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Wednesday, October 29, 2008 

The Time Has Come To Start Throwing Bankers In Jail (that includes bank presidents -CEO's and board members)!!


Today, the US Federal Reserve Board lowered prime lending rates to 1% in an attempt to kick start the economy by putting cheap money on the table and available for loans. HOWEVER ... the banks are sitting on their hands and silently hoarding cash that they refuse to loan at low rates.

Here is how 'free-enterprise' is working today:
The US Government has given $700 Billion TAX DOLLARS (that's money from the people) to the banks to start lending out in order to stimulate the economy. The banks have taken that money and are now sitting on it ..... why? Because they are GREEDY BASTARDS and don't like the low interest rates. They want to use tax money to make their next fortunes with! (H/T to Mound of Sound!)

"The White House press secretary said that banks and other financial businesses that have received federal bailout funds need to quit dragging their feet and start making loans.

“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” Perino said during a press briefing Tuesday.

The Bush Administration agreed earlier this month to set aside $250 billion of the $700 billion financial bailout package approved by Congress. The federal government would then use the $250 billion to buy shares of banks and other financial institutions in a move designed to bolster confidence in the industry so that the frozen credit market could thaw.

But while many banks have agreed to take billions in federal funds, the White House says that financial institutions have been hoarding the money."

Business Journal



Progressive Bloggers

Here is how 'free-enterprise' is working today:
The US Government has given $700 Billion TAX DOLLARS (that's money from the people) to the banks to start lending out in order to stimulate the economy. The banks have taken that money and are now sitting on it ..... why? Because they are GREEDY BASTARDS and don't like the low interest rates. They want to use tax money to make their next fortunes with!


Buck, I'm one free market anarchist and libertarian that agrees with you 100%. This isn't 'free enterprise' its economic fascism (and if you consider the Patriot Act, not just 'economic'...).

Do you realize that technically a 1% prime lending rate is essentially a subsidy to the bid banks? 1% is less than the rate of inflation so technically the loans after a year are at negative rates....

Food for thought...

Disgusting. And predictable. Gotta take care of those shareholders, right?

Buck, did you see the NYT'S business section piece on Saturday? A Times reporter got his hands on a "private" call-in number to hear the top dog of JP Morgan Chase discuss with senior executives when the $25-billion direct infusion of federal money would turn into new loans for the bank's customers. The answer? We're not lending that money, we're going to use it for mergers & aquisitions, to snap up some of the great bargains coming up among faltering banks.

Read it yourself:

http://www.nytimes.com/2008/10/25/business/25nocera.html?_r=1&em&oref=slogin

It's a total swindle, simply pocketing $25-billion of federal bailout money. Unfucking believable!

I wouldn't discount what you say but there's a lot more to it.

For one there is some fear psychology at work here. Whether one favors "bailouts" or not there is no way to argue that letting Lehman fail did not create a bunker mentality on Wall Street. No one knows who might be the next sacrificial pig, especially with the public getting angrier by the day.

Every financial institution knows that at some point public anger could very well halt any further assistance and no one wants to be the pig caught in that situation.

Then there's simple math. One good example is Bank of America. They used their excess cash and bought up failed Countrywide, bad assets & all. They are now going through and reviewing and in most cases, rewriting, all of Countrywide's bad loans. Thousands & thousands of home mortgages in at least 11 states that would otherwise have gone to foreclosure.

I believe it's the right thing to do but it's costing them billions of dollars to do it and that money had to come from somewhere so they were forced to cut dividends in half and issue new shares to raise cash and this of course resulted in their stock dropping like a rock. Needless to say, they don't have any doggone money to issue new loans whatever the interest rate.

The Mound of Sound ... I have included a link to that story in the main text ... thanks!

Yo! Mama! I have always had a huge distrust / dislike for bankers.
(how have you been doing lately?)

Interesting the way the system works: tax dollars, which as you mentioned is money that belongs to the citizenry, is given to the banks so that they can lend money back to the citizens at interest. That's like giving someone an apple with the hope that they'll sell you a seed. No wonder Americans hate taxes so much; I would too if that was where they were ending up (though things are probably only a little bit better here).

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