3 ms·

That's the essence of loaning money; the central difference between medieval and modern economies.

• blacksmith_tb 12y ago
  But I would have thought the rationale was that lenders accepted some risk (that borrower would default) for a chance to realize some profit (when the borrower pays). What the NYT article sketches out is a system where debts are created seemingly without the intention that they be repaid; the only way I can wrap my head around it is that those losses are calculated, and that overall lending and selling on is profitable. But it does seem like turtles all the way down - real people used imaginary money to buy real things (or services from other real people), and then the imaginary money (mostly) disappeared. All that's solid melts to air.
  • kaonashi 12y ago
    Well, that doesn't mean there can't be fraud involved. There often is, and that's when things tend to fail spectacularly.