Why do they call them “financial products”?
"They are called ""financial products"" because they are contracts that are ""produced"" by the financial industry. For example, you could also say that a car manufacturer does not sell you a car, but a contract that will gives you ownership of a car. And, if a contract is a service and not product, in that case a car manufacturer is only selling services. It seems like it is more about the definition of ""product"" than ""financial product"". I think that as long as something is produced by the effort of labor, it could be called a product, and since financial contracts are produced by the people working in the finance industry, they can be qualified as products too. Maybe this page of wikipedia could explain things better than I just did: http://en.wikipedia.org/wiki/Product_%28business%29"
"&gt; You failed to address the part where I said Tesla wants major car companies to compete. That has been the entire point all along, from the very start. And competition would be good for Tesla, because instead of Tesla alone having to spend resources on educating the ignorant public (e.g. you), this way other auto manufacturers would be able to help. And Tesla would have other yardsticks to compare to, and to say ""see, we're better than them."" Tesla welcomes this.   I didn't address it because there is no need to.  For the electric car industry to work as a whole yes there needs to be more competition.  TESLA's competitors, however, are going to wipe the floor with TSLA because TSLA is committing massive capital to old tech.  &gt; Auto companies are behind the times because they've outsourced nearly all of their engineering expertise. They are good at volume production and engines. That's most of what's left of any major auto manufacturer. So take away the engine, and they have nothing. To make a compelling EV, they need to start from scratch, and it takes years to develop a car. This is why competition hasn't come, and why compelling competition isn't coming. The only companies with somewhat compelling offerings are those who started very early - BMW and Nissan - or those who have partnered with Tesla - Mercedes and sort-of-Toyota. Porsche has a chance since they still have engineers, but they're dragging their feet. Everyone else is basically fucked. And not just because of the lack of engineering, but because of the nature of large companies. It takes a lot to right a large ship.  I'm not sure how to answer that.  It's all just speculation.  The competition is waiting for the first big mover to do just what TSLA is going.. being the first mover, then coming in and wiping the floor with them.    &gt;Companies will be loathe to release compelling EVs because they will compete against themselves, they will have to advertise the EVs as if they are better than their gas offerings which still make up 99% of their sales. This puts them in a sort of paralysis and they can't do anything about it. Someone is going to take bites out of their market share, and it's either going to be them or it's going to be Tesla.  That's just silly.  Car companies are in the market to sell cars.  Every new car model competes with an existing model.      &gt; In the real world there is specialization. Some companies design cars, others design batteries. &gt; Have you seriously never heard of vertical integration? My previous paragraph talks about the perils of the sort of specialization you're talking about. Because automakers have spun off all their expertise, they are not nimble enough to compete in a changing market. Vertical integration is not the answer to everything, but it is a very good way to make your company nimble and keep costs down if you can do it. That's what Tesla is aiming for. It's not a new concept...and the fact that you've never heard of it ""confirms my view that you don't understand the issues.""  If you want to argue that all of the last 30 years of free markets and the value of specialization is wrong, go ahead.   &gt; THE ACTUAL BATTERY COMPANIES wouldn't do it. But you think Musk knows more about batteries than the actual battery companies. &gt; Tesla has particular expertise about automotive batteries, yes. They do their own battery research and have their own IP and patents (which they've opened) related to it. And they have a partner, Panasonic, who is the leader in batteries. Did you know that? Did you know that Panasonic is partnering in the battery factory? Because it sounds like you didn't, which ""confirms my view that you don't understand the issues."" &gt; Panasonic is partnering in their battery factory, and will be responsible for much of the production. And Panasonic has been making quite a tidy profit on their battery manufacturing for several years thanks to Tesla.  They are committing massive capital to old technology.  That's a loser play, but it will help the industry as a whole and those that are going to come in with the next generation of batteries while TSLA is stuck with massive capital in lithium ion.   &gt; &gt; Literally in the same exact call that this article is about, on the same day, Panasonic and Tesla announced that Panasonic is spending massive capital for a plant to supply TSLA cars. Not only have they increased production at their own plant tremendously over the course of the last few years, they will end up spending a billion dollars on the Tesla plant.So no, you really, really don't understand it.   ""We haven't decided yet on the specifics of when or how much investment we will be making,"" Panasonic Chief Financial Officer Hideaki Kawai said at a news conference in Tokyo.  (http://www.marketwatch.com/story/panasonic-to-help-build-tesla-battery-plant-2014-07-31-84851841)  It seems Panasonic is not as optimistic about the plant as you are.  So the question is, why bother the big fanfare about a plant when all it is is a rough idea?  To keep the sucks putting up money." The implied intent is that balance transfers are for your balances, not someone else's.  However, I bet it would be not only allowed but also encouraged.  Why?  Because the goal of a teaser rate is to get you to borrow. Typically there is a balance transfer fee that allows the offering company to break even.  In the unlikely event that a person does pay off the balance in the specified time frame the account and is then closed, then nothing really lost. Its hard to find past articles I've read as all the search engines are trying to get me to enroll in a balance transfer.  