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You don't need to appeal to cheeseburgers to not want to value 100 future dollars at 100 current dollars, if you can buy 100 future dollars for 80 current dolla
by morelisp 4y ago
You don't need to appeal to cheeseburgers to not want to value 100 future dollars at 100 current dollars, if you can buy 100 future dollars for 80 current dollars, which is essentially what happened when rates rose.
(Someone else is offering 100 future for 80 current because they have a forecast about cheeseburgers, sure. But you don't have to agree with that forecast to take their deal; the deal looks even better for you if you don't agree.)
- s1artibartfast 4y agoThe whole point of HTM as an asset class is that you dont plan to sell it. Think of how you would report a non-transferable asset with maturation on your balance sheet? How would you report savings in a CD with a steep early exit penalty? Herein lies the difference between a list of assets, and a list of asset liquidation value.