7 ms·

Bank: I see your net worth is far beyond what you're asking for and you won't have a problem making payments with your income. I didn't even know credit scores

Bank: I see your net worth is far beyond what you're asking for and you won't have a problem making payments with your income. I didn't even know credit scores got as high as yours. Here you go.

deleted 4y ago
[deleted]
mywittyname 4y ago
Musk's net worth his highly volatile. Telsa is trading at pretty high 200 P/e, one bad quarter could crater the stock price. Space X is private, which carries its own issues. Add to that the risk to these assets if Musk dies. Or hell, even it Musk merely "spooks" investors with his flamboyance. This is a insanely risky vanity project.
- littlestymaar 4y ago
  No matter how volatile his worth is, it's just around a tens of the said worth and there's no way it loses 90% of its value overnight, even if TSLA's valuation is arguably nonsensical.
  - mywittyname 4y ago
    It doesn't need to lose 90% of its value overnight, 30% is enough to trigger a call on margin loans. Within the past year, Telsa stock slide from a $1209/sh peak to $766/sh in the span of about five months.
    - littlestymaar 4y ago
      And what? Can't he just add more securities as a collateral if it happens?
      - HWR_14 4y ago
        If he has it. At standard margin rates, he'd need to put up ~$140 billion in TSLA stock to cover his TWTR offer. How much can TSLA slide before he doesn't have that. Keep in mind, private companies (SpaceX, Twitter in this hypothetical) cannot be used for margin purposes.
        tekknik 4y ago
        Why would he have tu up up almost 4x the loan amount? He just needs to cover the loan.
        HWR_14 4y ago
        When using stock as collateral for a loan, it's not uncommon to get a loan for 30% of the value of the stock. Certainly not 100%. In this case, MS has offered him a loan for 20% of the value of his stock.
        tekknik 4y ago
        You can still sell the rest of the stock and cover a majority of the loan. I still fail to see why you need way more money than the loan amount to pay it off.
jjav 4y ago
> I didn't even know credit scores got as high as yours. A bit of an aside, but the richest person I know (as in buys multi-million dollar cars on a whim and has many many of those) says his credit score is pretty mediocre because he's never had a loan. I'd thought having gazillion dollars in the bank would give you a good credit score but guess not.
- no_wizard 4y ago
  I imagine once you have a verifiable net worth over a certain amount (at least 10 million in near cash assets + a hefty amount on hand) you are able to bypass certain things the rest of us simply can't. This is what I've heard second hand anyway
  - tekknik 4y ago
    Once you have a balance above a few hundred thousand your bank starts treating you differently. Sometimes you even get a different entrance to the bank, different tellers, so on.
- smoldesu 4y ago
  As another side note, the richest person I know regularly maxes out his credit card so he can pay it all down and rake in the score bump. Every couple times he does this, they issue him an upgraded card with less limits: the cycle continues. Not a bad way to buy stuff if you have the means to pay it off.
  - devoutsalsa 4y ago
    Imagine the airline miles you’d get by purchasing Twitter on your credit card.
    - k_sze 4y ago
      “Nobody’s gonna try to buy Twitter with a credit card, right?” “Nah.” “Alright, we don’t need BIGINT in the ‘balance’ column.”
Sebb767 4y ago
As the saying goes: If I owe the bank one million dollars, I have a problem. If I owe the bank one billion dollars, the bank has a problem.
- metadat 4y ago
  Wrong in this case. Here the bank can reclaim what is owed via other means.
  - sangnoir 4y ago
    Having to find "other means" to reclaim is exactly what makes it the banks problem. Do you think it's easy to get someone with access to billions of dollars (of your money) to do something they'd rather not? They can tie you up in the courts for years since they're basically equal powers: an $800 billion bank doesn't get better lawyers than a guy worth $1 billion. A bank vs someone with just a million dollars means the individual is at a major disadvantage as lawyer fees can easily exceed that amount in attritional lawfare.
    - timmytimthetim 4y ago
    - Sebb767 4y ago
      Also, the reason the bank suddenly wants to reclaim that money might be that the wealth has vanished. If Tesla drops 99% for whatever reason, they will have a big problem getting their money back from stocks.
      - sangnoir 4y ago
        That's a great point: counterparty risk is a much bigger concern on a billion-dollar loan
- rasz 4y ago
  The saying goes: "If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem." and comes from 1976 "As I see it: the autobiography of J. Paul Getty". There were no billionaires back then. When you owe a bank 20 Billion while being worth 260 you are still in the first category.

