If any of you keep up with my facebook status updates.  I must say that this whole banking thing has got me all confused.

Here is the most recent piece of it.

I just read this: http://paul.kedrosky.com/archives/2008/09/22/quote_du_jour_2_1.html

And it got me to wondering.

If they can only provide 15-20% returns.  But are leveraged at 30x debt to equity.  Doesn’t that mean they were only making about .5% for each factor of equity?

That seems to be FAR lower than what the bank would pay me for keeping my money in their savings bank account…

In other words, it would seem, if I could get 30x out of my equity, i could make 15-20% returns on my money just by putting it into fdic banks?

Granted, this is an apples to orange comparison as GS is a lot bigger than the small man such as I, but the point remains.

So, what is it that I am missing from this thought process?  Please, all you financial peeps shed some light?