What was involved, instead, was a complicated manuever to restart bank business lending on terms that were sufficiently lucrative for the banking industry to accept.
sits uneasily with the rest of his analysis. You're only able to take advantage of the 1994 interest rate environment if you've got a lot of floating-rate lending going on -- ie loans to "the little guy" (typically overdrafts and small business loans). If you were involved in the "high-risk, high return" end, which at that time meant Salomon Brothers and mortgage bond trading, you got your clock cleaned.
And the bit Doug identified as weird is weird beyond belief:
It does not like the grubby business of small-scale, low-margin, retail mortgages to lower-income people. Much better the flashy hedge fund, the Internet start-up,
the real estate investment trust!
Maybe in 1994, but certainly not for the last five years. People *hate* investment banking business -- high risk, poor return, commodity industry and the employees take all the returns anyway (long may this bit continue). "Grubby business" is what made Lloyds TSB and HSBC the market capitalisation gians that they are today. Citibank has almost entirely got out of this field to concentrate on grubby business. Morgan Stanley paid a fancy price to merge with a grubby credit card business (Discover) in order to get some sort of stability in earnings. The idea that Internet start-ups are being fuelled by bank credit is way off. And hedge funds borrow through repo anyway.
Whoever got the idea that retail business with low-income people was low-margin, anyway? I'm happy to forward my credit card details to JKG if it'll help the cause of knowledge
dd
By the way, I thought that the Feds were wholly, not partly, owned by the banks?
___________________________________________________________________________
_____
---------------------------------------------------------
This email is confidential to the ordinary user of the
e-mail address to which it was addressed. If you are not
the intended recipient, please notify the sender
IMMEDIATELY on (44) 171 638 5858 and delete the message
from all locations in your computer. You should not copy
this email or use it for any purpose, or disclose its
contents to any person : to do so may be unlawful.
Email is an informal method of communication and is
subject to possible data corruption, either accidentally
or on purpose. Flemings is unable to exercise control
over the content of information contained in
transmissions made via the Internet. For these reasons
it will normally be inappropriate to rely on information
contained on email without obtaining written confirmation
of it.
----------------------------------------------------------
conte?y