Tag: wall street banks

  These are strange days. There was a time when there was a clear divide between fiction and reality, but those days are passing. For instance, this amusing article from Andy Borowitz.

  (The Borowitz Report) – Eleven indicted Somali pirates dropped a bombshell in a U.S. court today, revealing that their entire piracy operation is a subsidiary of banking giant Goldman Sachs.

  There was an audible gasp in the courtroom when the leader of the pirates announced, “We are doing God’s work.  We work for Lloyd Blankfein.”

 The article was meant to be snarky and not taken seriously, but those are the kind of stories you have to keep the closest eye on. They tend to have a way of transforming from punchline to headline.

“I have always noticed that people will never laugh at anything that is not based on truth.”

 – Will Rogers

  Once again, the Federal Reserve is going to come to the rescue of Wall Street. Once again, it will be in the name of helping out “us”.

 The idea behind giving the banks cheap money was that the banks would lend it to consumers and businesses.  Unfortunately, that hasn’t happened: Since the start of the crisis, bank lending has fallen off a cliff.  The banks are, however, lending to the Federal government, which needs to fund record deficits by borrowing more than $1 trillion a year.  The combination of the Fed’s desire to stimulate lending via cheap money and the government’s desire to stimulate the economy by running a huge deficit has made it a great time to be a bank: Banks can borrow from the government at artificially cheap rates and then lend the money back to the Federal government at higher rates, pocketing the difference.

And now it’s going to get even better to be a bank.