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robbinhood69 t1_je8io0x wrote

Reply to comment by Simkinn1 in Subprime is back on the menu boys! by megaultraman

Yah it doesnt rly make sense, u cant attract deposits by loaning money out

Altho i agree with OP’s general assessment that most of these banks r basically bankrupt, FED and GSIB’s just duct taped everything together to kick the can down the road but everyones got a gun to each others head and knows where the toxic assets r

To Fair Market Value (FMV) = 0 we go

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megaultraman OP t1_je8qnnn wrote

You attract deposits by offering higher interest rates on savings/deposit accounts. Since banks are able to borrow from the Fed at 5%, if they lend that same money out at 10%+, they can offer rates that are competitive with money markets.

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