2 ms·
With the exception of corporate control, this is covered in my final sentence.
by anonymouskimmer 3y ago
With the exception of corporate control, this is covered in my final sentence.
- HWR_14 3y agoNone of my costs had to do with middlemen.
- anonymouskimmer 3y agoLoan 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, but regardless 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, which is why I said I agreed with the comment I was replying to.