Fixed - income investors often forget that there's a silver lining in the black cloud of rising rates: new bonds have higher coupons, which
means more interest income down the road.
ARM products are less risky for mortgage lenders, because if interest rates rise during the term of the loan, the lender
gets more interest income.
The top online banks pass on (some portion of) the savings to customers, which means
more interest income in your pocket.
So not only did Wall Street fuck you with millions of foreclosures, absconding with $ 700 billion of TARP, having the Fed buy up $ 4 trillion of their toxic mortgages, but they reaped
far more interest income from credit cards by not lowering rates to 10 %.
One of the results of dealing with the assets in this way was that they
produced more interest income than they would have done had the funds remained in the current account contained in the order.
ARM products are less risky for mortgage lenders, because if interest rates rise during the term of the loan, the lender
gets more interest income.
No more interest income which is 100 % taxable, just capital gains tax which is 50 % taxable, making your after - tax return higher.