An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Pages
▼
Pages
▼
Sunday, March 22, 2020
9.5%
Why is the ratio for the system always about 9.5% and for the 4 more conservative money centers about 9.0%?
Evolved from the apes by random chance maybe? Somebody flipped a coin? Rolled dice?
Fascinating post! Maybe it is psychological -- as high as you can get under a multiple of 10?
According to some eastern philosophy, 9 is as close as one can get to perfection, since as the highest single-digit number (in base ten), symbolizes completeness.
But 10 percent is also, by convention, the reference discount rate for evaluation of general public investments. For instance, the US Office of Management and Budget uses a 10% real rate. So 9 may really be about 10, as I say. (I know, other agencies and governments use different rates, but it seems to me most do so in reference to 10...). Ok, I agree, this is just wild speculation...
Fascinating post! Maybe it is psychological -- as high as you can get under a multiple of 10?
ReplyDeleteAccording to some eastern philosophy, 9 is as close as one can get to perfection, since as the highest single-digit number (in base ten), symbolizes completeness.
But 10 percent is also, by convention, the reference discount rate for evaluation of general public investments. For instance, the US Office of Management and Budget uses a 10% real rate. So 9 may really be about 10, as I say. (I know, other agencies and governments use different rates, but it seems to me most do so in reference to 10...). Ok, I agree, this is just wild speculation...
Do you have a theory, Matt?
Marian it is a rhetorical question(s)...
ReplyDeleteThat is the total Leverage Ratio that govt regulators make these Depository Institutions operate at...
Retained Earnings (A-L)/Total Assets = 0.095
ALWAYS....
It didnt evolve from the apes by random chance.... people do it...