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Joeshlabotnik
Joeshlabotnik
Joined: Jul 27, 2016
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September 11th, 2016 at 1:18:44 AM permalink
Actually, there is no such thing as predatory lending, in any context, in any situation, assuming, of course, that there is no coercion involved. As long as the borrower is an adult and legally capable of executing a contract, there's nothing "predatory" about such a contract, even if it's a crappier deal for one side than the other.

In this specific case, if anyone was getting "had," it was the casino, making an interest-free, no-fee loan while assuming the (substantial, as it turned out) risk of not getting repaid. Maybe that means that Forrest was guilty of predatory borrowing.

And BTW, what genius approved cashing Forrest's checks, anyway? It must have been well known in poker circles that Forrest was circling the drain. What made them think that the risk of not getting repaid was tolerable?
odiousgambit
odiousgambit
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September 11th, 2016 at 3:16:23 AM permalink
Quote: Joeshlabotnik

Actually, there is no such thing as predatory lending, in any context, in any situation, assuming, of course, that there is no coercion involved. As long as the borrower is an adult and legally capable of executing a contract, there's nothing "predatory" about such a contract, even if it's a crappier deal for one side than the other.

In this specific case, if anyone was getting "had," it was the casino, making an interest-free, no-fee loan while assuming the (substantial, as it turned out) risk of not getting repaid. Maybe that means that Forrest was guilty of predatory borrowing.

Interesting viewpoint.

Quote:

And BTW, what genius approved cashing Forrest's checks, anyway? It must have been well known in poker circles that Forrest was circling the drain. What made them think that the risk of not getting repaid was tolerable?

This question gets asked over and over again, just as I was asking almost 40 years ago when my acquaintance got himself murdered. The thing that causes the confusion is the assumption that the casino is lending to a Mark under the same imperative need of repayment they would have if they loaned it to just anyone.

If you put yourself in the shoes of the casino having found themselves a nice Mark, I hope you can see the difference.

You offer a game in which you have a large edge to someone you find can't stop himself from playing and playing, and is pretty much assured to give it all back.

Very important: The 'credit' is only good for making bets with you at this game.

At the beginning you know he has a lot of money.

At another point, you know you have all of his money.

So, what does it hurt to be sure you have it all? He'll get more money somehow too. You let him continue to play with this special kind of credit. What is the risk? He always gives it all back. Maybe he lives off some small part of it when he gets lucky, but remember, you took *all* his money already. This new special kind of loan, 99% of it, you are going to just get it back. For one thing, when he does win, you'll be demanding he pay off his debt. And the state will help you collect this debt.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
DRich
DRich
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September 11th, 2016 at 8:31:43 AM permalink
Quote: odiousgambit


Forrest indeed might have been encouraged to think it was just a loan. Not a bad check writing situation.



Although I agree with you that casino credit can be predatory, he was very familiar with the system and knew exactly how it worked.
Order from chaos
onenickelmiracle
onenickelmiracle
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September 11th, 2016 at 9:22:58 AM permalink
Quote: Joeshlabotnik

Actually, there is no such thing as predatory lending, in any context, in any situation, assuming, of course, that there is no coercion involved. As long as the borrower is an adult and legally capable of executing a contract, there's nothing "predatory" about such a contract, even if it's a crappier deal for one side than the other.

Predatory lending I understand would be lending which is ultimately dishonest, fraudulent, deceptive, or unpayable by design, or more profitable by default than repayment. That's my gist. Court troubles are a burden to society and we should not have disputes rely on the government unwillingly to be part of the business model when other means are available. Do you consider these criminal tools to be the coercion you speak of, or are your views just that radical? I almost don't even believe you believe what you say you believe, it's so unbelievable.
I am a robot.
MathExtremist
MathExtremist
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September 11th, 2016 at 11:13:56 AM permalink
Quote: Joeshlabotnik

Actually, there is no such thing as predatory lending, in any context, in any situation, assuming, of course, that there is no coercion involved. As long as the borrower is an adult and legally capable of executing a contract, there's nothing "predatory" about such a contract, even if it's a crappier deal for one side than the other.

