[clue-talk] The stimulus bill

[Nate Duehr]

On Feb 6, 2009, at 9:44 PM, Angelo Bertolli wrote:

> I think something also needs to be said about how companies are  
> allowed to report their earnings and assets.  Again, there needs to  
> be regulation (which last I heard they were going to relax again  
> because of the crisis) on how the banks are allowed to report their  
> mortgages.  I mean, is it really fair if I go around telling  
> everyone that I have $25,000 because I loaned Jed some money and  
> when he pays it back, that's how much I'll have?

If you never want to have any credit ever again, go ahead and tell  
bankers they need a 1:1 ratio of money in cash versus loans outstanding.

The entire banking system runs on the MARGINS of risk... currently  
Federally regulated at about 9:1.  (You get to lend out 9 dollars for  
every 1 dollar of deposits.)

THIS is why banks started buying each other with bailout money... some  
banks HAVE deposits, others did NOT... guess which ones were more  
likely to fail prior to them buying each other up and spreading the  
risk between the two now-merged companies?

Nate