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Are Banks Borrowing from the Fed at Low Interest and Making Money Buying U.S. Treasuries?
Paul Solman: They have been doing just that, though of late it’s more that, thanks to the Fed, they’re borrowing from the capital markets — short-term — and lending longer-term to the U.S. Treasury. We reported this awhile agoourselves.
What’s happening is this: The Fed is keeping short-term interest rates low and implicitly insuring that TBTF (too big to fail) banks will never F. (After Tweeting irregularly for a year or so, I’m tempted to change the shorthand to 2B2F.).
As a result of the Fed’s negligible short-term rates and implicit insurance, the B banks can borrow in the global capital markets at near-zero cost, short term. They can then take that money and buy Treasuries – i.e., lend the money to the U.S. government.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are LONG-term.
But......but .....but..........but what if interest rates rise.......and the Too big to Fail fail again..........but .....but ........but what if the United States can't pay the interest on the loans.........but ........but .........but.......
They get money out the back door and make money at the front door..........
All the while...........the politicians do this.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are Long-term.
Exactly. That's why Lehman went kaput.
Anyone who borrows overnight to buy long-term bonds or mortgages is going to have
a bad day when his overnight loan can't be rolled over.
Right on schedule...........we've been there before..............please proceed..............
The American people would like to get all their debts to 0% or 0.25% interest rates please..........we promise to pay it back...........
Really.............it would be appreciated................
Are Banks Borrowing from the Fed at Low Interest and Making Money Buying U.S. Treasuries?
Paul Solman: They have been doing just that, though of late it’s more that, thanks to the Fed, they’re borrowing from the capital markets — short-term — and lending longer-term to the U.S. Treasury. We reported this awhile agoourselves.
What’s happening is this: The Fed is keeping short-term interest rates low and implicitly insuring that TBTF (too big to fail) banks will never F. (After Tweeting irregularly for a year or so, I’m tempted to change the shorthand to 2B2F.).
As a result of the Fed’s negligible short-term rates and implicit insurance, the B banks can borrow in the global capital markets at near-zero cost, short term. They can then take that money and buy Treasuries – i.e., lend the money to the U.S. government.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are LONG-term.
But......but .....but..........but what if interest rates rise.......and the Too big to Fail fail again..........but .....but ........but what if the United States can't pay the interest on the loans.........but ........but .........but.......
They get money out the back door and make money at the front door..........
All the while...........the politicians do this.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are Long-term.
Exactly. That's why Lehman went kaput.
Anyone who borrows overnight to buy long-term bonds or mortgages is going to have
a bad day when his overnight loan can't be rolled over.
Right on schedule...........we've been there before..............please proceed..............
Waah....guaranteed profits.....But remember, the banks are taking a risk, even lending to the Treasury.
DERP!
Are Banks Borrowing from the Fed at Low Interest and Making Money Buying U.S. Treasuries?
Paul Solman: They have been doing just that, though of late it’s more that, thanks to the Fed, they’re borrowing from the capital markets — short-term — and lending longer-term to the U.S. Treasury. We reported this awhile agoourselves.
What’s happening is this: The Fed is keeping short-term interest rates low and implicitly insuring that TBTF (too big to fail) banks will never F. (After Tweeting irregularly for a year or so, I’m tempted to change the shorthand to 2B2F.).
As a result of the Fed’s negligible short-term rates and implicit insurance, the B banks can borrow in the global capital markets at near-zero cost, short term. They can then take that money and buy Treasuries – i.e., lend the money to the U.S. government.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are LONG-term.
But......but .....but..........but what if interest rates rise.......and the Too big to Fail fail again..........but .....but ........but what if the United States can't pay the interest on the loans.........but ........but .........but.......
They get money out the back door and make money at the front door..........
All the while...........the politicians do this.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are Long-term.
Exactly. That's why Lehman went kaput.
Anyone who borrows overnight to buy long-term bonds or mortgages is going to have
a bad day when his overnight loan can't be rolled over.
Right on schedule...........we've been there before..............please proceed..............
Waah....guaranteed profits.....But remember, the banks are taking a risk, even lending to the Treasury.
DERP!
derp.......
They gambled their asses off in the markets.........traded crap........and got burned.......but they were too big to fail.............Those they deemed worthy got to continue...............as Americans took it up the ass......losing their jobs and homes.....
