Quote:
Originally Posted by metronome
wait a minute I dont get it.......
how can they sell the credit to another company ?
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(Yeah, I know this is a super-late reply...)
You're overthinking it. Lawrence incurs 47 Lumione debt to Latoperion (sp?), which he uses to buy armor at the market price. Latoperion know that the market is about to crash, so they quickly comply; their loss, as they account it, is the price of the sets of armor, which they knowknow they won't be able to sell for anything nearly as much as 47 Lumione.
Now, the debt that Lawrence owes to Latoperion can be sold to Remerio. This just means that Latoperion, instead of waiting for Lawrence to pay the 47 Lumione, gets Remerio to pay X amount to Latoperion now, in exchange for Lawrence's future payment of 47 Lumione (or in the case Lawrence can't pay up, anything that the creditor recovers).
How much are Latoperion willing to sell Lawrence's 47 Lumione loan for? Since they expect he won't be able to pay back the 47 Lumione, they should be willing to accept something like the value of all of his belongings, and if debt bondage exists in their society, the value at which he can be sold as a debt slave.
So suppose Remerio don't know that the armor market is going to crash. Latoperion can then sell them the 47 Lumione loan at a "good" price, say, 42 Lumione, by pretending that they have cash flow problems and need hard currency really fast. If Remerio buy the story, well, from their point of view they're making an easy 5 Lumione: they pay Latoperion 42 Lumione, and then Lawrence comes around and gives them 47 Lumione worth of armor which settles the debt.
If Remerio knows the armor market is going to crash, then Latoperion can't trick them like that, but they can still sell the debt at some value close to Remerio's estimate of Lawrence's net worth. Latoperion is willing to sell the debt because (a) they're not going to recover the 47 Lumione anyway, (b) conducting the bankruptcy proceedings is probably costly and risky is in Rubinheigen; Latoperion probably doesn't have the resources to prevent Lawrence from escaping from them, while Remerio probably can enforce the debt collection there. So Latoperion then sells the debt to Remerio at a discount to the estimate of Lawrence's net worth, and Remerio buys it because it expects to profit by collecting all of Lawrence's possessions (and possibly from selling him into slavery).