NY Times: "Some Banks, Citing Strings, Want to Return Federal AidBack to Article"

[b0mbrman]

The story is here

"The list of demands keeps getting longer.

Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens.

As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.

The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering...."

Hm...I suppose the visceral reaction would be to say something like, "Good riddance! If they can't live up to the strings, then they didn't really need the money!"

But, then I think that they're making the decision based on profit/loss, and have calculated that they'd lose more money by conforming to the rules than they would gain with added capital.

If you believe that protecting the credit market is important, we -- taxpayers and consumers who have to live within the economy these banks affect -- want them to take the money to recapitalize the markets in order to get some credit velocity going...

The article only gives two examples [Edit] of giant banks [/Edit], so I doubt this is prevalent at all...but if it started happening more, would the next step be for the Administration/Congress to unpopularly loosen the restrictions?

 

[K1052]

A number of banks have come forward wanting to repay their TARP loans.

The Treasury doesn't want the money back out of fear of stigmatizing banks that cannot repay and precipitating their collapse so they made it basically impossible to just give the money back.

Though some of the mismanaged banks/investment houses and their executives deserve getting called on the carpet for being horrendously greedy and irresponsible.

 

[miketheidiot]

C. R. Cloutier, the president of MidSouth Bank of Lafayette, La., and a survivor of the savings and loan debacle, said that his institution received $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession.

stupidest person in that article

 

[Thump553]

Originally posted by: miketheidiot

C. R. Cloutier, the president of MidSouth Bank of Lafayette, La., and a survivor of the savings and loan debacle, said that his institution received $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession.

stupidest person in that article

Explain why you think that's stupid, it makes perfect sense to me. The bank's capital is increased by $20M overnight, thus bumping up their lending capacity.

 

[b0mbrman]

Originally posted by: miketheidiot

C. R. Cloutier, the president of MidSouth Bank of Lafayette, La., and a survivor of the savings and loan debacle, said that his institution received $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession.

stupidest person in that article

Because he got a low-interest $20 million loan?

Also, he doesn't really have to believe that to say it out loud...

 

[b0mbrman]

Originally posted by: Thump553

Originally posted by: miketheidiot

C. R. Cloutier, the president of MidSouth Bank of Lafayette, La., and a survivor of the savings and loan debacle, said that his institution received $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession.

stupidest person in that article

Explain why you think that's stupid, it makes perfect sense to me. The bank's capital is increased by $20M overnight, thus bumping up their lending capacity.

Exactly.

 

[sandorski]

It seems to me they are more worried about padding the Top Executives than anything else. Take that ability away and suddenly they don't want the Bailout Funds anymore. Temporary Nationalization becomes increasingly attractive. A house cleaning is needed at the Top and it seems the Top wants nothing of it. So having the Top clean itself is an exercise in futility.

 

[b0mbrman]

Originally posted by: sandorski
It seems to me they are more worried about padding the Top Executives than anything else. Take that ability away and suddenly they don't want the Bailout Funds anymore. Temporary Nationalization becomes increasingly attractive. A house cleaning is needed at the Top and it seems the Top wants nothing of it. So having the Top clean itself is an exercise in futility.

Nationalization only sounds like a good idea if you really, really, really trust the government to make good decisions...

 

[3chordcharlie]

Originally posted by: b0mbrman

Originally posted by: sandorski
It seems to me they are more worried about padding the Top Executives than anything else. Take that ability away and suddenly they don't want the Bailout Funds anymore. Temporary Nationalization becomes increasingly attractive. A house cleaning is needed at the Top and it seems the Top wants nothing of it. So having the Top clean itself is an exercise in futility.

Nationalization only sounds like a good idea if you really, really, really trust the government to make good decisions...

Actually, you only have to trust them just a little more than the corporations who have been running things, which sadly is getting easier all the time.

 

[theeedude]

Why don't we just nationalize one bank. Then the government can offer cheap credit through that bank like it does through Fannie and Freddie. That way the government can effectively set interest rates at consumer level, instead of going through all these middlemen, and we can let remaining banks sink or swim without risking availability of credit at consumer level, since the nationalized bank can pick up the slack.

 

[OCGuy]

Originally posted by: senseamp
Why don't we just nationalize one bank. Then the government can offer cheap credit through that bank like it does through Fannie and Freddie. That way the government can effectively set interest rates at consumer level, instead of going through all these middlemen, and we can let remaining banks sink or swim without risking availability of credit at consumer level, since the nationalized bank can pick up the slack.

