NYT: Banks Using Bailout $ For Acquisitions, Not To Write Loans For Consumers

[stopbush]

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.”

http://www.nytimes.com/2008/10/25/business/25nocera.html?partner=rssuserland&emc=rss

[SpiralHawk]

1. "All your savings and taxmoneybucks are belong to us. Smirk." - Republicon crony fatcats

[sad sally]

13. whoa! That kitty is the ultimate fat cat!

[GodlessBiker]

2. This will turn out to be another Iraq War. Do what we say now or all is lost! Congress agrees,

but many of those who voted for it will later apologize for their votes.

[MadHound]

3. And all those folks on the boards here who vehemently supported this bailout,

Have remained strangely silent as the weeks roll by and we find out that the bailout isn't for the good of the economy or the regular person, but rather for the good of Wall St. and the fatcats.

How many times does it have to be repeated, if Bush is yelling FEAR, don't do as he says.

[pokerfan]

9. Yeah, what happened to the cheerleaders?

Ah, who am I kidding? They will just parrot that tired refrain that things would have been even worse without the bailout. Honestly, what did we expect when this gang of thieves (both sides of the aisle) decided to throw taxpayer money at the problem?

The Bailout so far:
$30B - Bear Stearns
$85B - AIG
$150B - stimulus package
$300B - Fannie/Freddy
$700B - banks? :shrug:
$150B - pork for the lawmakers

$1.415T divided amongst 100M households comes to:

$14,150 per US Household

[Zhade]

23. Well, one hopes they're off somewhere, ashamed of attacking those of us who were right...

...and figuring out why they let themselves be taken by con artists yet again. Truth is, most of them probably still can't admit how wrong they were.

(You know, like the guy who operates like he has a big mind but usually turns out almost criminally wrong.)

[charlie]

4. Too Big to Fail

are just making sure they're WAAAAY Too Fucking Big to Fail, so we'll always be on the hook for their fuckups, forever and ever, world without end, amen.

And if you don't like it, you're a goddamn socialist.

:crazy:

[nichomachus]

5. Time to party like it's 1789

[Norrin Radd]

6. kicking for those who posted here trying to twist our arms to support the bank handout bill.

[Zhade]

24. Yeah, being wrong really shut them the fuck up, didn't it?

Good.

[dhpgetsit]

7. That's what a top-down solution buys you.

Further concentration of wealth and power in the hands of an ever smaller corporate elite.

Are we starting to get it, people?

[kentuck]

8. The Biggest Scam In The History Of The World...

in my opinion. A one-time transfer of wealth unequaled in history. We will regret the day.

[Poll_Blind]

10. I really think that might be an accurate way to describe it.

PB

[TheKentuckian]

11. I supported it and still do as long as we have no control

I was under no illusions that this would help everyday people other than by not having those that hold the strings crash the economy. No one ever promised that the money would be used for loans, just that it was required to maintain liquidity. It makes no difference if it was a bribe or not.

[pokerfan]

12. The constantly shifting rational

WASHINGTON (AP) — First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.

Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.

But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.

Three weeks after becoming law, and with the first dollar of the $700 billion yet to go out, officials are just beginning to talk about helping a few strapped homeowners keep the foreclosure wolf from the door.

As the crisis worsens, the government's reaction keeps changing. Lawmakers in both parties are starting to gripe that the bailout is turning out to be far different from what the Bush administration sold to Congress.

http://ap.google.com/article/ALeqM5gdxImPfgsyFSMH5OMxs6D-Bg4rGQD941J5780">More

[JackRiddler]

21. So you're saying it had to be done because of extortion...

Wait 'til the loan sharks kneecap the country anyway.

[Zhade]

25. See? Proof that those who were dead wrong just can't admit it - and then move the goalposts.

Pathetic.

[upi402]

14. i am shocked. shocked i tell you

thanks corporate dems, we needed that like we needed to send these fucks on a posh little junket

[bvar22]

15. Boy, I'm sure glad the Democrats protected the taxpayers and put....

...all that oversight into the BailOut Bill!!!


Bwahahahahahahahaha!
Now we got your Children's Money Too!!!!!

[Chimichurri]

16. That's what you get when you put in a fox to guard the hen house. Paulson

was the CEO of Golman Sachs before becoming Treasury Secretary and the dope set up to take the heat when this comes tumbling down is Kashkari or Cash N' Carry. So in the end, Paulson will siphon this money to his boys on Wall Street, blame the allocation on the thirty-something fall guy and walk away, as Greenspan did last week, feigning shock at the greatest fraud ever committed before our eyes in the history of the republic.

Then we'll see him on Fox Business channel as an economic analyst like Fox News hires criminals such as Oliver North and Tom Delay while the poor slob thirty-something phenom is thrown under the bus.

[amandabeech]

17. Chris Dodd is really going to have to shame AND THREATEN these greedsters.

The chances of getting anything veto proof going that will provide extremely serious consequences for these guys before the next congress takes office isn't good.

However, I expect that Dodd will have a VERY credible threat of near future action after the election, and he damned well better use that threat to its fullest.

[Forkboy]

18. Thank God it passed!

[Zhade]

26. HAHAHAHAHAHAHA!!!

Oh yeah. That was sweet.

If there's a silver lining, it's how quickly that fool was proven wrong.

[Forkboy]

27. It almost rivals this other thread from the primaries for sheer comedy value.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=5847583

Almost. :)

[wroberts189]

19. I would not count those chickens just yet banker scumbags.

The cat is out of the bag and running through the blogs at the speed of light with news of yet another outrage thrust upon the American people.

Greed .. it always does you CEO types in at the end. Nothing is ever enough for you types.

Be ready to give it back or lose your charter or any of a hundred other things punitive things that an angry electorate will demand when they learn their tax money is getting used to buy up at fire sale prices what's left of their 401k and other investments.

A new Sheriff is coming to town soon.

[moondust]

20. Are they obligated?

What do the wealthy do with their big Republican tax cuts? I suspect they use them to try to build more wealth which these days often means investing in overseas cheap labor operations. As far as I know their only real obligations are to their shareholders. Taxpayers? Who's that?

Banks, too, would likely do whatever they believe is best for their bottom line. Taxpayers? Don't know any.

[Zhade]

22. Those of us who opposed the bailout were right, and we told you so.

But nooooo, you had to believe liars. Hope you feel a little shame, all you pro-bailout people.

You got suckered.

Again.