I told him if they did this for all their customers, their credit scores would be damaged and nobody would be able to borrow any more money for things like mortgages and business loans, and this would be very bad for the banks and the economy at large. I was stunned when he agreed with me! He also agreed with me on the “vicious cycle” idea. But he wouldn't budge.
This whole thing with the banks doesn't make any sense to me at all. The government took their toxic assets off their books, right? Why are they clamming up now and hunkering down? The only conclusion I can reach is they're still in some kind of trouble, and we're not being told about it.
If you listen to Bernanke, Geithner, and the rest of that crew, everything is just fine and dandy and we're on the road to happiness and prosperity once again. They're going to have to work some magic to get people to buy during the holiday season coming up. With 12% unemployment here in California and no credit available, I can't imagine we're going to see a big turnout at the stores.
That’s funny?! Bank of America just raised my credit limits. I have accounts but the balance on each is ZERO!
When I heard Charlie Rangel propose the Mother of All Tax Increases when the dems took power in 2007, I knew bad stuff was going to happen. So at the time, I worked hard to become debt free (personal) and limit my exposure in my small business as much as possible. (I only have the accounts with BOA for emergencies.)
Debt is Slavery!
The ‘progressives’ want you to be helpless and dependent on the government. A wise man prepares for the worse but if it does not come, he is better for it!
You’re making some huge assumptions there. And there are no actual facts to support them.
Deo volente wrote:
This whole thing with the banks doesn't make any sense to me at all. The government took their toxic assets off their books, right? Why are they clamming up now and hunkering down? The only conclusion I can reach is they're still in some kind of trouble, and we're not being told about it.
Here's reality. The Emergency Economic Stabilization Act of 2008 was passed to allocate some $700,000,000,000 to allow the Treasury to “purchase troubled assets from financial institutions.”
However, Helicopter Hank Paulson could never figure out how to purchase the actual troubled assets. So, instead, he just invested the money in preferred stock in the various banks. He was hoping that the investment of capital would offset the losses from the troubled assets, enabling the banks to write them off entirely and clean up their books. But there was no requirement to write anything off, and the banks didn’t actually do that.
TurboTax Timmy has also tried to come up with a plan to actually purchas the Troubled Assets, as the law specified. There have been many proposals, at one point there was going to be an auction, where you bid with 10% your own money and 90% of your bid will be underwritten by the government. But as far as I can tell, not a single dollar of the TARP has actually purchased an actual bad mortgage or “mortgage backed security.”
Oh, yes, and some of the TARP money was diverted by President Bush to buy stock in GM and Chrysler. Then, in February or March, Geithner and Obama also dvierted additional billions of dollars from the TARP funds and “loaned’ that money to Chrysler and Government Motors.
I think TARP funds have been used for other things as well. About the only thing that TARP fund money hasn't been used for is to actually purchase “Troubled Assets.”