Banks Are Going to Cash

An odd series of events are unfolding in the banking system. As the banks slowly but steadily clean up legacy balance sheet issues (mostly attributable to non-performing mortgages), they counter-intuitively become more cautious and conservative managing their assets.

I don't know why this is happening but it is obvious in their financial statements. The Federal Reserve's monetary support over the past five years was supposed to supply the banks with the liquid capital necessary to afford for the losses that need to be absorbed. During that process, like an injured person convalescing, it was expected that the banks would be more cautious on lending. It was logical, and that is indeed what happened....635 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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