Why Banks are Making Less Money 2
Previously in Transcendental Generalization, I discussed why banks have been making less money recently.
Today, there is a nice article in the Motley Fool on this subject:
Banks have been beaten down this year, and for good reason. The yield curve (the difference between the interest rates of short- and long-term bonds) has been tightening, which simply means that a bank's cost of raw material (money) is rising while the prices it can sell its finished goods (loans) are relatively flat.