
Financing Investment In A World Without Maturity Transformation - timf
http://www.macroresilience.com/2013/10/08/financing-investment-in-a-world-without-maturity-transformation/
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lake99
> I have nothing against the kickstarter approach. But it is insane to allow
> individuals to collectively donate millions to dollars to ventures without
> any ownership stake while at the same time barring them from funding the
> same projects and receiving an ownership stake in return.

In other words, "I have nothing against kickstarter, but it is insane _to
allow_ kickstarter to exist as it is". Contradiction alert!

> Almost all the criticisms of capitalism are derived from the pathologies of
> institutional fiduciary capitalism.

Having read on and discussed the topic extensively, I'd say that "almost all"
is completely unjustified.

> However we can do better than allowing individuals to donate money on a hope
> and a prayer.

Odd seeing such a claim from a self-confessed supporter of capitalism.

> If we want capitalism to become less selfish, we need to enable each
> individual to become a capitalist.

Does he mean like owners of capital assets doing what they wish with it, as
long as it doesn't infringe on the rights of others?

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sp332
That comment isn't anti-Kickstarter. It's saying: since KS exists, why aren't
we also allowed to do this better thing?

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positivejam
Exactly. The article is not saying it's insane to allow Kickstarter donations,
it's insane that current law makes it just fine to donate to a risky venture
but not to invest and get a chance to share in the venture's upside.

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macroresilience
author of the post here - this is exactly what I meant.

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lake99
I wouldn't have interpreted it the way I did, had you written "I have nothing
against the kickstarter approach. But when individuals are allowed to
collectively donate millions to dollars to ventures without any ownership, it
is insane to bar them from funding the same projects and receiving an
ownership stake in return."

This retains most of your words, but what you find insane is less ambiguous
now.

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rayiner
> And the answer is that rates would be lower than they would be in a
> maturity-transforming system. Maturity-transforming banking is redundant –
> it only gives us recurrent financial crises. The idea that in the absence of
> bank maturity transformation, lending rates would explode has been
> disproven.

First, serious writers don't need to bold their punch-line sentences so you
know that they're punchline sentences.

Second, showing low P2P lending rates in a tiny market during a period when
lending rates are generally in the toilet does not "disprove" the need for
banks.

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simonh
Indeed. In a tiny market, with low to non-existent legal and regulatory
overhead. I know, let's make it a 'proper' market with legally enforceable
terms and contractual relationships, leading to lots of legal and regulatory
overhead. That's bound to fix the problem!

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PaulHoule
The "accredited investor" thing has to end.

There are ETFs today that anybody can buy that will only give complete
information to "accredited investors". That doesn't protect consumers.

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dev_jim
If it trades on the public U.S. equity markets then there's no special
information available to accredited investors.

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kfk
So, I invest/lend 100. The SME fails. Who is persecuting them? I don't want to
chase each failed SME to get the money back.

I mean, you still need middle men. Nobody has willing, knowledge or time to
rate, follow and persecute a bunch of SME's.

I would love laws and tools to lend to companies I know well although. Like
companies of friends or friends of friends. But that is impossible now.
Another big topic is discounting invoices, somebody here? Interesting topic
with real hassle.

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cowls
I think you misunderstand, If you invest in a business that fails, you lose
your money..

You dont get to "persecute" anyone. Thats the risk of the investment

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brazzy
So con men who do nothing but run sham businesses and live off invested money
have nothing to fear?

There must obviously be some sort of redress in the case of ouright fraud. But
then, how do you distinguish malice from incompetence?

That's how the SEC got started...

~~~
cowls
Yes thats different.

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microcolonel
Banks are big because people's money is forced in by monetary supply
inflation; it loses value when they actually save it.

Banks are crap because of regulation in a forced market: You basically have to
put your money in a bank to counteract inflation, but becoming a bank is VERY
difficult, so is competing with ones which will always be bailed out.

U.S. has the same issue with healthcare. Becoming a healthcare provider in the
U.S. is incredibly difficult, even moreso becoming a healthcare insurer, and
as such they consolidate and crapify as far as they can without making it bad
enough to justify competing with them despite the regulatory barriers. Then
all your drugs have to be FDA approved(which takes more than a decade at
least), and many of them will be produced under one or more patents which also
raise the cost of the medication.

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antocv
I liked the part where he says Kickstarter sucks because you donate your money
to them without a stakeholder position or ownership in your investment of any
kind. Its the reason Ive kept my money in my wallet and not thrown it around
on kickstarter-projects, instead donated to FSF, EFF and Wikileaks among
others.

Any takers to start up a kickstarter-clone without donation but part
ownership? With pledges for more money to throw into project when it reaches a
threshold and so on. Basically what we had 100 years ago with normal public
stock traded companies but in a digital world.

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melling
I don't see why it's important that you become an owner. You are helping to
fund what you believe is a worthwhile product.

When you buy an Android or iOS phone, for example, you are helping to fund a
company. You don't get ownership for that company.

By funding individuals, or small groups, I believe that most are efficiently
using the funds, and you are getting products that most larger companies
couldn't be bothered with.

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kazagistar
The problem is, you don't have any assurance of getting anything.

My condition for kickstarters is some kind of open sourcing clause, so that
even if the creator fails, you are still assured of some kind of partially
finished product.

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droidist2
Interesting idea. If you go bust, your intellectual property gets turned over
to everyone like so much piñata candy.