Suddenly you're a libertarian? Of course there are transactions that are manifestly unfair and should be regulated or prohibited. That includes not only usury but heavily tilted wagers. Do you actually think a casino should be able to offer a slot game with a 40% RTP? What about a lender offering a mortgage with a 40% interest rate?

The doctrine of unconscionability is a legitimate one. Predatory lending / usury definitely qualifies.
"In my own case, when it seemed to me after a long illness that death was close at hand, I found no little solace in playing constantly at dice." -- Girolamo Cardano, 1563
Joeshlabotnik
Joeshlabotnik
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September 11th, 2016 at 11:28:04 AM permalink
Quote: onenickelmiracle

Predatory lending I understand would be lending which is ultimately dishonest, fraudulent, deceptive, or unpayable by design, or more profitable by default than repayment. That's my gist. Court troubles are a burden to society and we should not have disputes rely on the government unwillingly to be part of the business model when other means are available. Do you consider these criminal tools to be the coercion you speak of, or are your views just that radical? I almost don't even believe you believe what you say you believe, it's so unbelievable.



Yep, that horribly insanely ridiculously radical position is exactly what I believe. People--idiots included--should be responsible for their actions. The subprime mortgage crisis was supposedly caused by all those beeeeg eeeeeevil banks forcing loans down the throats of struggling, futilely resisting borrowers. The populist contention was/is that the great unwashed couldn't be expected to comprehend mortgage loan agreements, which contained arcane concepts such as that you were borrowing money and were expected to pay it back. Understandable, of course, given that the contracts were full of numbers and big words and stuff.

I actually don't want, and because I have a brain, don't need, the government monitoring and possibly interdicting every transaction I undertake. I'm all growed up, and if I'm being charged too much for that pack of gum at the convenience store, so be it. Let Gupta continue with his predatory gum-pricing practices; I can always choose not to do business with him.
TomG
TomG
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September 11th, 2016 at 2:43:31 PM permalink
Quote: Joeshlabotnik

The subprime mortgage crisis was supposedly caused by all those beeeeg eeeeeevil banks forcing loans down the throats of struggling, futilely resisting borrowers.



The problem with the mortgage crisis was that the banks gave loans to people they knew would default and then insisted on a government bailout.

Can I go to a Ferrari dealership and write a check for $200,000 and then just drive away in a new car without them first seeing if the check is good? That's essentially what the Wynn did with Ted Forrest and what the banks did with subprime mortgages.
TomG
TomG
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September 11th, 2016 at 2:47:48 PM permalink
Quote: MathExtremist

Do you actually think a casino should be able to offer a slot game with a 40% RTP? What about a lender offering a mortgage with a 40% interest rate?



I would be perfectly fine with banks and casinos being allowed to avoid these sorts of government regulations so long as they also receive no government protections. I wonder if any banks would be willing to tell their customers they don't get FDIC protection, but in exchange they are allowed to pay much higher interest rates on their mortgages.
Boz
Boz
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September 11th, 2016 at 3:17:28 PM permalink
I bring it down to liberals always thinking banks are bad and those who don't pay debts are "victims". And the rest of the country believes in personal responsibility and paying back your debts. Even if it means taking out 2 or 3 jobs because you should be smart enough to understand what you are signing. I refuse to believe people are that f'n stupid to not consider everything when signing their name. And if people are that stupid, good for anyone smart enough to exploit them.

And as to Hillary ME's question....yes, banks should be able to offer any interest rate they want. And if someone is stupid enough to borrow at 40%, you also understand who and what you are dealing with.

I for one loved Western Sky Financial. They even said in the ad "The money isn't cheap but you'll have it tomorrow.". Borrow $10k, pay back 41k, all about risk to reward as a business.

Many of us know guys who work on the streets at 1 point a week or more. You know who you are dealing with. Borrow $1000, you owe $100 a week until you pay the dime back. No one forcing you to put your hand out.
TomG
TomG
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September 11th, 2016 at 3:35:46 PM permalink
Quote: Boz

No one forcing you to put your hand out.



No one is forcing the banks (or in this case the casino) to make loans that are so clearly going to go bad. Why are they the ones to get government bailouts when they do stupid things with their money?

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