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Talking about government printing money to buy treasury bonds. With the current interest almost zero and Treasury bond around 2%, it seems no brainer I should borrow from Fed and buy Treasury bond to earn 2% percent interest. If I can borrow 100K, I make 2K without any cost and risk. If I can borrow 100 million, I can make 2millions. I think that is why those big banks are making money now.
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In early 2008, Bear Stern collapsed and sold to JP Morgan Chase. Six month passed, nothing big happened. In September the same year, Lehman Brother filed for bankruptcy. This ignited the Wall Street collapse. Then our dear Government stepped in to rescue by pumping trillions of dollars into the financial system. Wall Street enjoys happy ride since March 2009 until now.
In April 2009, General Growth Properties filed for bankruptcy and six months passes, nothing happens. November 1, CIT files chapter 11, will this ignite the bomb of long awaited "SECOND LEG" down phenomena in commercial real mortgage? The event and time patterns are so close if not exactly the same. Â Am I paranoia or what?
http://finance.yahoo.com/news/CIT-files-for-Chapter-11-apf-1202955938.html?x=0&setopStories&pos=main&asset=&ccode=
#housing