So I want to make this post as gentle as possible but it touches issues that are for some reason quite emotional with me. I feel the call of the shrill.

The more I here people talk about the issues surrounding first the financial crises, inflation and now the debt ceiling the more it makes sense to me why Wall Street pays such enormously high salaries.

For example, there is this meme going around in reference to the debt ceiling were folks are asking rhetorically: If you keep hitting your credit card limit should you always raise you limit?

Is this a serious question? Of course you should always raise your limit. If the Red Sox win the World Series you should raise your limit. If you dog takes a poop in the park you should raise your limit. If it rains on Tuesday in July you should raise your limit.

Why?

Because you should always raise your limit. The whole point of the limit is to protect the creditor against you. If he willing to forgo that, take it.

Trying to play games with your credit score aside, it is always but always better to have more liquidity than less.

It is always but always better to be playing with or have the potential to play with someone else’s money. It is always but always better to have more credit and to be more heavily leveraged.

The only question is the price you have to pay. The carry and the exposure.  However, the carry on a limit raise is zero, there is no exposure and the asset is pure liquid. You always take free liquidity.

Imagining a friend of mine saying, “Hey I was just offered a bunch of liquidity at zero carry, should I take it?”  is like having a single male friend ask me, “Hey Monica Bellucci just asked me to spend the weekend in Aspen with her, should I take it?”

Well, are you a crazy person? Do you make it habit of throwing away option value and weekends with iconicly beautiful women?

Maybe some people do.

Maybe some people do.

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