Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: EL KABONG!!! who wrote (20587)	7/8/2002 5:58:21 PM
From: Maurice Winn	Read Replies (2) of 74559

Kerry, debt is a continuum and there is no 'safe' level. That's like the 'safe' level of DNA-damaging radiation. It's not really safe, it's just that the risk is so low that the events which will precipitate debt repayment failure are very low. It's all about risk management and what's sensible in the view of the borrower and lender. Some lenders might think that lending 100% with no assets for security, for a venture 90% likely to fail, is a good investment. They will expect a very large profit if success is achieved. Trying to categorize debt levels as 'safe' or 'necessary' or 'needed' or 'good' or 'bad' should be a matter for the lender and borrower. I hadn't really thought of debt as an invention, but it is. When I tried to think of something more important as an invention, I decided debt is right up there as one of the most important inventions. Mq

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