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But he is just a piker in ripping off US taxpayers compared to banks that borrow from the Fed at 0.25% and turn around and buy treasury bonds paying 3%
by asmithmd1 16y ago
But he is just a piker in ripping off US taxpayers compared to banks that borrow from the Fed at 0.25% and turn around and buy treasury bonds paying 3%
- Nick_C 16y agoHow is that a rip-off? In the general case, this is how banks basically work. They borrow short term from depositors and lend long term to mortgagees and businesses. In this specific case, they are exposing themselves to risk from the time value of money, the capital price of the bond. If rates rose 0.5%, they lose 3% on a 7 year bond.