Why are the banks benefitting on the rate cuts and not passing them along to the consumer?
by Mortgage Rates on Tuesday, October 5th, 2010 | 4 Comments
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The problem is banks don’t believe the fed is credible anymore. The value of the dollar is determining how banks are reacting. Banks are keeping interest rates up in an effort to collect as much interest as possible and collect as much as they can on the losses they incurred by lending irresponsibly.
Well duh… I don’t think there is a defensible argument for why the banks aren’t simply white collar purse snatchers.
I doubt you will find many people disagreeing with you on that one.
The entire subprime meltdown is caused by the lenders juicing some poor bugger for an exoribitant interest rate, and then when the price drops packaging it and the liability up and selling it back to him in the secondary market. Capitalism is the purest form of greed, and it is an artform in America. Having said that it is a very necessary part of society. We need it to improve as society , fund programs, discover cures to dieseases etc. etc.
Every once in awhile it goes too far unchecked and this happens. It WILL happen again and it will be for another reason altogether but no less greedy!
They’ve incurred some major loan losses lately and they’re trying to get some of it back.
The Muse
Well, first, there is a lag time, but that’s not your real issue, is it?
If greed determined what things sold for, why would prices ever go down? Right, they wouldn’t. Therefore, it’s not greed.
Also, why should sellers pass on savings to buyers if they don’t have to? Isn’t their first obligation to earn the maximum revenue for their shareholders?