Their Too Big to Fail asses should have had their assets seized, tarred and feathered, and hung for Treason.......We differ here Todd......They knew exactly what the hell they were doing...........Just as they knew what they were doing when Republicans pushed for and Clinton signed the law that allowed them to Self Regulate.............Ending Glass Steagal.........
Let's trade shit thousands and thousands of times and drive the prices to the moon for a quick gambling spree and see where it goes..........
Are Banks Borrowing from the Fed at Low Interest and Making Money Buying U.S. Treasuries?
Paul Solman: They have been doing just that, though of late it’s more that, thanks to the Fed, they’re borrowing from the capital markets — short-term — and lending longer-term to the U.S. Treasury. We reported this awhile agoourselves.
What’s happening is this: The Fed is keeping short-term interest rates low and implicitly insuring that TBTF (too big to fail) banks will never F. (After Tweeting irregularly for a year or so, I’m tempted to change the shorthand to 2B2F.).
As a result of the Fed’s negligible short-term rates and implicit insurance, the B banks can borrow in the global capital markets at near-zero cost, short term. They can then take that money and buy Treasuries – i.e., lend the money to the U.S. government.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are LONG-term.
But......but .....but..........but what if interest rates rise.......and the Too big to Fail fail again..........but .....but ........but what if the United States can't pay the interest on the loans.........but ........but .........but.......
They get money out the back door and make money at the front door..........
All the while...........the politicians do this.
But remember, the banks are taking a risk, even lending to the Treasury. It’s the risk banks always take when they borrow short and lend long. If short-term interest rates suddenly spurt, so does their cost of money, money which they must constantly raise, since it’s short-term. Meanwhile, the banks are stuck with their long-term loans, precisely because they are Long-term.
Exactly. That's why Lehman went kaput.
Anyone who borrows overnight to buy long-term bonds or mortgages is going to have
a bad day when his overnight loan can't be rolled over.
Right on schedule...........we've been there before..............please proceed..............
Waah....guaranteed profits.....But remember, the banks are taking a risk, even lending to the Treasury.
DERP!
derp.......
They gambled their asses off in the markets.........traded crap........and got burned.......but they were too big to fail.............Those they deemed worthy got to continue...............as Americans took it up the ass......losing their jobs and homes.....
Their Too Big to Fail asses should have had their assets seized, tarred and feathered, and hung for Treason.......We differ here Todd......They knew exactly what the hell they were doing...........Just as they knew what they were doing when Republicans pushed for and Clinton signed the law that allowed them to Self Regulate.............Ending Glass Steagal.........
Let's trade shit thousands and thousands of times and drive the prices to the moon for a quick gambling spree and see where it goes..........
They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
they knew what they were doing when Republicans pushed for and Clinton signed the law that allowed them to Self Regulate.............Ending Glass Steagal...……
Glass-Stegall didn't prevent banks from writing crappy mortgages.
Wouldn't have prevented a housing bubble.
Poor victims.............they lost Trillions..........went to the back door and got trillions.........They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
Poor victims.............they lost Trillions..........went to the back door and got trillions.........They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
As Americans lost their jobs and homes........
Cry me a river..........guess they couldn't buy the new boat and couldn't go on a skiing trip to Switzerland...........
You got a tissue............a whole tear is forming in my eyes.........
And then it took them 8 years to fuck the country
And here we go again...........Who the fuck traded that shit back and forth to insane levels...............Wasn't me Moron.Poor victims.............they lost Trillions..........went to the back door and got trillions.........They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
As Americans lost their jobs and homes........
Cry me a river..........guess they couldn't buy the new boat and couldn't go on a skiing trip to Switzerland...........
You got a tissue............a whole tear is forming in my eyes.........
Poor victims.............they lost Trillions...….
They lost? They didn't have a guaranteed profit?
But I heard from some idiot that they could borrow overnight and lend to the Treasury. Instant profit!
I guess that guy was just a whiney moron, eh?
That they traded back and forth with FDIC backed money..........History repeating itself.........
And then it took them 8 years to fuck the country
Weird. They lost trillions on "traditional, FDIC protected functions like issuing mortgages...…"
And here we go again...........Who the fuck traded that shit back and forth to insane levels...............Wasn't me Moron.Poor victims.............they lost Trillions..........went to the back door and got trillions.........They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
As Americans lost their jobs and homes........
Cry me a river..........guess they couldn't buy the new boat and couldn't go on a skiing trip to Switzerland...........
You got a tissue............a whole tear is forming in my eyes.........
Poor victims.............they lost Trillions...….
They lost? They didn't have a guaranteed profit?
