Now he’s driving their investment into to the ground so the banks will end up writing off most of the debt rather than asking for repayment. So far, it seems to be working.
Maybe I’m financially illiterate, but I don’t understand how that works. Like… if I take out a loan to buy a house and then deliberately burn down the house, that doesn’t get me off the hook. If anything, I’ll probably end up going to prison to boot. Why exactly would the banks just write off Musk’s debt instead of going after him and his other assets in court?
Most of the money in the world economy is known as “Book Money.” It exists only because an investor somewhere decided it did and invested based on that number. When a bank or investor stops thinking it’s worth that much one of the things they can do is a Write Down. The money (which never really existed anyway) ceases to exist, the banks books (and possibly their rating as a lender) are affected, the investee should become considered a bad investment, and the money is deleted from the world. But there are no other real consequences unless the investor or investee destroys enough of their wealth that they become insolvent.
You bought your house with earned money. Real money. It can’t just be erased in the same way because you played by the rules the whole time.
Maybe I’m financially illiterate, but I don’t understand how that works. Like… if I take out a loan to buy a house and then deliberately burn down the house, that doesn’t get me off the hook. If anything, I’ll probably end up going to prison to boot. Why exactly would the banks just write off Musk’s debt instead of going after him and his other assets in court?
Because laws are for poor people silly goose
Most of the money in the world economy is known as “Book Money.” It exists only because an investor somewhere decided it did and invested based on that number. When a bank or investor stops thinking it’s worth that much one of the things they can do is a Write Down. The money (which never really existed anyway) ceases to exist, the banks books (and possibly their rating as a lender) are affected, the investee should become considered a bad investment, and the money is deleted from the world. But there are no other real consequences unless the investor or investee destroys enough of their wealth that they become insolvent.
You bought your house with earned money. Real money. It can’t just be erased in the same way because you played by the rules the whole time.
Wait, huh? So anyone can just print money by investing it? Or is it hypothetical money tied to the value of something?