When the potentially retained task has little effect on the asset value, a third optimal configuration arises, in which one task is retained by the principal, but the agent owns the asset.
"A few members remained unsure of the likely effects of the asset purchase program on the economy, but felt that making changes to the program at this time was not appropriate," the minutes read.
In the contract with Verizon, the Yahoo deal includes a clause that allows Verizon to withdraw if a new event "reasonably can be expected to have a material adverse effect on the business, assets, properties, results of operation or financial condition of the business", according to Reuters.
Under their agreement, a material adverse change is: [t]he occurrence of any condition, change or development that could reasonably be expected to have a material adverse effect on the business, assets, liabilities (actual or contingent), or operations, condition (financial or otherwise) or prospects of [Innskeepers]… MAC aficionados will immediately notice two important things about this MAC.
Small changes in beliefs about the future can have a surprisingly large effect on the value of the assets concernedIn other words, because asset prices are bets on a distant and uncertain future, they are inherently volatile.
QE purchases focused on safe assets might have an ambiguous effect on the economy: boosting asset prices through portfolio balance effects but limiting lending growth by sucking up the supply of good collateral.
Small changes in beliefs about the future can have a surprisingly large effect on the value of the assets concerned.The numbers can seem outlandish, but it is only a matter of the arithmetical relationship between present value, compound interest and future value.
They are counting on land sales and property taxes for less than 17% of their revenues this year, according to Vincent Chan of Credit Suisse, once fiscal transfers from the central government are taken into account.More concerning is the effect on their assets and liabilities.
At the same time the spread between AAA-rated and lower-rated corporate bonds also widens, a sign that the supply of Treasuries has a broader effect on the price of safer assets.
We have demonstrated that market and industry specifc liquidity factors have a predominant effect on the liquidity of individual assets.
