Negative interest rates

[Broncojohnny]

i said good day!

..........You lose!.....You get nothing!......... Now GOOD DAY!

[mstng86]

I doubt that you will see major banks follow this unless things really really go to shit. It happened in Japan in the early 1990s when banks were holding Yen denominated deposits. It means the bank sees some risk in dollar denominated deposits or they are getting too many deposits. I think the latter could be more likely than the former because you have a lot of people fleeing from the Euro at the moment.

It illustrates what I have told Denny a hundred times, the dollar is the best of all the currencies people can hold. There is the Swiss Franc which some say is better but there aren't enough of them to go around from what I have read. I'm no currency expert by any means so maybe someone can chime in.

The main reason I ask is because, from what I remember, BofA is the largest bank as far as deposits go. It makes me wonder if BofA is not thinking about this or are too afraid to throw it out there.

[Hobie]

In other words, they are just passing their losses along to the client.

That is what every business does?

I'm no banking expert, I'm very much a newb, and could very well be wrong.

Isn't the bread and butter for most normal banks the interest it earns off making loans?

Aren't the current fractional reserves only 10%?

So you put in $1000. The bank holds $100 in reserve and loans out "your" other $900.

It's earning profits off your money and discouraging deposits would seem counterproductive.

Discourage deposits, money to loan dwindles, interest paid back/profits on that money also dwindles, no???

Just my simpleton's perspective on banking.

[mustangguy289]

I'm no banking expert, I'm very much a newb, and could very well be wrong.

Isn't the bread and butter for most normal banks the interest it earns off making loans?

Aren't the current fractional reserves only 10%?

So you put in $1000. The bank holds $100 in reserve and loans out "your" other $900.

It's earning profits off your money and discouraging deposits would seem counterproductive.

Discourage deposits, money to loan dwindles, interest paid back/profits on that money also dwindles, no???

Just my simpleton's perspective on banking.

Government sees bank is suffering and money is dwindling and gives them a bailout.

[Broncojohnny]

One month T-bill went negative today

[slow99]

A = L + E. Deposits are liabilites for a bank, loans are assets. When you have a shitload of L and aren't making a ton of A, what happens to E?

[line-em-up]

...

Thank God I don't have any money to worry about where to put it.

[slow99]

One month T-bill went negative today

Yep, return OF capital, not return ON capital.

[Broncojohnny]

On the other hand, does this really even matter? We all know that real inflation, meaning inflation including energy and food is through the roof, so the net interest rate has been negative for years. Negative rates would just mean we are a notch lower on that net scale which is probably already -3% or more.

Oh, I think this week is going to set an interesting tone for the Fed meeting next week....QE3 anyone? lol

[mustangguy289]

So essentially... they should pay me to borrow money.... since they are charging me to deposit money.

[90GT50]

..........You lose!.....You get nothing!......... Now GOOD DAY!

It's
YOU LOSE! Good DAY, sir!

I'm just saying.

[Broncojohnny]

It's
YOU LOSE! Good DAY, sir!

I'm just saying.

Who cares

Jim Cramer is going to be interesting this afternoon, can't wait to see!

[90GT50]

Who cares

Jim Cramer is going to be interesting this afternoon, can't wait to see!

Me, obviously.

[Broncojohnny]

Me, obviously.

Well fuck you and Gene Wilder then