How the (US) banks are making money from QE...

[johnfm]

http://www.youtube.com/watch?v=cxfMxpB9-Ds&fea...

In summary, being virtually given fee money from the fed and using it to buy treasury bonds.

This cannot possibly be true.

Can it?

[Otispunkmeyer]

I had read this a while ago... using the money lent to them to buy US treasury bonds. Essebtially loaning the dosh back to the government at a higher price! Still its their creative accounting is what shows them to be in rude health. There were a few articles I read in, I think, Rolling Stone magazine online. Not sure how reliable/sensationalist that thing is but the stories about the banks activities seemed properly incredible.

Same thing as Enron, trying to build a massive power plant in India and booking huge profits based on the proposed price at which it would sell the electricity for once completed and generating. Plant was never completed, electricity was never generated much less sold, yet it was all booked down in advance as nice juicy profits and people walked off with a nice bonus.

Mark to market accounting? If thats what it is, I can't possible see how its allowed for certain things. I mean how can you possibly book things down as profits if you've never seen a dime and wont for next few years? Thats like me owning a shop and then marking down profits from all the bread I sold before I even bake it.

[johnfm]

Otispunkmeyer said:

I had read this a while ago... using the money lent to them to buy US treasury bonds. Essebtially loaning the dosh back to the government at a higher price! Still its their creative accounting is what shows them to be in rude health. There were a few articles I read in, I think, Rolling Stone magazine online. Not sure how reliable/sensationalist that thing is but the stories about the banks activities seemed properly incredible.

Same thing as Enron, trying to build a massive power plant in India and booking huge profits based on the proposed price at which it would sell the electricity for once completed and generating. Plant was never completed, electricity was never generated much less sold, yet it was all booked down in advance as nice juicy profits and people walked off with a nice bonus.

Mark to market accounting? If thats what it is, I can't possible see how its allowed for certain things. I mean how can you possibly book things down as profits if you've never seen a dime and wont for next few years? Thats like me owning a shop and then marking down profits from all the bread I sold before I even bake it.

Otis

the mark to market works both ways - they were marking property portfolios to zero, because if there are no buyers it cannot have a mark down value.

One of many structural problems.

[Otispunkmeyer]

johnfm said:

Otispunkmeyer said:

I had read this a while ago... using the money lent to them to buy US treasury bonds. Essebtially loaning the dosh back to the government at a higher price! Still its their creative accounting is what shows them to be in rude health. There were a few articles I read in, I think, Rolling Stone magazine online. Not sure how reliable/sensationalist that thing is but the stories about the banks activities seemed properly incredible.

Same thing as Enron, trying to build a massive power plant in India and booking huge profits based on the proposed price at which it would sell the electricity for once completed and generating. Plant was never completed, electricity was never generated much less sold, yet it was all booked down in advance as nice juicy profits and people walked off with a nice bonus.

Mark to market accounting? If thats what it is, I can't possible see how its allowed for certain things. I mean how can you possibly book things down as profits if you've never seen a dime and wont for next few years? Thats like me owning a shop and then marking down profits from all the bread I sold before I even bake it.

Otis

the mark to market works both ways - they were marking property portfolios to zero, because if there are no buyers it cannot have a mark down value.

One of many structural problems.

I have to be honest and say I dont fully understand many things about the finance world.

Has anyone read articles like this> http://www.rollingstone.com/politics/news/wall-str...

or

http://www.rollingstone.com/politics/news/looting-...


I have and I am not sure what to make of them, they seem to be written in a very irate, angry manner and I just wonder whether thats gotten in the way of the proper facts. I do love the comic sketches that go with each though, great imagery.

[johnfm]

I choose not to read rollingstone magazine - unless reading about music or musicians.

[Jimbeaux]

johnfm said:

I choose not to read rollingstone magazine - unless reading about music or musicians.

Very good decision. The banking news getting the most play here is how European banks are worse off than anyone previously thought but the truth is being shielded. What do you hear?

[johnfm]

Jimbeaux said:

johnfm said:

I choose not to read rollingstone magazine - unless reading about music or musicians.

Very good decision. The banking news getting the most play here is how European banks are worse off than anyone previously thought but the truth is being shielded. What do you hear?

What do I hear?

I hear Greece has banned exports of Tatziki and Taramosolata.

I'm sure you know what that means...

[T84]

johnfm said:

What do I hear?

I hear Greece has banned exports of Tatziki and Taramosolata.

I'm sure you know what that means...

They're trying to stop a moussaka?

[fathomfive]

johnfm said:

What do I hear?

I hear Greece has banned exports of Tatziki and Taramosolata.

I'm sure you know what that means...

The place is desserted?

[Jimbeaux]

johnfm said:

Jimbeaux said:

johnfm said:

I choose not to read rollingstone magazine - unless reading about music or musicians.

Very good decision. The banking news getting the most play here is how European banks are worse off than anyone previously thought but the truth is being shielded. What do you hear?

What do I hear?

I hear Greece has banned exports of Tatziki and Taramosolata.

I'm sure you know what that means...

Although a lesser tier problem than Tatziki banning, you UKers ought to step up and pull Greece out of the grease and stop letting Germany do all of the saving in the big EU. You should be ashamed of yourselves.

[johnfm]

A double dip recession!

[Ozzie Osmond]

T84 said:

They're trying to stop a moussaka?

Naaah. I'm sure Moussa Koussa is in Libya, not Greece.