“we have these “assets” but we aren’t going to tell you what they are because we don’t have to”
Yes, this is exactly what off-balance sheet, OBS for short, means.
Suppose a company has a line of credit at the bank of, say, 1,000,000 dollars, but the credit line comes with a financial covenant stating that the debt-equity-ratio must not exceed 0.5, meaning that the company’s total debt must not exceed half the company’s equity at any point of time.
Suppose now the company wants to buy a new machine on credit, but the costs for this new asset would violate the covenant rule. So the company founds a subsidiary. The subsidiary would then buy the machine to immediately lease it back to the parent company. As the parent company doesn’t legally own the machine, it is not on its balance sheet, meaning the debt-to-equity ratio is fine, but it can control and use the asset (the machine) as it is the company’s subsidiary’s asset.
The company now pays leasing fees (instead of interest rates, had it bought the machine directly on credit), which, of course, stresses its liquidity (very much as it would be in case of a direct credit).
So OBS assets can technically improve ratios, but they are hard to analyze and assess (but they can deceive shareholders and other stakeholders, including authorities, by conveying a higher solvency and liquidity than they actually have).
Large companies and banks have many opportunities to create such OBS. They often create so-called Special-Purpose Vehicles (SPVs) following a similar approach as in our small example. Banks can also move assets through securitization, leaseback agreements, accounts receivables, derivatives.
Don’t get me wrong, there are good reasons to use this tool, but if and when you overdo it, you may not know yourself what risks your entire business actually bears. It becomes incalculable.
And if then, say, you can’t pay back a small loan because investment A went wrong, then investment B that has initially nothing to do with A may also suffer, which then effects C …
A cyberattack on the Ascension health system operating in 19 states across the U.S. forced some of its 140 hospitals to divert ambulances, caused patients to postpone medical tests and blocked online access to patient records...
As the dust settles on the landmark findings of the foreign interference inquiry, Canada’s intelligence agency is warning that China likely will back more meddling campaigns and expand its online pressure tactics over the coming year....
As much as I agree, I am not sure whether this is what they are aiming at.
The law’s provision of civil damages means that private actors — including those with seemingly endless resources — can bog you down in costly and distracting litigation,” Shamas said. “This means that Palestinians and those who support their rights become ‘high risk’ — and those who they rely on — charities, funders, banks or social media companies — are chilled from further engagement. The goal is to isolate Palestinians.”
SMIC, China’s biggest contract chip manufacturer, is seen as critical to Beijing’s ambitions of cutting foreign reliance in its domestic semiconductor industry as the U.S. continues to curb China’s tech power. SMIC lags behind Taiwan’s TSMC and South Korea’s Samsung Electronics, according to analysts....
The Philippines’ military chief accused China of a “malign influence effort” on Wednesday, after a local newspaper reported a Filipino vice admiral had made a deal with Beijing to de-escalate tensions in the South China Sea....
Opal Sandy from Oxfordshire in the UK is the first patient treated in a global gene therapy trial, which shows “mind-blowing” results. She is the first British patient in the world and the youngest child to receive this type of treatment....
Former Georgia Republican Lt. Gov. Geoff Duncan on Monday said he will vote for President Joe Biden in November, arguing former President Donald Trump “has disqualified himself through his conduct and his character.”...
An international agreement to end plastic pollution is due to be sealed this year in Busan, South Korea. At the penultimate round of negotiations, held in Ottawa, Canada, Rwanda and Peru proposed a target to cut the weight of primary plastics produced worldwide by 40% by 2040, compared with 2025....
A Chinese fighter jet endangered an Australian military helicopter during an “unsafe” and “unacceptable” confrontation over the Yellow Sea, Australia said on Monday....
The Hague-based office of ICC Prosecutor Karim Khan said in a statement on Friday that all attempts to impede, intimidate or improperly influence its officials must cease immediately....
U.S. banks hold trillions of dollars off-balance sheet, in a replay of accounting hubris that led to the 2008 Wall Street collapse (wallstreetonparade.com)
Archived link...
A cyberattack forces a big US health system to divert ambulances and take records offline (abcnews.go.com)
A cyberattack on the Ascension health system operating in 19 states across the U.S. forced some of its 140 hospitals to divert ambulances, caused patients to postpone medical tests and blocked online access to patient records...
