tag:blogger.com,1999:blog-7806136543904112143.post637072594168754721..comments2023-10-30T09:23:42.803-05:00Comments on Some Assembly Required: SAR #12095Charles Kingsley Michaelson, IIIhttp://www.blogger.com/profile/04364694465614330540noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7806136543904112143.post-86303872883772091212012-04-04T17:49:15.751-05:002012-04-04T17:49:15.751-05:00«Could banks legally turn a profit if they stopped...«<i>Could banks legally turn a profit if they stopped taking advantage of the poor, preying on the unsophisticated and forging documents?</i>»<br /><br />But banks don't make profit: over the full cycle they make net losses, that is the profits they book during the "good" years are smaller than the losses they take during the "bad" years.<br /><br />And I wrote "book" above about "profits" because those are just paper profits, as they depend on deliberately underestimating costs (of multi-year investment risks), which then happen during the "bad" years.<br /><br />That is, in order to create some profitable years, bankers use clever accounting to shift costs from the "good" years to pile them up in the "bad" years; without this no year would be profitable, at least not at the colossal levels of compensation bankers give themselves.Blissexnoreply@blogger.com