Smart or Greedy

| September 07, 2019
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In my Chart of the Day, I am pondering if banks are getting smarter or staying greedy?


Banks are in the business of borrowing short and lending long. Meaning they borrow from the government at short-term, lower rates and then lend to consumers via credit cards, loans, mortgages, etc. They profit the spread, as long as the consumers continue to pay back principal and interest.

As rates have plummeted bank borrowing costs have done DOWN. But as you can see in the chart interest rates banks are charging are going UP.

They are either getting even more greedy than in the past and consumers are getting hosed. Or they are raising rates for at-risk borrowers and/or are planning for coming defaults.

Either way, don’t be surprised to see non-bank lenders such as SoFi and LendingClub continue to grow in popularity.

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

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