/sarc
Many of these banking and financial institutions see the writing on the wall and are trying to give the TARP money back, but the Obama Administration is calling for a stress test, something that will allow Obama to decide who is fit to survive.
In other words, Obama wants to grab the banks.
He already owns most of the auto industry,
except for that hold out FORD.
Health care is next.
History will declare the election of the Most Merciful Barack Hussein Obama, the moment when America became a socialist state, and likely will call this the Fall of America.
You are correct about stifling credit by shafting bankers. Thank goodness the Senate rejected the bankruptcy cramdown bill. If you view that bill in conjunction with Obama’s Homeowner Affordability and Stability Plan, it basically puts a gun to lenders to take write-downs on mortgages entered into in good faith, effectively enacting widespread coercian of banks to hand over bank capital to repair the balance sheets of undisciplined individual borrowers.
Had that legislation passed, any borrower with a debt-to-income ratio greater than 31% would have had a much, much more difficult time obtaining credit, else the bank would be risking cramdown in bankruptcy. I assure you, many bank loans are made successfully in the 30% to 45% DTI range. Part of the effect of Obama’s “plans” have had the effect of borrowers viewing government as an ally against the bank or an eventual savior to bail them out. Defaults have gone up as a result.
Are Obama and the rest of the libtards in government REALLY wanting to increase the availability of lending? As usual with liberals, their words say “yes”, but their actions say “NO”.
of course the response should be for investors to park their money where the government doesn’t look likely to take it away from them.
Thats gonna be bad, huh?
The major creditors who agreed to be subordinated and take an outsized haircut were wards of the state - strong-armed by Timmy G in Treasury. The others didn’t have the fed entanglements and therefore are able to insist on the rule of law over fascism.
If this stands, from now on, the only available source of credit will be the federal government -- which seems to be exactly the plan, for the complete socialization of the economy. This is VERY big.
Of course those “secured creditors” will either relent to Husseins blackmail or face years of investigation, hearings, IRS audits....get the picture?? Ain’t it great to declare a permanent holiday for law and justice??
This has been superseded by events — the Chrysler situation has now gone to NY bankruptcy court.
What keeps haunting me is, “How is this legal?” Under what law, what power, does the President do this? Isn’t coercing the TARP banks into accepting adverse conditions against their fiduciary responsibilities to their investors and creditors illegal? Certainly Congress could pass laws to allow this, but have they? Who has standing to sue to put a stop to this?