How the big banks make the big bucks

Whiteboard bank profits

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Please, you don't need to dummy it up that much. Is the average viewer really that clueless??

Paddy is pulling our legs with this....its an Irish joke.Surely The American people are not that gullible?

One of the hot topics today is the federal debt load. It would be interesting to have a show about who really owes this debt and to whom it is owed. Thanks for the great work.

In 2008 congress permitted the FED to pay the banks interest on their reserves,has this affected their desire to make small business loans?

Under Al Capone the Mafia brought in Booze from Nantucket Island, Rum and Whiskey from Ireland. Then they moved to money trading at the Stock Market. Now they are still in money but we the people are still the Suckers. Since 1913.

I think Mr. Hirsch left out one important point; where does Geitner get the money to pay the interest? I believe it is us, the American taxpayer, all the more reason for us to be pissed off about the banks and their oversized bonuses.

Paddy's video is pretty close to the truth. Is it any wonder that the TEA Party is growing by leaps and bounds? The Federal Reserve, the Treasury, the President, and the Congress are ripping us off. It would be gratifying to see every one of them hanging from a tree after the fashion of Old Western movie justice.


You didn't answer the obvious question that your presentation raises: why doesn't the Fed give the money directly to the Treasury and cut out the banks? Why should the banks get interest from the Treasurey (aka the Taxpayers) for no risk lending?
It's this "money for nothing" that has us so irate.

Hi Nick
You're absolutely right that this is a simple video. This trade is just one of many that banks use to deploy money from the discount window. In many cases it will be a hedge against riskier trades that the banks might do with other instruments. Such as 30-year Treasuries, which at 4.5% will net 4% annually to the banks. Of course there is considerable interest rate risk there, so a smart trader will churn the portfolio to offset that risk.

I love the way you end all your wonderful explanations with the common man needing a drink!


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