What companies/industries are hit by global economic crisis and are laying off?

[uls]

But if they do not lend out money, large amounts of deposits are a burden to them coz they have to pay interest on the deposits

banks rent depositors' money

they use depositors' money to pull in more money so they can pay depositors the rental fee (interest) and they keep the rest as profit

if they are not making loans, where will they get the money to pay interest?

now they are just sitting on huge piles of cash

they just buy US treasuries that earn 2%

[ab_initio]

But if they do not lend out money, large amounts of deposits are a burden to them coz they have to pay interest on the deposits

banks rent depositors' money

yes. this is why banks are primarily allowed to engage in financing or lending a portion of the bulk of the deposits to the public so that they can also generate profits.

on the other side of the relationship, it is one of a debtor and creditor (obligee-obligor)thing. the depositor lends cash to the bank and the bank in turn gives out to the public in the concept of loan. the difference is that, in ordinary deposit, the depositor (obligor) can get the deposit at will. whereas, in loans extended by the banks, the same need to have a term, and the bank can't just collect until it's due and demandable; likewise, the banks don't extend unsecure debts, as a general rule.

[uls]

ab intio, thanks for the textbook explanation of what banks do

but that's not the issue

if you backread, i was just disagreeing with OB's, i mean, Gen.Miting's post where he said:

whenever there is a crisis or a looming crisis, the banks tend to benefit from the situation. the fear and paranoia makes people want to spend less and save more and therefore, all-time high in record deposits.

i disagree

i posted an article to back up my disagreement

the article says banks' profits are falling during this crisis

despite having more of deposits, banks are not making more money these days

they are actually making less money coz they are lending out less money

that's it

[ab_initio]

^^ i see. thank you, Sir.

my comment is limited to your post. just take my post in the light of your comments, Sir.

was just too lazy to backread. wehehe.

[uls]

i think you're talking about the wild wild west type of banks. so 18th century thinking hehehe

i posted an article that says the 4 biggest banks in the US are reporting lower profits. Sa lagay na yan dumami ang deposits nila.

JPM, BoA, Wells Fargo, Citigroup -- wild wild west pala sila

one of us is not in touch with reality... and it's not me

--

you talk like sitting in huge piles of cash is a big big problem

yes it is

the biggest banks in the US, UK, EU are not lending

companies are going bankrupt, people are losing their jobs

it's affecting the whole world

that's a big problem

[uls]

^^

excess reserves

in order to protect against unexpected withdrawals, banks are required to maintain a certain level of reserves

anything beyond that level is classified as excess reserves

the chart above shows US banks have huge amounts of excess reserves (NOT LENDING)

they are HOARDING cash

and look at what's happening to the US economy

and how it is affecting the world

so yes, sitting on huge piles of cash IS a big big problem

--

i got stuff to back up my opinions

OB, i hope you would do the same

[Galactus]

Guys, you're falling for OB's trap.

His MO is to make controversial, illogical or hare-brained statements to bait you to react and reply to his post. Once you have done so, he'll engage you in a spirited debate which predictably leads to nowhere.

Stop feeding the troll, and just ignore him.

[CVT]

Guys, you're falling for OB's trap.

His MO is to make controversial, illogical or hare-brained statements to bait you to react and reply to his post. Once you have done so, he'll engage you in a spirited debate which predictably leads to nowhere.

Stop feeding the troll, and just ignore him.

Hehehe, how I wish that bro. Syuryuken, who should now be settled in NZ, were back online here.... (Kaso, hindi yata uso internet doon.... )

7303:soda:

[FWC]

Guys, you're falling for OB's trap.

His MO is to make controversial, illogical or hare-brained statements to bait you to react and reply to his post. Once you have done so, he'll engage you in a spirited debate which predictably leads to nowhere.

Stop feeding the troll, and just ignore him.

Well, at the very least, he pushes us to think thus giving our brains a much-needed exercise. I'm actually having fun and learning a lot from these discussions. Keep it going guys!

[ECG]

tinamaan din pharmaceutical industry. nagbawas ng employees ang Roche, Schering P., tapos nagsara na ang Bristol Myers Squibb.