Quote:
Originally Posted by Rochard
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Yet on the other hand, the banks love Trump. In the event Trump goes bankrupt again, they banks will just loan him hundreds of millions of dollars again like they have in the past. The banks don't care because it's not their money they stand to lose, and they make money no matter what. It's the banking industry and the housing market and the recession all over again; The banks make money no matter what happens. ...
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I hope that you realize that the Banks pass along the cost of their losses by inflating the interest rates that borrowers pay on revolving debt, credit cards, student loans as well as uncollateralized personal and business borrowing. Did you ever wonder why credit is so expensive when the FED rates are so low? All borrowers are financing the bankruptcy losses. Government unit and corporate bond prices factor in risk in their discount to yield ratios also.
When a bank writes down, or writes off, its equity in a loan asset (Total equity by net loans) the bank loses its loan equity. The remaining borrowers indirectly pay and the shareholder equity is written down -- the loss is real.
Society pays the loss.