Quote Originally Posted by ar81 View Post
Banks do not lose money.
Banks create money out of thin air and then they lend it.
Unlike loses in productive companies where losses represent real assets, in the banking industry a loss is failure to fulfill repay promises of money that was created out of thin air, a broken promise on money that did not exist.

Imagine this. Someone deposits $10 in my bank. The current reserve requirement ratio allows me to create $100 out of $10 of deposits. Then I create $100 in my accounting books and now I can lend $100.

You come and borrow $100 and then you default. How much money did I lose? Nothing. I only would need to reduce $100 from the assets, but since they were never backed by real assets, but merely a promise to repay money that did not exist, the loss is not real.
You're an idiot.

Even in your insanely simplistic model, the banks did lose money. The banks lost the $10. Then how much did the banks pay the employees who dealt with your loan every step of the way, lawyers to try and enforce it from start to chasing it up unsuccessfully at court to finish it, the buildings the bank owns where you went into to borrow the money etc, etc, etc

Yes there's a multiplier, but you can't multiply nothing - the banks had their own money involved, and they spend their money every step of the way. Besides you should know that multiple banks have been reporting massive losses in recent years while some banks have failed - while more would have without state support. So you're ignorant too.