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5-8-2012 5:56:00 PM
Criminals who file fraudulent tax returns by stealing people's identities could rake in an estimated $26 billion over the next five years because the IRS cannot keep up with the amount of the fraud, Treasury Inspector General J. Russell George said Tuesday.
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The biggest newspaper in the West, the Los Angeles Times, suddenly has a new publisher and a new editor in chief.
Treasury bill or T-bills are short-term debt obligations backed by the U.S. government. This obligation has a maturity period (a time when the investor can receive her return) of less than one year. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million. These bills commonly have a maturity of one month (four weeks), three months (13 weeks) or six months (26 weeks).
These obligations are issued competitively through a bidding process. T-bills are discounted from par. For example, an investor would pay $960 for a T-bill that would yield a 4% return over a four week period and receive $1,000 upon the bill’s maturity. T-bills pay an appreciated return to the holder instead of paying fixed interest payments like conventional bonds.
Corporations issue unsecured, short-term debt instruments, typically for ordinary business expenses like accounts receivables, inventories and meeting other short-term liabilities. Commercial paper maturities rarely range any longer than 270 days. Similar to T-bills, this debt is issued at a discount, reflecting the prevailing market interest rates.
Commercial paper is a way for corporations with high-quality debt ratings, as rated by Moody’s, Standard & Poor and other ratings agencies, to raise capital without the usual backing of collateral. Therefore, the firm’s debt high-quality rating will encourage buyers to purchase their debt without having to offer a substantial discount (higher cost) for the debt issue.
CDs and banker’s acceptance
A certificate of deposit (CD) is a promissory note, typically issued by commercial banks. It entitles the owner to a predetermined rate of interest. A CD has a specific maturity date that can be issued in any denomination. They are insured by the FDIC. CDs typically have terms that range from one month to five years. They are deposits which restrict holders from withdrawing funds when they’d like to. Although it is still possible to withdraw the money, this action will often incur a penalty.