Skip to main content

Interest rates

Fixced or variable, historically variable wins because banks make money by avoiding risk. If the bank sees rates coming down they make the fixed rate attractive to entice people to lock in.

The bank is guaranteed to make money on a variable rate so the margin can be lower.

The mortgage business fuels economic growth because banks are allowed to lend out more money than they take in. The system works when most people pay on time. Too many loans go into default and the bank will be unable to meet withdrawals.

Painful irony after the sub prime meltdown is that none of the banks that bought "securities" would have lent money to the people who's mortgages they ended up holding. The buyers relied on bond ratings which were misleading to say the least and most were outright fraudulent.

Comments

Post a Comment

Popular posts from this blog

Purposes of The Corporation revised

The "Purposes" of a not-for-profit corporation, in our case, The Sweetwater Creative Collective, is a legal statement of the way in which The Collective intends to fulfill its Mission. Our Mission is to help people share their abundance in order to ease suffering. None can deny that we exist within a latticework of suffering; homelessness, addiction and poverty surround us, we're experiencing a suicide and mental health pandemic. The suffering touches everyone in some way, this begs the question, how does one go about easing suffering? Before we're able to address any of these issues individually, we must first ask ourselves, what's the root cause of so much suffering? In a word, dysfunction. The level of suffering is increasing, dysfunctional families have become the norm, the mental health pandemic is fueling ubiquitous self-medication in all stratum of our socioeconomic paradigm. Dysfunction begets dysfunction, how do we fight an onslaught which comes from with
Post a Comment
Read more

Diary Note

 My fears are not in my mind, my mind is a slave to my fears. I feel the rebound of my Spiritual highs, this feels like one, the lack of ethanol and caffeine dragging my psyche down. THC up, sitting in the library "listening" to the pressure in my heart, if feels like a web of tensions spreading across my back.  Years ago, when I first started to self-medicate, I was able to let my rational mind, this allowed me to perceive the sensation I was experiencing as a sentient presence which moved as my mind's eye espied it.  unfinished thoughts...
Post a Comment
Read more

The Port Maitland Declaration

 The Port Maitland Declaration We, the undersigned, On behalf of all parents of draft-age children and all children of draft-age parents, ask the Secretary General of The United Nations to put forth a resolution that no member nation shall take part in armed conflict with anything more technologically advanced than sharp sticks and tin-can walkie-talkies. Love Tomorrow for J-man Weib, The Dude, Gonzo and Jack
Post a Comment
Read more