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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-16-08 11:58 PM
Original message
Banks Are Likely to Hold Tight to Bailout Money
Edited on Fri Oct-17-08 12:02 AM by MannyGoldstein
Source: The NY Times

Even as the government moves to plug holes in the nations banks, new gaps keep appearing.

Since mid-2007, when the credit crisis erupted, the countrys nine largest banks have written down the value of their troubled assets by a combined $323 billion. With a recession looming, the pain is unlikely to end there. The problems that began with home mortgages, analysts say, are migrating to auto, credit card and commercial real estate loans.

The deepening red ink underscores a crucial question about the governments plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves?

John A. Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view. We will have the opportunity to redeploy that, Mr. Thain said of the new capital on a telephone call with analysts. But at least for the next quarter, its just going to be a cushion."



Read more: http://www.nytimes.com/2008/10/17/business/17bank.html?...



No shit, d-u-u-u-u-u-h. That's why we should have purchased VOTING shares, like they did in Sweden - you know, the plan that actually worked! We could force the goddamn banks to use *our* money for *our* own good.

Instead, my family just gave $10k or so to bankers so they can buy another Ferrari.

Fucking Paulson knew this was just a goodbye kiss to his friends. Dear God, how can the Congressional Democrats be so stupid and/or corrupt to allow this?
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dweller Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 12:03 AM
Response to Original message
1. you should post this in tomorrow's SMW n/t
rec'd
dp
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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 12:22 AM
Response to Reply #1
2. SMW? n/t
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dweller Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 12:34 AM
Response to Reply #2
3. stock market watch
posted early in LBN (late breaking news) it runs daily M-F

dp
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FreeStateDemocrat Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 05:44 AM
Response to Original message
4. Self interest in the basis of capitalism, especially banking, which is why it needs to be regulated
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 08:54 AM
Response to Original message
5. We should demand our money back and let those morons fail.
ARGH.
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rocktivity Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 09:11 AM
Response to Original message
6. Candidate for this month's "You Call This NEWS?" Award
That was the plan all along--the looting of the treasury is complete. I hope the first thing Obama's new Congress does is enact laws to get that money back.

:headbang:
rocknation
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lligrd Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 11:34 AM
Response to Original message
7. Banks Admit Bailout Won't Work
Source: Clusterstock.com

So much for that story. A few days ago, when Hank Paulson called the heads of the nine families to Washington and shoved cash down their throats, he announced that the banks would use this new taxpayer cash to lend. They won't, of course. They'll hoard it like a starving family who has just been given a grocery cart full of food.

And after a few days of silence, even the banks are finally admitting that. So it's back to the drawing board for Paulson & Co.

Next steps? Find a way to force the banks to write their assets down to nuclear winter levels, so 1) private investors don't have to worry about getting sandbagged and therefore invest more in the banks, and 2) the banks know they won't be forced to take more multi-billion dollar losses. Only then will the banks begin to lend again. And at that point, the only challenge will be finding people and companies to lend to, in an economy headed straight into the tank.)

NYT: , John Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.



Read more: http://finance.yahoo.com/tech-ticker/article/97314/Bank...
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Poll_Blind Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 11:34 AM
Response to Reply #7
8. Thanks for giving me money for the rehab clinic. I blew it on coke- it wasn't going to work anyway.
PB
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Doctor_J Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-17-08 12:04 PM
Response to Reply #7
9. Krugman said two weeks ago that there will be another one before
Inauguration Day.
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