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It is as if investors are more interested in buying or selling exposure to risk than particular assets, so many markets that are perceived to embody risk move as one.
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They have also sold exposures on the secondary-loan market, bought portfolio insurance from insurers and sold credit risk through collateralised debt obligations and credit derivatives.On the whole, says Michael Foot, head of banking supervision at Britain's Financial Services Authority, these techniques should mean that credit risk is parcelled out more evenly.
Citi is reducing the leverage in its investment bank and selling off exposures as it can, they said, as well as shedding tangential businesses, such as its sale of most of its $13 billion commercial lending and leasing business to General Electric, announced Thursday.
This liquidity enables, for example, a finance minister from the Chinese government to gain exposure to the U.S. mortgage market and to buy and sell that exposure at will.
So, after developing a process to sell street exposure to sponsors, are the companies' executives driving slogan-emblazoned vehicles all the way to the bank?
Allison says that working with emerging designers lets them see what pieces sell, garner exposure for their brand, and enter the market without having to create a full line or be picked up by stores.
Now that they sell their exposures, they have blithely passed this responsibility on to outsiders, such as Moody's, Standard & Poor's and Fitch Ratings.
Linked to sponsorship is merchandising, which enables sports, sponsors, and companies to derive additional income and exposure by selling to sports fans goods and services that identify the fans as supporters both of teams (such as football shirts) and of sponsors (through displaying, for example, the Nike sportswear company's "swoosh" or the distinctive stripes of Adidas).
Zulily is often asking for tenfold the volumes these brands are accustomed to selling: "We give them exposure they can't find anywhere else," Vadon says.
A well-known fund manager in Beijing told me that he and all his colleagues expected a "very bad" downturn and that most everyone he knew was selling assets to eliminate exposure.
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