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dwinps t1_jea7mx7 wrote

Reply to comment by megaultraman in Subprime is back on the menu boys! by megaultraman

Supposedly $70B

$30B from new deposits, they also had cash and other assets

They earn interest on their $160B loan portfolio as well

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megaultraman OP t1_jeaelmd wrote

That $30 billion was just a token vote of confidence and only has a lifespan of 3 months. But maybe JPM et al will loan them $30 billion at rock bottom rates indefinitely, but I doubt it. Then it's back to the discount window for them.

So they are going to blow through all their cash and sell their loans at a loss when they can just borrow the damn money and use that to make money instead? I don't hear about anybody liquidating assets to pay back the Fed, do you?

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dwinps t1_jeaxxxq wrote

Who knows if FRB is going to make it, not me, but asserting that they need to be able to loan at 5% over what they are paying depositors is nonsensical

As for hearing about them liquidating, no they definitely don't give me a call and tell me if they do.

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