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Who do the banks owe?

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Home » Discuss » Archives » General Discussion: Presidential (Through Nov 2009) Donate to DU
 
Bread and Circus Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 02:42 PM
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Who do the banks owe?
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JuniperLea Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 02:43 PM
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1. China... Saudi Arabia...
Edited on Tue Sep-23-08 02:43 PM by Juniperx
You know... our new overlords...

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scheming daemons Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 02:44 PM
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2. They don't.... they have property (mortgages) that they are unable to sell...and the value
of that property is dropping rapidly.


They bought it for a lot.... and can't sell it for as much as they paid for it.


Depreciating assets.
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Big Blue Marble Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 02:50 PM
Response to Reply #2
5. Mortgages are supposed to be on the asset side of their balance sheets.
They owe those who provided the funds that were paid out when these mortgages were created,
Depositors and Investors.
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Popol Vuh Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 02:46 PM
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3. Shut the hell up peasant
:sarcasm:
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Big Blue Marble Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 02:47 PM
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4. Banks owe their depositors.
That would be us.
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MSU_Spartans Donating Member (93 posts) Send PM | Profile | Ignore Tue Sep-23-08 02:53 PM
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6. Investors, but they don't technically owe them anything
as investments are not guaranteed by the banks.
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Big Blue Marble Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 03:02 PM
Response to Reply #6
7. Banks owe their depositors.
Edited on Tue Sep-23-08 03:03 PM by Big Blue Marble
as I said above. That would you, me, small businesses, large corporations, foreign nationals, and anyone
who parks their money in a bank for safety and the small returns they receive. This is the money that
the banks use as a lever to lend money to you, me, small businesses, large corporations, foreign nationals, and anyone
who they decide is qualified for credit. This is the foundational process for the creation of money, wealth and the
grease of our economy.

They also owe bond holders who have lent the bank funds to operate.

They only owe investors the profit on this process. Equity shares are not a liability of a corporation.
They are bought and sold on the security exchanges.
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MSU_Spartans Donating Member (93 posts) Send PM | Profile | Ignore Tue Sep-23-08 03:05 PM
Response to Reply #7
8. maybe I've got this wrong
Maybe I understand this wrong, but I though that many of the banks that we deposit to don't own most of the bad paper. They took the bad paper, and sold it to someone else, who got investors to buy it for them. So the banks we deposit to, while they're the crooks, don't hold much of the debt. Please correct as I'm sure I only have part of the story.
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Big Blue Marble Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 03:29 PM
Response to Reply #8
9. Right now we, as in you and me. cannot be sure
Edited on Tue Sep-23-08 03:30 PM by Big Blue Marble
which of our banks are holding the bad paper and other bad investments. But we do know that the whole banking
system is on the line. We are hearing that many banks are at risk. Because of banking deregulation, banks are in
many more investments than in the past when they were just suppose to lend money.

Banks are signaling to the Fed that right now they do not trust each other enough to lend money back and
forth. This means that even the banks think other banks have bad paper! What a mess.



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