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Given the way, that is, that Treasury Secretary Henry M. Paulson Jr. had decided to use the first installment of the $700 billion bailout money to recapitalize banks instead of buying up their toxic securities, which he had then sold to Congress and the American people as the best and fastest way to get the banks to start making loans again, and help prevent this recession from getting much, much worse.
In point of fact, the dirty little secret of the banking industry is that it has no intention of using the money to make new loans. But this executive was the first insider who’s been indiscreet enough to say it within earshot of a journalist.
(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)
“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”
Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.
Feeling violated yet?
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At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.
~Abraham Lincoln Lyceum Address
Last edited by conraddobler; October 25th, 2008 at 10:51 PM.
Felt violated in 1991, and haven't been able to sit comfortably since.
Not surprise in the least, never should have passed the bailout, EVER!
__________________ A-Dub on Playoffs:“You get a great sense of pride you stuck it out,” Wilson said, “now that it’s finally here.” An Out of State Fan's Guide for Seeing the Cardinals in AZ: http://www.arizonasportsfans.com/vb/blog.php?b=71
Still not yet. These bastards never had any intention other than picking the public's pocket in order to reloan the same funds back to them in the form of CC debt and new mortgages. The sorry assed public is buying into it and the bankers are falling down laughing.
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In politics, nothing happens by accident. If it happens, you can bet it was planned that way.
Franklin D. Roosevelt
"Those who can make you believe absurdities can make you commit atrocities." --Voltaire
I just got an offer for 0% credit card, no transfer fee, good until March 2010.
I didn't think I'd be seeing THAT anymore...
Yes - I feel special - I'm going to pay higher taxes - no matter who gets elected - for YEARS to pay for this bailout.
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"Seachicken - it's what's for dinner" - me (until the 'Hawks sweep the Cards)
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