Comments on: Why banks find it so easy to borrow http://blogs.reuters.com/felix-salmon/2010/08/17/why-banks-find-it-so-easy-to-borrow/ A slice of lime in the soda Wed, 22 May 2013 15:07:22 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: TFF http://blogs.reuters.com/felix-salmon/2010/08/17/why-banks-find-it-so-easy-to-borrow/comment-page-1/#comment-17420 TFF Wed, 18 Aug 2010 18:02:01 +0000 http://blogs.reuters.com/felix-salmon/?p=4991#comment-17420 Everybody is having an easy time borrowing right now because (looking at the past ten years) people have decided that stocks are for gambling fools while bonds are the only investment that makes any sense. Of course the joke is on them, as this bubble too will burst. There is no investment that won't suffer under SOME set of conditions, and that suffering is most likely to follow an extended bull run. Everybody is having an easy time borrowing right now because (looking at the past ten years) people have decided that stocks are for gambling fools while bonds are the only investment that makes any sense.

Of course the joke is on them, as this bubble too will burst. There is no investment that won’t suffer under SOME set of conditions, and that suffering is most likely to follow an extended bull run.

]]> By: mhmani http://blogs.reuters.com/felix-salmon/2010/08/17/why-banks-find-it-so-easy-to-borrow/comment-page-1/#comment-17412 mhmani Wed, 18 Aug 2010 14:38:58 +0000 http://blogs.reuters.com/felix-salmon/?p=4991#comment-17412 You can't take anything that Treasury or Geithner has to say seriously. Why? This one simple metric. That Bank stocks are trading at or below book value. Every one of the TBTF Financial Instituitions are insolvent on a marked to market basis. FASB rollbacks completely changed the game and allowed the banks to value garbage at par or even better yet, sell high coupon MBS to the Fed above par. This was the largest giveaway and at the end of the day the biggest trajedy. Bonds are being sold not on the basis of sound credit analysis but to the fact that bailouts have become part of the fabric of Western style capitalism. The equity in most of these entities are worthless. You can’t take anything that Treasury or Geithner has to say seriously. Why? This one simple metric. That Bank stocks are trading at or below book value. Every one of the TBTF Financial Instituitions are insolvent on a marked to market basis. FASB rollbacks completely changed the game and allowed the banks to value garbage at par or even better yet, sell high coupon MBS to the Fed above par. This was the largest giveaway and at the end of the day the biggest trajedy. Bonds are being sold not on the basis of sound credit analysis but to the fact that bailouts have become part of the fabric of Western style capitalism. The equity in most of these entities are worthless.

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