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> That's why lenders make money. Because there is a risk of default. Nope! Interest paid also covers more things, like inflation, opportunity cost, and other r
by harperlee 11y ago
> That's why lenders make money. Because there is a risk of default.
Nope! Interest paid also covers more things, like inflation, opportunity cost, and other risks. You could make money as a lender with zero default risk.
- danharaj 11y agoMildly interesting detail to elaborate on, but the essential point stands, don't you think?
- harperlee 11y agoWell I'm on mobile, so I can't really elaborate a lot, but I do think it's a little bit more central to the case than you imply. This was a european country's sovereign debt, so default risk was expected to be very low, and there has been financial information manipulation, and in those cases people do not just default, but might be also prosecuted. This is a complicated scenario, so simplifying definitions to make a point can end up biasing the result a lot. If it's your chain of reasoning, great; but if you publish it, it's best if you strive to be as complete and transparent as possible: https://news.ycombinator.com/item?id=9996843 https://news.ycombinator.com/item?id=9996843