Securitized lending.

[Skink]

sounds like a win for the banks. :shrug:

[taught_me_patience]

1. It's a win for most of us

It allows banks to spread risk. This enables an incredibly low credit spread between 30 year treasury bonds and 30 year mortgages. Almost all homeowners have benefited from these lower interest rates.

[taught_me_patience]

4. Were you talking about securitized mortgages or securities lending?

[Greyhound]

2. It is monetizing the "bank" losses we're on the hook for, which removes the last shreds

of responsibility for the thieves that crashed the economy.

Oh, and it doesn't get one penny of our money back from them.

[Skink]

3. House advantage

from NYT

Here is the deal: Funds lend some of their stocks and bonds to Wall Street, in return for cash that banks like JPMorgan then invest. If the trades do well, the bank takes a cut of the profits. If the trades do poorly, the funds absorb all of the losses.

The strategy is called securities lending, a practice that is thriving even though some investments linked to it were virtually wiped out during the financial panic of 2008. These trades were supposed to be safe enough to make a little extra money at little risk.