The Financial Collapse of 2001 Unwinding Message Board

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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding

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John Pitera

To: John Pitera who wrote (295)	4/28/2017 7:41:43 AM
From: elmatador	1 Recommendation of 13784

The NIM force awakens net interest margins, also known as NIM — the lifeblood of the banking sector Without NIM, there is no banking. Negative rates eat NIM. They also encourage all sorts of bad banking practices. The Fed’s rate hike was supposed to help the banks with the NIM problem. It was even said that the rate hike would destroy the NIM problem, not make it stronger. Indeed, it was supposed to bring balance to interest rates, not leave them in negativity, and flat. ... The brutal possibility coming into play: increasing the cost of borrowing in a global economy which isn’t ready for it, but rather one which still depends hand-to-mouth on cash distributions and cash burn to stay afloat, isn’t likely to generate the sort of positive feedback loops that bank shareholders enjoy in profit terms. https://ftalphaville.ft.com/2016/02/04/2152160/the-nim-force-awakens/ The article is one year old and I still keep going back to it.

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