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I'm pretty sure I could make a profit if I were given $5 billion at 0.0078 interest.


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2010 Dec 1, 1:06pm   1,604 views  3 comments

by gameisrigged   ➕follow (0)   💰tip   ignore  

Money For Nothing: Wall Street Borrowed From Fed At 0.0078 Percent

http://www.huffingtonpost.com/2010/12/01/wall-street-borrowed-from_n_790709.html?source=patrick.net#entry_12345

"Nine firms -- five of them foreign -- were able to borrow between $5.2 billion and $6.2 billion in U.S. government securities, which effectively act like cash on Wall Street, for four-week intervals while paying one-time fees that amounted to the minuscule rate of 0.0078 percent."

The transfer of wealth continues...

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2   Â¥   2010 Dec 1, 2:48pm  

Thing is, you've got to look at this chart showing the rise in mortgage debt from 2000.

You can see that total mortgage debt was $7T in 2003 and rose to $10.5T 4 years later.

That's a net of $3.5T of questionable loans made over the 4 years. Home prices:

http://research.stlouisfed.org/fred2/series/SPCS20RNSA

are back to 2003 levels so this $3.5T is totally bubble debt with from 20% to 80% of losses dialed in.

I don't know what the deal is going to be, but going with 33% that's over a trillion dollars of pain to be distributed.

So what we have here is a backdoor bailout. The general idea is to avoid making the same mistakes of the 1930s, though by doing so we very well may be making the mistakes the Japanese made in the 90s.

3   gameisrigged   2010 Dec 2, 3:45pm  

Yes, I was already aware that there was a lot of mortgage debt. It would be hard not to know that if you live on planet earth. But I don't think it's fair to take money from the middle class and redistribute it to the wealthy under the guise of "bailing out" the mortgage industry. If you're in the top 1%, you probably would think it's a great idea. Me? Not so much...

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