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Exact(14)
For pension funds and other investors, they represent lost capital and lower future earnings.
In that case, would you not go to court to recover your lost capital?
Or money-losing hedge-fund managers: rather than try to earn back their investors' lost capital, they start new funds so they can rake in fresh incentives.
As one would expect, rich countries with high-quality institutions and populations with high levels of human and social capital recover more quickly, and are most likely to intelligently allocate resources toward improvements over lost capital stock and infrastructure.
But as the housing market collapsed, and people couldn't cover their mortgages or sell their houses, the bonds lost value and, therefore, the banks that held them lost capital, and the whole pyramid started to crumble.
As these mortgages would be guaranteed by the Treasury, they would suddenly be assessed, on bank balance sheets, at their original value — and a significant amount of the banks' lost capital would be restored.
Similar(44)
Those that take out insurance on their loans, another option under the Treasury's plan, would neither gain nor lose capital, but would have to start paying premiums.
But long before that shock, the country had been suffering the effects of the global slump, losing capital as Western investors fled to the security of American Treasuries, undermining Indian banks and company balance sheets.
As the crisis of 2008 reminded us all, there will be periods when if you don't have at least part of your portfolio in safer investments, such as bonds, you'll end up losing capital.
But there are no known cases of retail investors losing capital in a money fund.
And the notion that portfolio managers should pay investors back when they lose capital is absurd.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com