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- 2011-7-2
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3#
发表于 2011-8-2 04:05
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Part of me wants to laugh at how we try to justify our prices based on discount rates. The risk free assumption is the least of our worries. What does the discount rate matter if you mess up your cash flow projections--or if the market disagrees with you? Assumptions, expectations, luck, and a way out when we want it--that's really the game we're all interested in, isn't it?
That's my two cents, here's the other:
Been thinking of this for a while. If the U.S. decides not to raise the debt ceiling, people are saying interest rates will go up. I'm wondering if this is in fact true. By that, I mean, is there enough high quality paper floating around in the world to satisfy the demand of investors. If suddenly, there are no new treasuries, won't investors have to buy something else--agencies, corporates, mbs's, muni's etc? Wouldn't that demand for other paper actually drive down the cost of borrowing for the private sector, regardless of what happens to treasury yields? |
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