John Turner

Fortune magazine has a commentary on how US taxpayers will ultimately be funding Bank of America’s planned acquisition of junk mortgage king Countrywide. This kind of thing is irritating to no end.

On a similar note, here’s an analysis of why banks can offer such high interest rates for CDs and some savings accounts. Basically, the banks are in trouble, so they need to get capital, which is another way of saying they need you to deposit your money. So they offer high rates as an incentive, but the risk behind it keeps going up. The banks are willing to take the risk, because it really is YOU that is taking the risk, not the bank, thanks to the FDIC. So, when you put your money in the bank to get that 5% CD, and the bank fails, you’ll get your money, but the money you get won’t be your original money, it will be money you previously paid in income taxes. So you (and every other taxpayer) ends up screwed. Nice!