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stockholmer

(3,751 posts)
Thu Feb 16, 2012, 08:31 PM Feb 2012

Henry Blodget, "the reason we have zero-percent interest rates is to bailout the banks"



The rating agency moody's has warned it is considering downgrading the investment banking world's biggest players -- this includes Bank of America, Goldman Sachs, JP Morgan, Morgan Stanley...the list goes on and on. I like the way the Wall Street Journal put it: "Moody's is worried about everything in investment banking."

And speaking of worries -- Art Cashin of UBS in his note this morning says traders are worried about a Greek default, but not for the reasons that you may think. What they are really worried about isn't the bond holders, but the guy's holding the insurance: the credit default swap (CDS) market. Wait, we thought everyone was perfectly hedged? So what kind of risk is really lurking in the US banking system then, and what could it do to an economy on zero percent interest rate life support?

Well, our guest Henry Blodget may have an answer to that. He is CEO and founder of Business Insider, and is with us to talk about this, as well as the subject of a recent article of his titled "Dear Walmart, McDonald's, Starbucks: how do you feel about paying your employees so little that most of them are poor?" Henry makes a fair point in this article, but if it's true that CEO's and executives are paying their employees so little, then why are we so worried about taxes and not focused on the deterioration of wages in America? Henry Blodget points out that Henry Ford made a point of paying his workers better than other firms with the added hope that they could eventually be not just the producers, but also the consumers for his own products: his automobiles.

And is the solution to our economic disease a forced redistribution of wealth through taxes, or is there something more fundamentally and structurally flawed at work here that is responsible for the inequities in today's wealth? How important is the banking sector in all of this, and how can a banking sector that is so corrupt and so broken possibly play a constructive part in bridging these tremendous gaps?
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Henry Blodget, "the reason we have zero-percent interest rates is to bailout the banks" (Original Post) stockholmer Feb 2012 OP
and we've had that "zero percent interest rate" for the banks since ... oh, let's just say ... zbdent Feb 2012 #1

zbdent

(35,392 posts)
1. and we've had that "zero percent interest rate" for the banks since ... oh, let's just say ...
Thu Feb 16, 2012, 09:04 PM
Feb 2012

December 2000, when they were beating the drum of a terrible recession ...

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