04 December 2008

dreaming in numbers and asking wtf ?

the combination of boredom and curiosity can lead to more questions and strange answers. case in point, imagine you possess the wealth of a Warren Buffett or a Bill Gates (dozens of Billions of $$$) it should then be fairly easy to imagine that lots of people would be asking you for money, yes ? hard luck stories or wild invention ideas etc. some not looking for a handout, but perfectly willing to pay for the use of the money with interest. so you decide to loan them $10Million for 90 days. How much in excess of the ten mil would you want/expect them to pay you back in three months time ?
on today's 3 month U.S. Treasury Bond, people are "loaning" the U.S. Government $10 MILLION for 3 months under a contract to be repaid $10 Million plus $2,500 at the end of 90 days. (.001% annualized = .00025% for one quarter of a year)

now why would anybody do that ?