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bhikkhu

(10,707 posts)
18. Yes, the "expectation of government support" increases lender confidence
Tue Jun 19, 2012, 10:03 PM
Jun 2012

...so the banks can borrow at a lower rate than they would otherwise.

But you must see my point - a given bank might have (as an example) a fixed .005 markup between their borrowing and their lending costs, which would allow them to cover the risk of lending and overhead while still maintaining an operating profit. If the bank borrows at 3.5%, it lends at 4%. If the bank borrows at 4%, it lends at 4.5%, and so on. The rate itself has no effect on income - income is determined by the markup, which is worked out with great certainty and care to provide whatever is needed to keep operations profitable.

Again, the rate doesn't determine income, the markup on that rate does, and that has nothing to do with what Bloomberg is talking about.

K&R'd! snot Jun 2012 #1
Take it back. aquart Jun 2012 #2
But, but, but... THEY PAID BACK THE LOANS!1!1!! Egalitarian Thug Jun 2012 #3
meanwhile...Republicans want food stamps cut by $2 billion a year Ghost of Huey Long Jun 2012 #4
Unfortunately, 22 "Democrats" joined their ideological allies in the Republican Party. bvar22 Jun 2012 #25
That one is overblown Woody Woodpecker Jun 2012 #27
Why? bvar22 Jun 2012 #29
And the bastards and their lackeys are trying this very day to take food watrwefitinfor Jun 2012 #5
Really important article to read. I encourage folks to follow the link and read. salin Jun 2012 #6
Du rec. Nt xchrom Jun 2012 #7
This is dynamite here. Will it make the nightly news? freshwest Jun 2012 #8
k&r... spanone Jun 2012 #9
Study: *taxpayers* give Mega bank JP Morgan Chase a $14 billion annual subsidy. dixiegrrrrl Jun 2012 #10
that works for me abelenkpe Jun 2012 #11
It just gets more disgusting every day. Autumn Jun 2012 #12
An interesting perspective, but its not really a subsidy bhikkhu Jun 2012 #13
Then the government should just loan it to the people without Angry Dragon Jun 2012 #15
That would be one way to do it bhikkhu Jun 2012 #17
Not relevant. Igel Jun 2012 #20
No, Bloomberg got it right. girl gone mad Jun 2012 #16
Yes, the "expectation of government support" increases lender confidence bhikkhu Jun 2012 #18
There's no basis for your assumption that the markup is fixed. Jim Lane Jun 2012 #23
No, they didn't. Igel Jun 2012 #21
Not true at all. girl gone mad Jun 2012 #24
Thank you for the explanation and citation. n/t truedelphi Jun 2012 #30
Corporate welfare Angry Dragon Jun 2012 #14
It's a calculated value of the effect of expected government support on the credit worthiness RB TexLa Jun 2012 #19
Nice explanation and citation regarding the word subsidy and how truedelphi Jun 2012 #31
Indeed NOT a "subsidy" econoclast Jun 2012 #32
Except the funds aren't being granted in by the government. There are no government funds RB TexLa Jun 2012 #33
Plus government pays for food stamps to supplement their janitor's poverty level salaries. Kablooie Jun 2012 #22
Well, how about that. -eom Huey P. Long Jun 2012 #26
Hmmmm Quantess Jun 2012 #28
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