If this were true the housing market bubble wouldn't have occured. Instead, the bank off loaded the risk onto the taxpayer. Short term fees and gains but little long term risk.
We need to prevent money laundering. Banks should retain their own risks.
Several readers have ask me to comment on a King World interview of Michael Pento.
Before I offer my comments on Pento's thoughts, let me say upfront that Eric King is a world-class interviewer. King lets his interviewees have their say, no matter what it is.
It is up to listeners to decide whether the message makes any sense or not. King merely wants the position to be well stated.
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Hello Mish:
Have you listened to Mike Pento's scenario where the FED will cease to pay interest on reserves held at the FED, as a result, forcing...
The banks made lots and lots of fee income, thereby increasing profits. Those banks that kept many on them on their own, suffered the worse. That is why J P Morgan and GS weren't hurt much. they were the kings of selling the garbage.
What most people forget, is that if the market had continued to climb, most of the loans would have been considered good. It was only the severity of the fall, which made the fall even worse as it fed on itself.