> How the hell do you default on a $45 million loan at the same time while buying another property in the same area for $27 million?
Similar to how you can restructure your medical debt, which doesn’t show up on credit reports anymore, while buying a new car on financing. Separate sets of books.
The hoi polloi want their debt paid by the public. Private capital eats the loss here. kind of different.
different entities.
make new entity, sell new bonds with a new proposal on how new people will potentially make money.
Real estate is the messy underbelly of capitalism. Since only debt (= mortgages) creates money (and growth) you have to cut them some slack. The economy won't work if you're asking too many questions.
> Since only debt (= mortgages) creates money
Mortgages aren’t only one among many phyla of dollar-denominated debt, they‘re not even the biggest [1][2]. And fiscal spending can create new money without debt. Debt is the monetary channel’s mechanism.
[1] https://www.statista.com/statistics/274636/combined-sum-of-a...
[2] https://en.m.wikipedia.org/wiki/National_debt_of_the_United_...
Wouldn't fiscal spending devalue the currency since this money has to be "printed" instead of lent?
This is the kind of stuff that pisses everybody off. The hoi polloi get raked over the coals for college loans while the haut monde blithely skip right past $40 million in debt.