Skip to main content

View Diary: Explosive Bloomberg Editorial: Bank Profits are "almost entirely" Taxpayer Money (125 comments)

Comment Preferences

  •  Quoting again from bloomberg: (4+ / 0-)
    Recommended by:
    Bob Duck, tardis10, semiot, cynndara
    Let’s start with a bit of background. Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail.
    We're not just talking about the Fed, banks also borrow from each other, and because the biggest monsters are assumed to be too big to fail, other banks lend them money at low, low rates.

    Money those banks themselves borrowed from the Fed.

    Do you think I need to post a clarification on that point in the diary?

    An Fhirinn an aghaidh an t'Saoghail. (The truth against the world.) Is treasa tuath na tighearna. (The common people are mightier than the lords.)

    by OllieGarkey on Thu Feb 21, 2013 at 08:47:01 PM PST

    [ Parent ]

    •  ok banks borrow from each other (2+ / 0-)
      Recommended by:
      shrike, Deep Texan

      so what? this is news? how does that equate to a subsidy?  as someone above said - the bondholders are taking a lower return. HOw are taxpayers involved?

      "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

      by eXtina on Thu Feb 21, 2013 at 09:20:10 PM PST

      [ Parent ]

    •  .8 percentage points of what? (1+ / 0-)
      Recommended by:
      Deep Texan
      Small as it might sound, 0.8 percentage point makes a big difference.
      what does this refer to? it's not to be found in the diary. the banks are already borrowing from the fed - at less than .8 so what is this talking about?

      "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

      by eXtina on Thu Feb 21, 2013 at 09:21:41 PM PST

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site