Why do banks lend out mortgages for 4% interest rate when they can just invest that money in market indexes and get 8%...

>Why do banks lend out mortgages for 4% interest rate when they can just invest that money in market indexes and get 8% in the longrun?

8% is risky. They can legally murder you if they don't get their 4%.

The loan is backed by an asset that they can take. Almost risk free for them.

Yeah. Fuck it. Just have everyone put money into mutual funds that are only invested in other mutual funds forming a closed loop. While we're at it, let's stop producing anything and just arbitrarily print money and release bogus reports on GDP because why the fuck not?

Market indexes include real estate

Its an opportunity to make money and kind of a safe one since they can reposses a tangible asset

8% return over time , not year over year endlessly - averaged

But don't they? They hedge their bets and diversify.

Nice try Bernanke

>market indexes and get 8%

why stop there? why not just invest it all in crypto?

Why not invest it all in tulips?

So you're telling me they're doing it for the good of the world and for the health of the economy user?

Pic related

they're doing it because market indexes are not guaranteed anything, they can go up, down, sideways, or crash. montage loans are a guaranteed 4%, no matter what.

bc they have a reserve ratio, and can lend out money they dont have. this is banking 101

Kek

They can just take someone else's cash and lend it out ten fucking times over. Fractional reserve banking is a fucking sweet deal. Can't just gamble everyone's cash away, or they won't have anything to give back to people if the market crashes. But loans are A-OK for some reason.

/thread

Banks are almost guaranteed to win. Especially now that loans have gotten so strict.

>legally
>murder

I thought banks these days flipped the majority to fannie to be put in agency mbs collecting a sweet fee and getting it off their books, essentially acting as nothing more than a sales front for a behemoth centralized too big to fail taxpayer subsidized housing system. But I don't actually know this it's just my instinct

they get to borrow unlimited money at like 0.01% interest . lending at 4% with collateral is fantastic for them . literally just sit on your hiney and collect free houses.

fuck me OP is a dense cunt

>what is war?

>he thinks stocks are a Ponzi scheme
>he doesn't realize that stocks are an ownership of a company that sells products and makes profit
>he doesn't realize if everyone put money into the stock market, the price would get bid up so high that no one would make money
>he doesn't realize that the returns on the stock market reflect risk