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Perils Of Financial Crisis Loom

Wednesday, May 29, 2013 - 7:04 AM
From Forbes
And while banks have basked in the comfort of Bernanke’s unprecedented flood of liquidity, low rates also pose great dangers for Wall Street.  Beyond the oft-cited reduction in net interest margins (when the Fed flattens out the yield curve, it becomes more difficult for banks to make a difference from borrowing short and lending long), low rates push financial institutions to look for alternative ways to make returns.

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6
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Wednesday, May 29, 2013 - 7:41 AM
"In their report, Moody’s acknowledged that banks are healthier but face the same type of risk that led them to the abyss in the first place."

Insanity: doing the same thing over and over again and expecting different results.
- Albert Einstein

  
5
ShorebreakShorebreak2,695 posts since
Apr 6, 2010
Rep Points: 14,611
2. Wednesday, May 29, 2013 - 9:47 AM
I like Einstein"s definition of Insanity but personally I think True Insanity is: Doing the same thing over and over again actually knowing you can't get different results.   Hmmm.... that sounds like certain people in our Federal government.
1
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,150
3. Wednesday, May 29, 2013 - 5:06 PM
"In their report, Moody’s acknowledged that banks are healthier but face the same type of risk that led them to the abyss in the first place. “The most likely scenario that could result in a reversion to a negative outlook on the U.S. banking system would be related to a protracted slackening of underwriting standards,” they concluded. For now, though, it’s time to keep the Champagne flowing."

I, for one, do not believe it is business as usual even at the present time.  It is a matter of time (sooner than later I am afraid) for this Fed-manufactured economy to go to pieces. 
1
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
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