Before It's News | Popular Money
Bond Market Slaughter... Seismic Shifts in Money, Metals Markets “Just the Beginning”
What happens when bond yields start doing things that they haven't done in 50 years? If your answer to those questions involves the word "slaughter", you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. Over the last several years, reckless bond buying by the Federal Reserve has forced yields down to absolutely ridiculous levels.
A Short, Sharp, Close Look at Ordinary Commercial Banking Profits – Tom Dennen
Even with the most cursory examination, lending can be seen as mostly a no-risk, 'asset-secured' business, in its simplest form seeing borrowers liable only for the original loan, which is secured against the borrower's assets, plus interest. When the loan is payed back, the bank profits in the accepted perception of what a bank does for a living – it gives low interest to depositors and takes a slightly higher interest from borrowers, their profit being the difference in interest rates. When borrowers default, they yield to the lender whatever securities they've put up, which normally have asset values far exceeding that of the original loan. The lender still profits.
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