Personal Loan Agreements between friends

bigadaj · 10 October 2013 at 9:21PM

John1993 wrote: »

I don't think you've understood what I've written. I made the point that if a dealer agrees a deal and then finds that ten minutes later, (long before any contracts are exchanged), that it doesn't look so good any more (and profit margins are slim enough that ten minutes is enough time for a deal to double in value or be in loss), he would never consider even for a second reneging on it, it just doesn't happen.

Yes, defaults can happen later, which is why we pledge collateral to one another. If my counterparty bank has a deal with me that's £1m in my favour, then they need to deposit something North of £1m of securities or cash with me that very day. If the next day the deal has moved up to £1.1m in my favour, then they need to top up the collateral to reflect this.

You seem to be conflating willingness to honour a deal with ability to honour a deal. It's this that still surprises me around here, the number of people who are "struggling with debts", yet still putting money away for Christmas or a holiday.

But what is the real difference at the end if the day. You're also confusing people playing with their own money in the real world with a trader playing with client or banks money, in the latter case it might be embarrassing or damaging to a career but there's no skin in the game as is commonly quoted.

In your collateral example then surely this would mean that the investments banks would never fail woud,nt it, if that collateral were freely available.

My opinion is the exact opposite of yours, as in I can understand the lower reaches I'd society being manipulative and lacking intelligence and foresight, a sweeping generic statement I admit, and only applicable to a small minority in practice.

I can't understand a specialist and presumably highly educated individual taking reckless risks with other people's money, as we keep on finding time after time with the investment banks.

John1993_2 · 10 October 2013 at 9:28PM

bigadaj wrote: »

But what is the real difference at the end if the day. You're also confusing people playing with their own money in the real world with a trader playing with client or banks .

Playing?

I hope that you understand, after an asinine comment like that, why I'll not spend my time taking you through the nuances and details of a business in which I've spent the last few decades.

You want to equate your uninformed "opinion" with the educated views of a senior specialist. I understand that this is quite fashionable nowadays, but I'm not going to waste my time entertaining the idea that this is even a sensible starting point for an adult discussion.

I understand that you'll want the last word, and I'll happily give you this, I'll never respond to a post of yours again, as you seem to be here to try to pick a fight.

somethingcorporate · 11 October 2013 at 9:16AM

John1993 wrote: »

Playing?

I hope that you understand, after an asinine comment like that, why I'll not spend my time taking you through the nuances and details of a business in which I've spent the last few decades.

You want to equate your uninformed "opinion" with the educated views of a senior specialist. I understand that this is quite fashionable nowadays, but I'm not going to waste my time entertaining the idea that this is even a sensible starting point for an adult discussion.

I understand that you'll want the last word, and I'll happily give you this, I'll never respond to a post of yours again, as you seem to be here to try to pick a fight.

I'm not really sure what benefit your opinion about how this works in investment banking brings to the conversation. You're dealing with huge companies with lots of money - have a read of the lending money to friends and family thread to see the real consequences of individuals lending their savings to kin and life-long friends, real lives are ruined in the process and families torn apart. I work in corporate finance myself and regardless of how much money is made or lost no-one really gets hurt - it's just a job.

John1993_2 · 11 October 2013 at 10:20AM

somethingcorporate wrote: »

have a read of the lending money to friends and family thread to see the real consequences of individuals lending their savings to kin and life-long friends, real lives are ruined in the process and families torn apart.

Yes, which is why my advice is consistently, and strongly, that people should never, ever lend to friends and family. I've made the mistake of doing it twice (lending, not borrowing), amounts that weren't realy material to me, and never will again. I wish I'd just gifted the money, frankly, which I'd have been happy to do.

worried48 · 11 October 2013 at 11:10AM

I "lent" money just once, it was a substantial amount for me but the cause was very worthy. I had to struggle to raise the amount and it did cost me in terms of interest because it was money that would otherwise have been paid off my high interest card, but I really did consider the need to be sufficient and urgent enough for me to do that. I will be very surprised if I ever get the money back, the term "loan" was for the sake of the other person to save embarassment, not because I seriously expect to get it back. If by any chance I do ever get it back, that's a bonus. I think that's the only way to play it with loans to friends and family.

bigadaj · 11 October 2013 at 8:00PM

John1993 wrote: »

Playing?

I hope that you understand, after an asinine comment like that, why I'll not spend my time taking you through the nuances and details of a business in which I've spent the last few decades.

You want to equate your uninformed "opinion" with the educated views of a senior specialist. I understand that this is quite fashionable nowadays, but I'm not going to waste my time entertaining the idea that this is even a sensible starting point for an adult discussion.

I understand that you'll want the last word, and I'll happily give you this, I'll never respond to a post of yours again, as you seem to be here to try to pick a fight.

Well my asinine comment was provoked by your original one, with an analogy that was bizarre in itself, it's this sort of arrogance that means it's no surprise that bankers are held in contempt by many people.

Personal Loan Agreements between friends

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