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Friday, October 15, 2010

Finance Lie of the Day- 10/15/10


Mortgage Mess May Cost Big Banks Billions- "After scratching their heads for weeks over how much the foreclosure mess will hurt banks’ bottom lines, investors got out their calculators Thursday to tally the potential costs"- New York Times (10/15)

The reason this is a Lie is because Big Banks have received hundreds upon hundreds of billions of dollars in FREE money from the Federal Reserve which they either use to invest in Wall St. or to buy US Treasuries with at 3% interest.

~ Think of it this way- You give $ to a friend who's in desperate straits who then takes the money and lends it to you at a profit.

So the billions that the banks will eventually lose will not be their money- it was our money- our tax dollars.  And in reality, the Banks still continue to receive billions from the Fed presently and into the future, which is what Quantitative Easing II is about.

~ Think of it this way-  If you get a speeding ticket, pay the fine, then the full amount is given back to you, are you deterred from speeding again?

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