banks

The Federal Deposit Insurance Corp. issued its quarterly report on the U.S. banking industry Thursday, saying the group earned $18 billion during the first quarter of 2010, with more than half of banks and thrifts reporting year-over-year improvements.



Now looking at this you might assume that these bankers must be very smart earning this much in a down economy but upon further inspection their secret is revealed. You see the government loans money to these banks at zero percent interest and then these banks turn around and purchase government bonds that pay three percent. This gives the banks automatic profits with no risk and allows the government to have money to spend on other things.



I want to give everyone the benefit of the doubt but when the senator responsible for all of this, Chris Dodd, has decided not to run for re-election I wonder if he will receive a nice retirement gift from these banks. Call me cynical but this does not pass the smell test.