to shareholders, down to a ratio of just 2.6% of loans, according to FBR. By that measure, Bofa was a weaker bank than any of its rivals, including Citigroup. But since the market was so focused on bad loans and the charge-offs banks had to take, no one seemed to notice BofA's faults...
...delight of investors, BofA was pushing for the freedom to make risky loans at the same time it was aggressively repurchasing shares. Since 1998, it has spent $62 billion on share buybacks, according to S&P. The result is that over the past decade, BofA's tangible-capital ratio - the amount of tangible equity in relation to tangible assets - has nearly halved from 5% in 1998 to 2.8% in the third quarter of 2008. It became a bank built on air. (See pictures of scared traders...