Toddsterpatriot
Diamond Member
Awesome. So, you can see that the red line, the floating rate of LIBOR, crossed the blue line, the Fixed Swaps Rate.
When those crossed the banksters were insolvent and the financial system froze. So, the bankers take the low floating rate and the counterparties, who fear inflation, like government and medium businesses, all take the fixed rate that is higher and they lose. When the banks lose, and the LIBOR exceeds the Fixed, the banks get bailed out. Since the interest rate swaps market is the biggest on the face of the earth, this is the biggest scam in the history of finance. I am not a chart guy, but this was an easy one to make and very revealing.
Yeah, whenever short term rates rise above long term rates, we're in trouble. So what?
Still looking for proof of your silly swap claim?
Tell me again how after a business borrows at a fixed rate, they have to enter into a swap agreement with the bank. Why? To get their rate "doubly fixed"? LOL!
Ok, Business and government wants a credit line. In order to qualify they must enter into a swap. The bank requires it. The bank lends a fixed loan, but assumes the floating rate on the swap. Swap Crisis Dollars Sense
The bank requires it. The bank lends a fixed loan, but assumes the floating rate on the swap.
If a bank takes the floating side of a swap, the counterparty takes the fixed side.
The borrower is already taking the fixed side. Why does the bank need more floating side risk?