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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.
by 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 agoWrong in this case. Here the bank can reclaim what is owed via other means.
- sangnoir 4y agoHaving 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 agoAlso, 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 agoThat's a great point: counterparty risk is a much bigger concern on a billion-dollar loan
- rasz 4y agoThe 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.
- opo 4y agoThere were obviously billionaires back then. For example, J. Paul Getty was worth an estimated 6 billion when he died in 1976. https://en.wikipedia.org/wiki/J._Paul_Getty https://en.wikipedia.org/wiki/J._Paul_Getty