Bank: I see your net worth is far beyond what you're asking for and you won't have a problem making payments with your income. I didn't even know credit scores got as high as yours. Here you go.

deleted 4y ago

[deleted]

mywittyname 4y ago

Musk's net worth his highly volatile. Telsa is trading at pretty high 200 P/e, one bad quarter could crater the stock price. Space X is private, which carries its own issues. Add to that the risk to these assets if Musk dies. Or hell, even it Musk merely "spooks" investors with his flamboyance. This is a insanely risky vanity project.

littlestymaar 4y ago
No matter how volatile his worth is, it's just around a tens of the said worth and there's no way it loses 90% of its value overnight, even if TSLA's valuation is arguably nonsensical.
- mywittyname 4y ago
  It doesn't need to lose 90% of its value overnight, 30% is enough to trigger a call on margin loans. Within the past year, Telsa stock slide from a $1209/sh peak to $766/sh in the span of about five months.
  - littlestymaar 4y ago
    And what? Can't he just add more securities as a collateral if it happens?
    - HWR_14 4y ago
      If he has it. At standard margin rates, he'd need to put up ~$140 billion in TSLA stock to cover his TWTR offer. How much can TSLA slide before he doesn't have that. Keep in mind, private companies (SpaceX, Twitter in this hypothetical) cannot be used for margin purposes.
      - tekknik 4y ago
        Why would he have tu up up almost 4x the loan amount? He just needs to cover the loan.
        HWR_14 4y ago
        When using stock as collateral for a loan, it's not uncommon to get a loan for 30% of the value of the stock. Certainly not 100%. In this case, MS has offered him a loan for 20% of the value of his stock.
        tekknik 4y ago
        You can still sell the rest of the stock and cover a majority of the loan. I still fail to see why you need way more money than the loan amount to pay it off.

jjav 4y ago

> I didn't even know credit scores got as high as yours. A bit of an aside, but the richest person I know (as in buys multi-million dollar cars on a whim and has many many of those) says his credit score is pretty mediocre because he's never had a loan. I'd thought having gazillion dollars in the bank would give you a good credit score but guess not.

no_wizard 4y ago
I imagine once you have a verifiable net worth over a certain amount (at least 10 million in near cash assets + a hefty amount on hand) you are able to bypass certain things the rest of us simply can't. This is what I've heard second hand anyway
- tekknik 4y ago
  Once you have a balance above a few hundred thousand your bank starts treating you differently. Sometimes you even get a different entrance to the bank, different tellers, so on.
smoldesu 4y ago
As another side note, the richest person I know regularly maxes out his credit card so he can pay it all down and rake in the score bump. Every couple times he does this, they issue him an upgraded card with less limits: the cycle continues. Not a bad way to buy stuff if you have the means to pay it off.
- devoutsalsa 4y ago
  Imagine the airline miles you’d get by purchasing Twitter on your credit card.
  - k_sze 4y ago
    “Nobody’s gonna try to buy Twitter with a credit card, right?” “Nah.” “Alright, we don’t need BIGINT in the ‘balance’ column.”

Sebb767 4y ago

As the saying goes: If I owe the bank one million dollars, I have a problem. If I owe the bank one billion dollars, the bank has a problem.

metadat 4y ago
Wrong in this case. Here the bank can reclaim what is owed via other means.
- sangnoir 4y ago
  Having to find "other means" to reclaim is exactly what makes it the banks problem. Do you think it's easy to get someone with access to billions of dollars (of your money) to do something they'd rather not? They can tie you up in the courts for years since they're basically equal powers: an $800 billion bank doesn't get better lawyers than a guy worth $1 billion. A bank vs someone with just a million dollars means the individual is at a major disadvantage as lawyer fees can easily exceed that amount in attritional lawfare.
  - timmytimthetim 4y ago
  - Sebb767 4y ago
    Also, the reason the bank suddenly wants to reclaim that money might be that the wealth has vanished. If Tesla drops 99% for whatever reason, they will have a big problem getting their money back from stocks.
    - sangnoir 4y ago
      That's a great point: counterparty risk is a much bigger concern on a billion-dollar loan
rasz 4y ago
The saying goes: "If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem." and comes from 1976 "As I see it: the autobiography of J. Paul Getty". There were no billionaires back then. When you owe a bank 20 Billion while being worth 260 you are still in the first category.