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New troubles for Vick...

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ChadTower:

Makes sense.  I didn't know people in that purgatory were on probation.

So basically he keeps getting dumber and dumber.

abrannan:

--- Quote from: ChadTower on September 26, 2007, 09:46:44 am ---
Why the hell would a guy with a $100mil contract need to borrow a small sum like $2.5mil, and from a Canadian bank, no less? 

--- End quote ---

Certain loans can be tax-advantageous, particularly when they're used for investments.  If you can be reasonably sure that Interest - Tax WriteOff < Interest Earned - Capital Gains, it's advantageous to do so.  Using other people's money to do it just allows you to offload some of the risk.  It's like stock traders buying on margin, using other people's money to take advantage of a situation.

Besides, a $130 million, 10 year contract is generally backloaded, so even without his current legal issues, he'd likely not see a good sized chunk of that money.  The $37 mil in guaranteed bonus money is nice, but split out over 10 years is only $3.7 mil a year.  If you make $37,000 a year, it is not unreasonable to obtain a $25,000 loan to remodel a home, or other "investment".  Yes, I realize that when you're up at that order of magnitude things are a bit different, but large money loans to the already welathy is not an uncommon situation.

 

ChadTower:

Vick's contract was dramatically front loaded with a massive amount of signing bonus money.  He got tens of millions when he signed it and the only prorating that went on was what counted against the salary cap, not what he actually received.

His contract was designed so that his actual year to year salary wasn't all that high and he was written a massive couple of checks over the first two years to make up for it.

Hoopz:

--- Quote from: abrannan on September 26, 2007, 03:10:01 pm ---
--- Quote from: ChadTower on September 26, 2007, 09:46:44 am ---
Why the hell would a guy with a $100mil contract need to borrow a small sum like $2.5mil, and from a Canadian bank, no less? 

--- End quote ---

 It's like stock traders buying on margin, using other people's money to take advantage of a situation.
 

--- End quote ---

The difference is that most traders look at shorter term situations, albeit on larger amounts, and their cost to borrow is significantly lower than the interest that he was probably paying.  If you look at the LIBOR rate from a year ago, it was around 5.3%.  If he was being charged 9%, and I don't know that he was, it creates a much different scenario for what he would have to be earning to make this situation make sense.

ChadTower:

And as we all know the guy isn't SMRT enough to do these things.  I wonder if his agent was taking him for a ride and it all blew up ahead of schedule.

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