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By Way of my sole..

November 17, 2009

.. assist on updating material to War and Spore.. h/t: Yves Smith@naked capital (who has BTW a pretty informative take on Chinese/US currency dealing whilst “diverting” attention from this in criticizing the “carry trade”).

Snipped from that same piece and edited out I couldn’t have made the same point better myself.. here it is:

… low rates (interest) are an ideal setting for banks to make money. Greenspan pulled the same trick in the wake of the S&L crisis, and it enabled banks to rebuild their very wobbly balance sheets comparatively quickly.. This plus high spreads makes for a very attractive environment for any new business.

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