You have no idea how banks operates.
A business loan can be obtained by most everyday people - the banks have no say how you operate the business or step in to deal with risk.
A car loan is given out mostly without question to everyday people - a 99% depreciating asset.
All banks have stakes in funds, some win, some lose.
Yes they are stupid, you are the smart guy here calling them absolute morons from your home. They only make a net profit of around 10 $billion a year.
yes, business loans can be obtained by most people. but guess what? you're still required to tell the bank what business the loan is for, which means before the bank gives out the loan, the bank has information on what kind of business the loan is for.
loans come with interest. whether or not the loan recipient does well due to the loan has no bearing on the amount of interest paid back. so there is zero upside to loaning over a hundred million dollars to a fund trading one of the riskiest assets.
oh and 1)
you're changing my words b/c i never said it's stupid for banks to give out loans to funds. i said it's stupid for banks to give out loans to funds that trade super risky assets like fx, ng, cl.
and 2)
you ad hominem attack sure makes you sound smart. because earning 10 billion a year automatically means you can't be stupid in a certain area. first of all, you think the interest they earn by loaning out money to funds trading risky assets comprises even 10% of the 10 billion in profits they're earning?
it's like saying google knows more about succeeding in social media and messaging apps just because they make billions and billions of profits in their adwords and adsense business. look at how well that turned out.
how much citi makes in their other businesses really has no bearing on the soundness of a practice engaged in their "loaning out to risky funds" business. believe it or not, and this is something americans fall for all the time, being rich and prestigious doesn't actually mean you're smart at everything. *gasp. also, being smart in one area doesn't make you smart in another.
you should spend some time with mckinsey consultants, the best of the best, the creme de la crop. very smart and very cool. muh prestige.
until you realize these consultants are simply using their limited internal research team or outsourcing research and charging a premium for it by virtue of the 'mckinsey name' and CEOs buy that shit up not b/c they think it's the best thing since sliced bread, but b/c it relieves them of accountability. so when shit goes south, they can point their fingers at mckinsey.
according to your logic, b/c it's 'mckinsey' and they make MUH money, they would know more about how to turn around companies when the truth is that mckinsey is terrible when it comes to turning around companies in some industries and are prone to stripping the company down so that the board and shareholders can benefit very short-term. mckinsey is good at some things and terrible at others; no different with citi.
