Of course this would raise capital costs. That is a feature, not a bug. We have seen the results of underpricing credit risk.
Of course this would raise capital costs. That is a feature, not a bug. We have seen the results of underpricing credit risk.
Oct 1 2012
An argument I've repeatedly had with Tyler Cowen:Tyler: We're stagnating!Bryan: No we're not. You're ignoring massive CPI bias. We live in an age of consumption-biased technological change. Official numbers don't adequately adjust for quality improvements, and utterly ignore the mountains of free stuf...
Sep 30 2012
Megan McArdle is back blogging regularly. I happened to come across this one: "America Really is Exceptional." It's very good. Some highlights: I actually don't think that the latter point is true; if you plucked an average American (mean, median, or modal) out of Kansas City or Aurora, and plopped them down in the ...
Sep 30 2012
On Speed Bankruptcy: Of course this would raise capital costs. That is a feature, not a bug. We have seen the results of underpricing credit risk.
READER COMMENTS
Norman Pfyster
Sep 30 2012 at 1:44pm
It would raise the cost of capital by changing the legal structure of bankruptcy. I’m not certain how that would qualify as wise.
Shayne Cook
Oct 1 2012 at 9:17am
Do you or Greg have any estimation/postulation of how much Speed Bankruptcy would raise debt capital costs?
(I do.)
Greg G
Oct 1 2012 at 1:38pm
The markets would and should determine how much debt capital costs would rise and they would vary as markets always do. If you have a better idea than most people of what these markets will do in the future that should be very profitable for you.
As always, investors will end up choosing from the choices actually available to them, not from the choices they wish were available.
Shayne Cook
Oct 1 2012 at 8:12pm
Thank you, Greg.
That’s not only an answer to my question, it’s the one and only correct answer to my question!
Comments are closed.