cnn money reporter bidding for moron of the year

[cheka.]

or liar?

http://money.cnn.com/2016/05/19/investing/banks-federal-reserve-rate-hikes/

That popping sound you hear from Wall Street isn't the latest bubble bursting. It's champagne corks. That's because the Federal Reserve may be coming to the rescue of big banks.

The Fed strongly indicated in the minutes of its last meeting that an interest rate hike is possible next month. That surprised many investors, who had been expecting that the Fed would wait until after the presidential election to make another move.

Interest rates have been abnormally low (near zero, in fact) since the financial crisis in 2008. The Fed finally hiked rates by a tiny bit last December but has held steady since.

Low rates may be good for consumers using credit cards and looking to buy a home. But they are the enemy of giant banks since it makes it harder for them to profit on the loans they make.

So any indication that rates may finally be back on the path to something remotely resembling normal is good news for companies like JPMorgan Chase (JPM), Citigroup (C) and Bank of America (BAC).

Unsurprisingly, shares of these three -- as well as Goldman Sachs (GS), Wells Fargo (WFC) and Morgan Stanley (MS) -- all rallied sharply after the Fed minutes were released Wednesday afternoon.

But these stocks are all still down year-to-date while the broader market remains up slightly.

[madfranks]

Low rates may be good for consumers using credit cards and looking to buy a home. But they are the enemy of giant banks since it makes it harder for them to profit on the loans they make.

Yeah, because borrowing as much fiat money as you want from the central bank at 0.25% and then loaning it to people for their homes, cars, etc at 5-7% is sooooo hard to make money on!

[cheka.]

Yeah, because borrowing as much fiat money as you want from the central bank at 0.25% and then loaning it to people for their homes, cars, etc at 5-7% is sooooo hard to make money on!

and.....as if the zero rate isn't explicitly there FOR the nyc banks......8 years of 0.x rate....wow

[Carl]

Yeah, because borrowing as much fiat money as you want from the central bank at 0.25% and then loaning it to people for their homes, cars, etc at 5-7% is sooooo hard to make money on!
Banks don't borrow fiat money from the Fed, they don't borrow from the Fed at all, unless they're in trouble and can't borrow anywhere else.

Also, banks do not loan fiat money, period.

[Twisted Titan]

They create credit at the click of a mouse

And binds the unsuspecting chap to a lifetime of servitude.

[cheka.]

Banks don't borrow fiat money from the Fed, they don't borrow from the Fed at all, unless they're in trouble and can't borrow anywhere else.

Also, banks do not loan fiat money, period.

banks borrowing from frbny

http://www.zerohedge.com/sites/default/files/images/Repo%204.jpg

http://www.itulip.com/images2/BORROW2007-2010.gif

[Glass]

The banks don't lend money to the people. The people lend their money to the bank (give in reality) who then lend it back to them.

The banks borrow money from the fed to cover the overnight rate. The overnight rate is the ratio of funds the bank is supposed to have in reserve as a percentage of outstanding loans they have on their books.

It's called the "REPO". The banks are required to keep X % of dollars in reserve each day. That X % dollars is a % of loans on their books. As they don't have that money, they borrow it each day. Because they borrow it each day it becomes a revolving line of credit much like a credit card or the account they call the "national debt",

[midnight rambler]

They create credit at the click of a mouse

And binds the unsuspecting chap to a lifetime of servitude.

The dung beetle will soon be posting to tell you how wrong you both are.

[collector]

Stick it to the banks - borrow as much as you can while the interest rates are so low - good advice from your friends at CNN who report the truth all day every day