Bezos donates $100M each to CNN contributor Van Jones and chef Jose Andres

Re:Bezos donates $100M each to CNN contributor Van Jones and... by asciimov on Wednesday July 21, 2021 @04:06PM (#27911418)

Not necessarily. The wealthy put up $-worth of shares as collateral to borrow $$$$-worth of money from the bank at low interest rates.

The bank doesn't just sit on those shares, they use them to generate money for themselves. For example, say the Bank takes $250M in Amazon shares from Bezos and loans him $1B. If the bank projects that the price of Amazon is going down, they short that $250M in shares.

If Bezos did need to pay off one bank, he just borrows from another.

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Re:Bezos donates $100M each to CNN contributor Van Jones and... by kristjansson on Wednesday July 21, 2021 @05:01PM (#27912116)

It's the other way around? You borrow substantially fewer dollars than the value of the shares you pledged as collateral so that the bank doesn't call the loan if (when) the value of the shares changes.

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Re:Bezos donates $100M each to CNN contributor Van Jones and... by asciimov on Wednesday July 21, 2021 @05:48PM (#27912633)

For you and me, you are right, but those on the top get to play by different rules.

Also, while it's called a loan, think of it more like a credit line.

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