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How You Are Making Bankers Billions

Explaining the bailouts has just been made easier.  In a brilliant post, Henry Blodget explains how you the American taxpayer are making Wall Street billions for doing nothing:   Raise $1 billion of equity. Borrow $9 billion from the Fed at an annual cost of 0.25%.  Buy $10 billion of 30-year Treasuries paying 4.45% My goodness, he just made everything so clear.  And, yes, that's all true.  When people rant about giving Goldman Sachs access to the discount window, here's what we mean: The Federal Reserve loans money to banks like Goldman Sachs.  The interest rate they loan the money at is called the discount window.  The United States Department of the Treasury sells U.S. Treasuries.  Purchasing a Treasury is really just lending the government money...continue to full post

Full post as published by Crime & Federalism on December 10, 2009 (boomark / email).