Berkshire Hathaway Class B Message Board

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Non-Tech : Berkshire Hathaway Class B

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To: Jon Khymn who wrote (1488)	5/8/2003 1:21:47 PM
From: The Duke of URL©	of 1652

[intentionally not spellchecked] "Geeeeeeeez, Do you really think my uncle Greenie doesn't care if my grandma and grandpa lose all their nest money on bonds?" Once your grandma and grandpa take their money out a a federally insured account and stick it in some fannie mae bond fund a number of good things happen to the bank and a number of bad things happen to gramps. First, think about it. If it were such a good deal, why would the bank tell your grandparents about the deal anyway? Why wouldn't the bank take you gramps money, give them 1.5% and reinvest in the mortage at 6%. First, the bank no longer has to pay fdic insurance on the withdrawn deposit. Next the bank gets commissions on the sale. AND THE GAURANTEE BY FANNIE MAY is NOT fdic insurance in fact if fannie may goes bk they IS NO GUARENTEE THEY WILL PAY. The bank gets fees for packing up the derives, selling to fm, having their own depositors pay a commission for loosing the federal guarantee. Now they can lend more money to ENRON at 75%. Meanwhile Bank earnings have never been better, have they? This is why the repeal of Glass Steagal was wrong. Listen to Elliot Spitzer or Arther Levitt.

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