Re:Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making...
by anonymouskimmer on Tuesday May 16, 2023 @12:33PM
(#35964239)
Loan servicing costs only exist because of middlemen. If two people directly interface for a loan there is no additional cost (other than the cost of transportation, which only exists because a middleman is charging for gas and car maintenance).
Foreclosing on an asset doesn't happen in my example is not a cost, but a risk, which the interest rate should be accounting for.
Longterm lockup of capital is not a problem, as either party in my example are financially gaining regardless.
And I granted you the other uses for shares, which technically can be done without buying the share, but at a middleman cost (renting the share).
I really don't care to continue this. Mine was just a hypothetical in favor of the idea that there's always a "loser" (when compared to all possible financial alternatives) in stock trades, even if everyone ends up happy with the trade. Sure, there are holes in the hypothetical. I don't care.
Foreclosing on an asset doesn't happen in my example is not a cost, but a risk, which the interest rate should be accounting for.
Longterm lockup of capital is not a problem, as either party in my example are financially gaining regardless.
And I granted you the other uses for shares, which technically can be done without buying the share, but at a middleman cost (renting the share).
I really don't care to continue this. Mine was just a hypothetical in favor of the idea that there's always a "loser" (when compared to all possible financial alternatives) in stock trades, even if everyone ends up happy with the trade. Sure, there are holes in the hypothetical. I don't care.