The visible hand in economics

Agnitio Finance: Coming soon

Posted on: October 14, 2008

With the announcement of deposit insurance by the government for all our dodgy finance companies, being an economist who understands the concept of moral hazard (although in this case it would actually be adverse selection given that I would enter into the contract with government with the intent of exploiting an information asymmetry), I thought I would start my own finance company. Here’s what I figured would go on our ads which will feature a very trust worthy has been celebrity telling you how much you can trust us (any suggestions?).

Agnitio Finance will exclusively invest in the highest risk hedge funds available. We will offer an interest rate on deposits of 30%.  While their will be serious disconnect between the riskiness of our assets and liabilities, don’t worry, we offer extensive deposit insurance, which you don’t actually have to pay for. In fact, you get to share the cost of this insurance with every other tax payer in the country!

Agnitio Finance: Zero Down side

20 Responses to "Agnitio Finance: Coming soon"

Sounds beautiful. Don’t forget that the RBNZ will “regulate” you.

I can’t believe that the RBNZ can’t set different rates on the insurance based on risk!!!!

“Here’s what I figured would go on our ads which will feature a very trust worthy has been celebrity telling you how much you can trust us (any suggestions?).”

I would go for Russel Crow – just because he seems like a no-nonsense sort of guy. However, it might be better to go for an All Black so you get the “go New Zealand feeling”.

Maybe Sean Fitzpatrick? He is a motivational speaker now!

Karl Burnett, formerly Nick from Shortland Street.

Ironic much?

lol, from his wikipedia entry

Burnett now works as a boom operator on the show, after admitting that he had blown all the money he earned as an actor on cars and “fast living”

Sounds perfect:)

Ah, but first you’ll have to lure depositors away from my new company, Redorblack Finance. We will be investing exclusively in Circular Random Number Generators (CRNGs) located in certain licensed institutions. By not diversfying across CRNGs we can pass on the maximum returns to our investors, and in the event that our unique risk management approach (magic lucky underwear) provides suboptimal performance, your deposits are backed up by the full faith and credit of some other guy.

man, I thought I was the only person who knew about magic lucky underwear!

it does sound impressive. However, I am insterested in who you are going to use as your celebrity endorsement?

Eh, those celebrity endorsements are clearly the kiss of death – I was just thinking of using a chip with a smiley cartoon face. We do have a slogan though: “It’s cool, we’ve got a system”.

Whoops, looks like the RBNZ has gotten wise to our scheme. Oh well, fun while it lasted.

I saw Dr. Bollard saying it was a porblem, I haven’t read how they plan to deal with it?

“I saw Dr. Bollard saying it was a porblem, I haven’t read how they plan to deal with it?”

In their infinite wisdom they will ferret out the finance companies that will cause trouble ex-ante. As a result, your sales pitch will have to be especially good 😉

interesting, do you have a link to where they have described how to they will do that?

Actually I was referring to this:

How about that Miguel – we’re twins 😛

hopefully for Miguel’s sake not identical:P

[…] Insurance Crackdown 16 10 2008 However much I was looking forward to launching my own incredibly risky finance company, I’m glad that the RBNZ and Treasury have tidied up what was a terrible decision by the […]

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