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Bank Profits

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August 12, 2010 – Comments (3)

Good post at NC on how bank profits kill the economy, or rather, the increasing bank profits is the sign of a troubled economy.  Bank profits are made on increasing debt and only true winners from that is the bankers.

Keen says a sustainable level of bank profits is about 1% of gdp.  That means bank profits were as much as 6 times higher then sustainable levels.

 

3 Comments – Post Your Own

#1) On August 12, 2010 at 2:08 PM, outoffocus (23.59) wrote:

Keen says a sustainable level of bank profits is about 1% of gdp.

I agree with his overally premise. However I want to point out that he is referring to Austrailia's economy, not the US. I fear that the FIRE economy's profits to GDP are much higher here in the states.

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#2) On August 12, 2010 at 2:08 PM, fransgeraedts (99.94) wrote:

Dear dwot,

i am a long term admirer.

very interesting article. I do not agree with the idea that banks should be restricted to only lending working capital. However the general idea of a pruning of the instruments and practices of the financial markets is i think a very good and necessary one.

Maybe we could play a grass root role here in Caps in bringing about such a pruning. I would be very interested in your suggestions in that direction. Look at my "financial disarmament" post.

fransgeraedts

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#3) On August 12, 2010 at 2:18 PM, ragedmaximus (< 20) wrote:

The corrupt fed and so called banks are stealing taxpayers dollars for years.Most so called banks are nothing more than a GS or trading firm for the sleezy corrupt evil bankers.the fed and banks are in on the ponzi scheme on the blood of the taxpayers!

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