Comments on: Art museum discount rate datapoint of the day http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Donald A. Coffin http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/comment-page-1/#comment-6564 Wed, 09 Sep 2009 18:53:28 +0000 http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/#comment-6564 I somehow think the art world could survive the closing of a museum at which (apparently) the hot upcoming exhibits are “…exhibitions on baseball-related art and the art of the tattoo…”

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By: dsquared http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/comment-page-1/#comment-6533 Wed, 09 Sep 2009 06:41:25 +0000 http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/#comment-6533 18% would work if the city was planning on setting up a risk-free annuity of $569k and hypothecating it to the museum. As a discount rate on something that looks like a very dicey bird-in-the-bush, it’s not unreasonable.

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By: najdorf http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/comment-page-1/#comment-6519 Tue, 08 Sep 2009 19:59:39 +0000 http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/#comment-6519 Once they admit that they owe $3M on the bonds, there will be no way to avoid payment other than default (sure loss in either case) and in return they get funding in a yearly city budget that is subject to change every year. On the other hand, if they deny responsibility, maybe they lose funding and maybe the city caves (unsure thing). In the current CA economy, would you really rather take on a 3M liability than risk losing the asset of future city support subject to yearly budget votes?

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By: quantacide http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/comment-page-1/#comment-6513 Tue, 08 Sep 2009 18:36:44 +0000 http://blogs.reuters.com/felix-salmon/2009/09/08/art-museum-discount-rate-datapoint-of-the-day/#comment-6513 I can’t imagine it is because they don’t understand the time value of money. I think they are thinking they can keep the $569 and not repay the debt at the same time — so socialism, and not financial ignorance — wins. (Although after dealing w/ some nonprofits, it is clear that the smaller ones will definitely make poor financial decisions b/c they get steamrolled by the Street.)

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