Cyberattack targeting B.C. government networks led by a ‘state or state-sponsored actor’ (globalnews.ca)
Archived link....
"X": Far-right conspiracy theorists have returned in droves after Elon Musk took over the former Twitter, new study says (mashable.com)
Archived link....
The New Propaganda War: Autocrats in China, Russia, and elsewhere are now making common cause with MAGA Republicans to discredit liberalism and freedom around the world (www.theatlantic.com)
Here is the archived version....
CSIS says China remains "an enduring threat" to Canadian technology, democracy and diaspora communities (www.cbc.ca)
As the dust settles on the landmark findings of the foreign interference inquiry, Canada’s intelligence agency is warning that China likely will back more meddling campaigns and expand its online pressure tactics over the coming year....
October 7 Survivors Sue Campus Protesters, Say Students Are “Hamas’s Propaganda Division” (theintercept.com)
China’s biggest chipmaker SMIC warns of ‘fierce’ competition as it misses quarterly profit expectations (www.cnbc.com)
SMIC, China’s biggest contract chip manufacturer, is seen as critical to Beijing’s ambitions of cutting foreign reliance in its domestic semiconductor industry as the U.S. continues to curb China’s tech power. SMIC lags behind Taiwan’s TSMC and South Korea’s Samsung Electronics, according to analysts....
"A genocidal government": Discussion with Cosette Wu, the woman behind the Harvard speech disruption criticizing the Chinese Communist Party (focustaiwan.tw)
Link to the archived version....
How the Great Firewall of China Detects and Blocks Fully Encrypted Traffic (gfw.report)
Archived version...
LockBit ransomware gang claims attack on Wichita as city struggles with payment issues, airport disruption (therecord.media)
Archived version...
'Neom' project: Forces in Saudi Arabia 'told to kill' to clear land for a futuristic desert city being built by dozens of Western companies, ex-intelligence officer says (www.bbc.com)
Col Rabih Alenezi says he was ordered to evict villagers from a tribe in the Gulf state to make way for The Line, part of the Neom eco-project....
Philippine military chief accuses China of 'malign influence effort' to distract from 'the China coast guard's ongoing aggressive behaviour' (www.reuters.com)
The Philippines’ military chief accused China of a “malign influence effort” on Wednesday, after a local newspaper reported a Filipino vice admiral had made a deal with Beijing to de-escalate tensions in the South China Sea....
Baby born deaf can hear after breakthrough gene therapy (www.cuh.nhs.uk)
Opal Sandy from Oxfordshire in the UK is the first patient treated in a global gene therapy trial, which shows “mind-blowing” results. She is the first British patient in the world and the youngest child to receive this type of treatment....
I love tardigrades and think they deserve more love, so I made a quick doodle of a jelly tardigrade angel! 🍮 (lemm.ee)
Don’t worry, this little angel respawns whenever he’s eaten, and tastes like raspberry!
Former Georgia Republican Lt. Gov. Geoff Duncan says he is voting for Biden in November (www.cnn.com)
Former Georgia Republican Lt. Gov. Geoff Duncan on Monday said he will vote for President Joe Biden in November, arguing former President Donald Trump “has disqualified himself through his conduct and his character.”...
A global plastic treaty will only work if it caps production, modelling shows, researcher says (theconversation.com)
An international agreement to end plastic pollution is due to be sealed this year in Busan, South Korea. At the penultimate round of negotiations, held in Ottawa, Canada, Rwanda and Peru proposed a target to cut the weight of primary plastics produced worldwide by 40% by 2040, compared with 2025....
Chinese fighter jet endangered Australian military helicopter during "unsafe" and "unacceptable" confrontation over the Yellow Sea, Australia says (www.reuters.com)
A Chinese fighter jet endangered an Australian military helicopter during an “unsafe” and “unacceptable” confrontation over the Yellow Sea, Australia said on Monday....
International Criminal Court appeals for end of 'intimidation' of its staff, saying such threats could constitute an offence against the “administration of justice” (www.aljazeera.com)
The Hague-based office of ICC Prosecutor Karim Khan said in a statement on Friday that all attempts to impede, intimidate or improperly influence its officials must cease immediately....