With the announcement of deposit insurance by the government for all our dodgy finance companies, being an economist who understands the concept of moral hazard (although in this case it would actually be adverse selection given that I would enter into the contract with government with the intent of exploiting an information asymmetry), I thought I would start my own finance company. Here’s what I figured would go on our ads which will feature a very trust worthy has been celebrity telling you how much you can trust us (any suggestions?).
Agnitio Finance will exclusively invest in the highest risk hedge funds available. We will offer an interest rate on deposits of 30%. While there will be a serious disconnect between the riskiness of our assets and liabilities, don’t worry, we offer extensive deposit insurance, which you don’t actually have to pay for. In fact, you get to share the cost of this insurance with every other tax payer in the country!
Agnitio Finance: Zero Down side
17 comments
3 pings
Matt Nolan says:
October 14, 2008 at 11:59 am (UTC 12 )
Sounds beautiful. Don’t forget that the RBNZ will “regulate” you.
I can’t believe that the RBNZ can’t set different rates on the insurance based on risk!!!!
Matt Nolan says:
October 14, 2008 at 12:04 pm (UTC 12 )
“Here’s what I figured would go on our ads which will feature a very trust worthy has been celebrity telling you how much you can trust us (any suggestions?).”
I would go for Russel Crow – just because he seems like a no-nonsense sort of guy. However, it might be better to go for an All Black so you get the “go New Zealand feeling”.
Maybe Sean Fitzpatrick? He is a motivational speaker now!
Kimble says:
October 14, 2008 at 12:45 pm (UTC 12 )
Karl Burnett, formerly Nick from Shortland Street.
Ironic much?
agnitio says:
October 14, 2008 at 12:50 pm (UTC 12 )
lol, from his wikipedia entry
Burnett now works as a boom operator on the show, after admitting that he had blown all the money he earned as an actor on cars and “fast living”
Sounds perfect:)
harshal kulkarni says:
October 14, 2008 at 9:15 pm (UTC 12 )
hi, nice one.
Miguel Sanchez says:
October 15, 2008 at 3:19 pm (UTC 12 )
Ah, but first you’ll have to lure depositors away from my new company, Redorblack Finance. We will be investing exclusively in Circular Random Number Generators (CRNGs) located in certain licensed institutions. By not diversfying across CRNGs we can pass on the maximum returns to our investors, and in the event that our unique risk management approach (magic lucky underwear) provides suboptimal performance, your deposits are backed up by the full faith and credit of some other guy.
agnitio says:
October 15, 2008 at 3:26 pm (UTC 12 )
man, I thought I was the only person who knew about magic lucky underwear!
it does sound impressive. However, I am insterested in who you are going to use as your celebrity endorsement?
Miguel Sanchez says:
October 15, 2008 at 3:36 pm (UTC 12 )
Eh, those celebrity endorsements are clearly the kiss of death – I was just thinking of using a chip with a smiley cartoon face. We do have a slogan though: “It’s cool, we’ve got a system”.
Miguel Sanchez says:
October 15, 2008 at 4:05 pm (UTC 12 )
Whoops, looks like the RBNZ has gotten wise to our scheme. Oh well, fun while it lasted.
agnitio says:
October 15, 2008 at 4:43 pm (UTC 12 )
I saw Dr. Bollard saying it was a porblem, I haven’t read how they plan to deal with it?
Matt Nolan says:
October 15, 2008 at 6:11 pm (UTC 12 )
“I saw Dr. Bollard saying it was a porblem, I haven’t read how they plan to deal with it?”
In their infinite wisdom they will ferret out the finance companies that will cause trouble ex-ante. As a result, your sales pitch will have to be especially good
agnitio says:
October 15, 2008 at 6:13 pm (UTC 12 )
interesting, do you have a link to where they have described how to they will do that?
Miguel Sanchez says:
October 15, 2008 at 7:08 pm (UTC 12 )
Actually I was referring to this:
http://www.rbnz.govt.nz/news/2008/3465774.html
Matt Nolan says:
October 15, 2008 at 7:25 pm (UTC 12 )
http://www.rbnz.govt.nz/news/2008/3465774.html
Matt Nolan says:
October 16, 2008 at 7:25 am (UTC 12 )
How about that Miguel – we’re twins
agnitio says:
October 16, 2008 at 7:36 am (UTC 12 )
hopefully for Miguel’s sake not identical:P
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October 19, 2008 at 11:51 am (UTC 12 )
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