This is interesting. Banks think they have found a way to
make money no matter what happens.
March 6 (Bloomberg) — The collapse of the auction-rate bond market may
cost borrowers from New York to California at least $1 billion in fees,
enriching JPMorgan Chase & Co., Goldman Sachs Group Inc. and
the rest of Wall Street that let the market fall apart.
The firms that pulled their support of the market where states,
counties, hospitals and universities raised $166 billion are offering
to convert the securities for a price…
When the market is working, they make money; when it fails, they make
“Investment banks created the securities,” said
Peter Morici, professor at the University of Maryland School of
Business in College Park. “Now that the market has exploded they’re
going to force losses on their clients.”
Hard to know what to say about that. I guess the best way to
make money is to pretend you already have money.