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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (40127)	1/4/2010 2:02:44 PM
From: TimF	Read Replies (1) \| Respond to of 71588

They address those points, they talk about existing problems so they show "There was no particular 'problem' to begin with" is false. a steep interest rate curve (major 'contango' in the credit markets, to use the industry's terminology) INCREASES depositary institutions profits, not the other way around. The S&Ls borrowed short and lent long. If the market rate for short term deposits was low, while longer term rates where higher, yes that would increase their profits. But if their the rates they can offer for the deposits (their short term borrowing) are capped, and the market rate exceeds the cap then they have a hard time attracting any deposits which does not help their profitability.