Comment of the day comes from John Slater:
You’ve had some interesting posts on Stanford. It appears that they have taken deposits to acquire trading/speculative assets. Not sure that what the big trading banks have done is all that different in the end.
It’s a good point. Of course, the big trading banks do make loans. But they’re just as prone to excess and sports sponsorships as Stanford. And they can lose more money in a quarter than Stanford International Bank has as its entire deposit base. But hey, at least their depositors have FDIC insurance, which means that you, the US taxpayer, are guaranteeing they’ll get their money back. Thanks!