Comments on: Trusting Banks as Far as You Can Throw Them http://dailyreckoning.com/trusting-banks-as-far-as-you-can-throw-them/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Sat, 11 Feb 2012 03:39:16 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Robert in Houston http://dailyreckoning.com/trusting-banks-as-far-as-you-can-throw-them/#comment-12339 Robert in Houston Fri, 19 Jun 2009 16:00:29 +0000 http://dailyreckoning.com/?p=16502#comment-12339 Jeeze Louise, read all the numbers -- yes, TFC is down 40 B$ 'cuz the banks withdrew some of their [non]excess reserve deposits the Fed conveniently has started paying interest upon. The current marginal fractional reserve multiplier ain't 10 or 187, it _is_ zero or negative -- the banks won't and can't lend. Now things might get interesting if one of the less-unhealthy banks (there are some) decided to start lending. But even if the Fed didn't/couldn't yank on their toxic repo strings, the rest of the banks would soak it up. Remember, the multiplier only works when the ball bounces and no one socks it away. C, JPMC & BAC sure would. Jeeze Louise, read all the numbers — yes, TFC is down 40 B$ ‘cuz the banks withdrew some of their [non]excess reserve deposits the Fed conveniently has started paying interest upon.

The current marginal fractional reserve multiplier ain’t 10 or 187, it _is_ zero or negative — the banks won’t and can’t lend.

Now things might get interesting if one of the less-unhealthy banks (there are some) decided to start lending. But even if the Fed didn’t/couldn’t yank on their toxic repo strings, the rest of the banks would soak it up. Remember, the multiplier only works when the ball bounces and no one socks it away. C, JPMC & BAC sure would.

]]> By: jonathan rose http://dailyreckoning.com/trusting-banks-as-far-as-you-can-throw-them/#comment-12118 jonathan rose Wed, 17 Jun 2009 21:32:02 +0000 http://dailyreckoning.com/?p=16502#comment-12118 Don't trust the banks - if you have any more than FDIC maximum in cash you could loose it. Safe secure income producing bonds are the best bet right now as cashflow will be king. Diversify out of the dollar for added protection. Don’t trust the banks – if you have any more than FDIC maximum in cash you could loose it. Safe secure income producing bonds are the best bet right now as cashflow will be king. Diversify out of the dollar for added protection.

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