Now, those systems have helped cause severe financial heartache: last week, consultants discovered that HomeSide had been feeding the wrong interest rates into a critical valuation model since 1999.
Basically the whole austerian movement has been wrong about everything for two and a half years — wrong about interest rates, wrong about the effects of austerity on GDP in Europe.
"The church saw that something was wrong —the interest rate on loans should not be so high, there should not be such relations with business, there should not be such relations with other spheres," he said.
"We have been able to overcome this financial blow-up". Cash from the bond sale will allow Orange County to emerge from bankruptcy protection next Wednesday, just 18 months after it filed under Chapter 9 of the U.S. Bankruptcy Code with $1.64 billion in losses from wrong-way interest rate bets by former county Treasurer Robert L. Citron.
Remember, the Fed at times has been really wrong about interest rates in its storied history.
But for much of last year and into 2015 Woolnough has been on the wrong side of the interest rate bet.
If it gets the interest rate wrong, an influx of lenders or borrowers will drive it back to where it's supposed to be.
It's basically the notion that the interest rate is wrong — that given the overhang of debt and other factors depressing private demand, real interest rates would have to be deeply negative to match desired saving with desired investment at full employment.
What's Wrong With Negative Interest Rates?, Project Syndicate, April 13 , 2016
Now, there's nothing necessarily wrong with higher interest rates.
If the bank makes a wrong assumption about interest rates, the portfolio can take a hit.
