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You seem to have a very naive view of how the financial system works. It's not like there are a lot of options for small depositors, it's one of the set of too
by yborg 5y ago
You seem to have a very naive view of how the financial system works. It's not like there are a lot of options for small depositors, it's one of the set of too big to fail banks. And they can get all the free money they want from the Fed. If you are someone with millions of dollars of annual deal flow through Chase, yeah, Dimon will go to bat for you, but if you are some retail depositor, as long as they verify it's the government, they'll do whatever they want. (And they don't even really care about verifying anything under normal circumstances, which is why identity thievery is so easy.)
- danielmarkbruce 5y ago> It's not like there are a lot of options for small depositors, it's one of the set of too big to fail banks You might be outside the US? In the US there are literally 1000s of options. And the idea that banks get all the "free money" they want from the Fed... I don't think you should be suggesting anyone is naive with those two statements.
- geysersam 5y agoNo, he is literally correct. The fed interest rate has hovered around 0% for ages. That's free money.
- danielmarkbruce 5y agoThe fed funds rate was 2% just a few years ago, it was 5% in the mid 00's and was rarely below 5% before that for decades. Also, it needs to be paid back. On top of that, they are in a competitive market where mortgage rates are very low, corporate lending rates are very low. So it's not a simple game of "free money in, high interest money out". Anyone who thinks finance is some easy game hasn't played the game.