But I heard from some idiot that they could borrow overnight and lend to the Treasury. Instant profit!
I guess that guy was just a whiney moron, eh?
They knew what the fuck they were doing........and they couldn't have speculated that money for investment with the Glass act still there.
Moron.........Moron.......Who the FUCK CRASHED THE DAMNED SYSTEM.....
They did...........and again........here we go again as you defend the gambling casino's............
My last comment is where this ends............Now flip me off like a good little market stooge defending their shit and get it over with.And here we go again...........Who the fuck traded that shit back and forth to insane levels...............Wasn't me Moron.Poor victims.............they lost Trillions..........went to the back door and got trillions.........They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
As Americans lost their jobs and homes........
Cry me a river..........guess they couldn't buy the new boat and couldn't go on a skiing trip to Switzerland...........
You got a tissue............a whole tear is forming in my eyes.........
Poor victims.............they lost Trillions...….
They lost? They didn't have a guaranteed profit?
But I heard from some idiot that they could borrow overnight and lend to the Treasury. Instant profit!
I guess that guy was just a whiney moron, eh?
They knew what the fuck they were doing........and they couldn't have speculated that money for investment with the Glass act still there.
Moron.........Moron.......Who the FUCK CRASHED THE DAMNED SYSTEM.....
They did...........and again........here we go again as you defend the gambling casino's............
Who the fuck traded that shit back and forth to insane levels.
You're whining because banks traded crap with banks? LOL!
They knew what the fuck they were doing........and they couldn't have speculated that money for investment with the Glass act still there.
Banks could write, buy and sell crappy mortgages before, during and after Glass-Steagall.
Banks who only held plain vanilla mortgages that they wrote themselves, far from Wall Street, also
lost money when the bubble burst.
If you had an independent thought in your head, you might discover that fact.
My last comment is where this ends............Now flip me off like a good little market stooge defending their shit and get it over with.And here we go again...........Who the fuck traded that shit back and forth to insane levels...............Wasn't me Moron.Poor victims.............they lost Trillions..........went to the back door and got trillions.........They gambled their asses off in the markets.........traded crap........and got burned.....
Lost trillions.
As Americans lost their jobs and homes........
Cry me a river..........guess they couldn't buy the new boat and couldn't go on a skiing trip to Switzerland...........
You got a tissue............a whole tear is forming in my eyes.........
Poor victims.............they lost Trillions...….
They lost? They didn't have a guaranteed profit?
But I heard from some idiot that they could borrow overnight and lend to the Treasury. Instant profit!
I guess that guy was just a whiney moron, eh?
They knew what the fuck they were doing........and they couldn't have speculated that money for investment with the Glass act still there.
Moron.........Moron.......Who the FUCK CRASHED THE DAMNED SYSTEM.....
They did...........and again........here we go again as you defend the gambling casino's............
Who the fuck traded that shit back and forth to insane levels.
You're whining because banks traded crap with banks? LOL!
They knew what the fuck they were doing........and they couldn't have speculated that money for investment with the Glass act still there.
Banks could write, buy and sell crappy mortgages before, during and after Glass-Steagall.
Banks who only held plain vanilla mortgages that they wrote themselves, far from Wall Street, also
lost money when the bubble burst.
If you had an independent thought in your head, you might discover that fact.
As long as our military remains very strong.China ?
methinks tariffs will keep the chinese in china better than our military would
Not sure who you mean by "they", but there's no doubt that the booming economy we're enjoying now, is largely due to the Trump policies, and that credit is justifiable.they're riding a wave they did not create & taking credit for it
while YOU were off lamenting Stormy, they introduced a 2000 page bill to increase the deficit substaintially (not just a little to get by paying the interest)
they rammed it through Congress in less than 36 hrs, could YOU read 2000 pages in that time? It was literally a Pelosi 'pass it to read it; redux
the gist is deferring the cost(s) of the prosperity YOU are parroting to future generations
Further, claiming Congress fiscally responsible in any way shape or form , is laughable for those of us that can do SIMPLE math
What evidence has you putting Trump/Pence in this category ? I've never heard them advocate cutting Social Security or Medicare.
I think people will what?It’s funny you think people will.I did, I have a 401K, I control the amount of investment I get. Tell me, do pensions give individuals the right to say how their money was invested? hmmmmmmmPensions are gone, you think people are going to save enough? Hahow?We are going to have a lot of future problems with retirees.fking leftists fked the pension system as well. pyramid schemes just don't work.
