Saturday, January 19, 2008

When is cash not cash?

When it's reported on your balance sheet as "short-term-investments." In Texas Instruments latest 10Q, they had this to say:

Total cash includes $926 million of asset-backed fixed income securities, divided about equally between mortgage-backed securities secured by non-subprime-mortgage pools and non-mortgage-related asset-backed commercial paper. These asset-backed fixed income securities continue to be rated either AAA, A-1 or P-1. To date, we have collected all principal and interest payable on these securities and expect to continue to do so as they mature.

I'm sure the brokerage firms, who will now have more writedowns because of the blow-ups of the monolines, probably know what type of investments these companies cash in their "short-term-investments" are invested in.

They probably sold it to them from their inventory!