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In an asset-based economy, manufacturing, as well as perhaps services, no longer provide the engine for growth.Rather the appreciation of assets leads to an increased net worth among individuals which, in the direct sense, can serve as collateral for borrowing, which in turn creates greater demand for goods and services.
In the second case, an "asset-backed security" – or at least the abbreviation "ABS" – refers to just one of the subsets, one backed by consumer-backed products, and is distinct from a MBS or CDO, (example: "As a rule of thumb, securitization issues backed by mortgages are called MBS, and securitization issues backed by debt obligations are ...
In monetary economics, inside money is money issued by private intermediaries (i.e., commercial banks) in the form of debt . [1] This money is typically in the form of demand deposits or other deposits and hence is part of the money supply. The money, which is an asset of the depositor but coincides with a liability of the bank, is inside money ...
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...
Paper wealth is fundamentally an accounting matter – one's net worth is the accounting value of one's assets minus the accounting value of one's liabilities. There are various accounting methods for different assets and liabilities, and they yield different notions of net worth; some methods are more or less volatile than others.
A liquid asset is an economic resource that can be quickly and easily converted into cash. Liquid assets can be sold or exchanged without significantly impacting their value. Examples of liquid ...
An asset in economic theory is a durable good which can only be partially consumed (like a portable music player) or input as a factor of production (like a cement mixer) which can only be partially used up in production. The necessary quality for an asset is that value remains after the period of analysis so it can be used as a store of value ...
Cash CDOs involve a portfolio of cash assets, such as loans, corporate bonds, asset-backed securities or mortgage-backed securities. Ownership of the assets is transferred to the legal entity (known as a special purpose vehicle) issuing the CDO's tranches. The risk of loss on the assets is divided among tranches in reverse order of seniority.