However, about 75% of 0% balance xfers result in converting to a interest being accrued.  If you are familiar with the amount of household credit card debt we carry, as a nation, that figure is very believable. To answer your question, I would assume they would allow it.  However I would call and check and get their answer in writing.  Why?  Because if they change their mind or the representative tells you incorrectly, and they find out, they will convert your 0% credit card to an 18% or higher interest rate for violating the terms.  Same as if a payment was missed. From the credit card company's perspective they would be really smart to allow you to do this.  The likelihood that your family member will pay the bill beyond two months is close to zero.  The likelihood that a payment will be missed or late allowing them to convert to a higher rate is very high.  This then might lead to you being overextended which would mean just more interest rates and fees.  Credit card company wins!  I would not be surprised if they beg you to follow through on your plan. From your perspective it would be a really dumb idea, but as you said you knew that. Faced with the same situation I would just pay off one or more of the debts for the family member if I thought it would actually help them.  I would also require them to have some financial accountability.   Its funny that once you require financial accountability for handouts, most of those seeking a donation go elsewhere. 10,000 dollars more, on average, across 12million employees, bro. That adds up.  You consume and benefit from products made by corporations, and call them rent seekers.  I consume and benefit from public goods and services made by the government and call them rent seekers.  Whats the diff? What makes one person greedy for offering a product/service that many people want, and another person not at all greedy for straight up jacking money off my pay check before it ever reaches my hands? I have heard that it is better for your credit score to pay them down over time. Will it make much of a difference? I have never heard that, however, the financial institutions (who are charging you an amount of interest which was at one time in the not so distant past classified and punishable in state criminal codes) really enjoy you thinking that way. You are clearly capable of doing the math yourself. While I don't know the exact numbers, I am totally confident that you will find in about 5 or 10 minutes (if that long) that eliminating debt of any kind in your life will pay an immediate return that beats the great majority of other investments in terms of risk/reward. After the immediate financial return, there is a quieter, subtler, and even greater long term benefit. Basic principle: Highest Rates First Perhaps this decision could be considered slightly less important than deciding not to smoke during your youth; but I would put it as a close second. You are already in a position where you can see the damage that your prior decisions (about financial debt) have produced. Run the clock back to the time in your life when you were debt free. Now, pay off that debt with the big check, and start from zero. Now, turn on your psychic powers and predict the same amount of time, in the future, with the same amount of money (don't even try to adjust for inflation; just use flat dollars) WITHOUT losing the money which you have given to the financial institutions during this previous part of your life. Do you now see why the financial institutions want you to think about slowly paying them off instead of waking up tomorrow without owing them anything ? The companies which define the major indexes do not derive profit directly from the indexes. They are typically brokerages, which use the indexes as a tool for discussing investment options with their clients and as a publicity tool to remind the public that they are long-standing, respected firms whom we might want to consider working with. Can't mention the Dow without being reminded of Dow Jones, for example. Likewise the Standard & Poor's 500 reminds us that S&P is still going strong. There may also be some slight market manipulation opportunities in choosing which specific stocks are included in each index, but since investors rarely follow an index exactly as originally defined I'm not convinced that's significant. And the mix included in each index changes relatively rarely and has to be justified by what the index claims to be representing. So how would you regulate the financial sector to keep one ridiculous horde or powerhouse of cash from ruling it, and keep money flowing through the whole system rather than stagnating or spiraling to a small sector?  These questions also bring to mind rivers versus blood vessels.  In rivers, you get eddies and pools.  In the circulatory system, eddies and pools lead to health issues, much like hording and enclosed loops create stagnation or poor financial health.  Just an observation. Bank have their own Capital, Deposits from Depositors and lend money to Borrowers.   In a liquidity problem, it is typically that either the Borrowers are taking time to repay [they are not yet defaulters] or there is more pressure on withdrawals from Depositors or there is a short term of mismatch between deposits and loans ... in all these valid scenarios FED does lend out the banks to met these short terms obligations.   Banks fail when the losses are actually booked in comparison to the overall Capital or loss would materialize ... for example the Mortgage crisis in US meant that quite a few Banks the actual loss had materialized or would have any ways materialized. In such situations the short term leading does not help and they would burn it out anyways as the borrowers are not paying back any time soon ... "This is a good question and my answer below, being the first rationale that crossed my mind, is far from fleshed-out. It's just a reply based on many books on the historical cycles of markets and it's something I've discussed at work (I work in finance).   Historically we can observe that periods of financial ""booms"" entailing high valuations of public equities tend to lead to lower returns. It's a fairly simplistic notion, but if you're paying more now for something - when it's potentially close to a high water mark - then you're returns in the short term are likely to be somewhat stunted. Returns from the underlying companies have a hard time keeping up with high valuations such that investors aren't likely to see a bountiful return in the short run."