Merideth Whitney mentioned a fact which I had pointed out weeks ago that the FED produces a risk free trade with their announcement that they will buy agency paper. The top ten banks as she mentioned have increased their holding in those papers by 30 % - and they rose by 3-4 points overall. Youır borrow for zero at the FED leverage that up and make a risk free profit of some magnitude.
Do not dare to pay yourself any bonus on that trades' top 10 banks' as they are completely taxpayer sponsored profits. After that they want to pay back TARP to fall back into their old greedy habits give us all a brake since even a monkey could have done that trade and he would be happy about a banana. So humble down and shut up and remember what happened in 1860's the mob actually lynched wallstreet bankers back then.
The other part of the profits came from marking up assets as they can due to new accounting rules and finally they all miss use the loophole to state their sinking outstanding bonds value as profits.
She also speaks about the stress test its worth watching
http://www.bloomberg.com/avp/avp.htm?N=av&T=Whitney%20Expects%20Banks%20to%20Return%20to%20%60Negative%20Earnings%E2%80%99&clipSRC=mms://media2.bloomberg.com/cache/v04.7emHef8A.asf
Tuesday, April 21, 2009
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