Re: (TFT) Hedge Wizardy and industrial magic

[ErolB1@aol.com]

In a message dated 9/18/2003 3:54:40 PM Central Daylight Time, 
mtapley@swri.edu writes:


> The 2%/week interest seems reasonable to me, for an unsecured loan. 
> Even secured loans should be high, because "nations" are small and a 
> person's valuables (mostly himself and his skills) so portable. It's 
> too easy to skip out on a loan, so rates should reflect that.

2%/week for an unsecured loan for a really bad credit risk, maybe. 

How often do you imagine borrowers skipping out? 2%/week with an 0.2%/week 
real interest rate assumes something like *60%* of all borrowers skipping out 
after one year. 

-- 
Erol K. Bayburt
ErolB1@aol.com
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