Because we arent leftist?

 

[theeedude]

Originally posted by: Ocguy31

Originally posted by: senseamp
Why don't we just nationalize one bank. Then the government can offer cheap credit through that bank like it does through Fannie and Freddie. That way the government can effectively set interest rates at consumer level, instead of going through all these middlemen, and we can let remaining banks sink or swim without risking availability of credit at consumer level, since the nationalized bank can pick up the slack.

Because we arent leftist?

That's just a laughable argument since we are already handing out trillions to banks. This will just cut out the middle men.
Instead we are going to hand out trillions to failed banks hoping that maybe, once they are done filling their black hole balance sheets and paying out huge bonuses to themselves for offloading this garbage on the taxpayer, they will eventually decide to make a few loans to the consumer.

 

[cubby1223]

Originally posted by: senseamp
Why don't we just nationalize one bank. Then the government can offer cheap credit through that bank like it does through Fannie and Freddie. That way the government can effectively set interest rates at consumer level, instead of going through all these middlemen, and we can let remaining banks sink or swim without risking availability of credit at consumer level, since the nationalized bank can pick up the slack.

So Chris Dodd can get an even sweeter mortgage deal for himself, and for his political allies, while everyone else gets screwed?

Those who don't study history are doomed to repeat it:
http://en.wikipedia.org/wiki/F...k_of_the_United_States

 

[OCGuy]

Originally posted by: senseamp

Originally posted by: Ocguy31

Originally posted by: senseamp
Why don't we just nationalize one bank. Then the government can offer cheap credit through that bank like it does through Fannie and Freddie. That way the government can effectively set interest rates at consumer level, instead of going through all these middlemen, and we can let remaining banks sink or swim without risking availability of credit at consumer level, since the nationalized bank can pick up the slack.

Because we arent leftist?

That's just a laughable argument since we are already handing out trillions to banks. This will just cut out the middle men.
Instead we are going to hand out trillions to failed banks hoping that maybe, once they are done filling their black hole balance sheets and paying out huge bonuses to themselves for offloading this garbage on the taxpayer, they will eventually decide to make a few loans to the consumer.

Eh sadly you are correct. We have taken a hard-left without the general public even realizing it.


Let the banks give the money back, and let them die if they cant turn a profit. That is our only way out of this.

 

[First]

Originally posted by: Ocguy31



Let the banks give the money back, and let them die if they cant turn a profit. That is our only way out of this.

Sure, if you don't understand basic finance and mathematics.

 

[OCGuy]

Originally posted by: Evan

Originally posted by: Ocguy31



Let the banks give the money back, and let them die if they cant turn a profit. That is our only way out of this.

Sure, if you don't understand basic finance and mathematics.

This should be good.


Please explain to me how continuing to funnel borrowed money into banks that cannot get into the black, and will fail as soon as we take them off the teet of government cheese anyway, will benefit this country.

Be sure and use basic finance and mathematics.

 

[chess9]

Originally posted by: b0mbrman

Originally posted by: miketheidiot

C. R. Cloutier, the president of MidSouth Bank of Lafayette, La., and a survivor of the savings and loan debacle, said that his institution received $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession.

stupidest person in that article

Because he got a low-interest $20 million loan?

Also, he doesn't really have to believe that to say it out loud...

The TARP 1 loans were at 5% weren't they? Not real low, but for that size of a loan, not bad. Now, TALF loans were at LIBOR (one year?) plus 200 bp, I think. Those were pretty good! GE got some of that TALF money, which is one reason their stock had a slight uptick.

-Robert

 

[ponyo]

If they want to give it back, do it. Don't keep telling us. DO IT. Some of the tiny banks maybe didn't need the money. All the big banks did including Chase, Wells, BAC, Goldman even though they will lie to you saying they didn't. Every time Goldman and Wells Fargo tell their bullshit lie about how they didn't need the money and they want to return it, I want to short their stock. Anyone remember Goldman saying "Our exposure to AIG is not material" when in fact Goldman was AIG's biggest trading partner and had $20 billion in counterparty risk. Goldman has received $18.5 billion of the AIG bailout money so far. If AIG had gone under, Goldman would've been 100% toast. Goldman was the reason former GS alums Paulson and Geitner saved AIG. You can't trust these lying banker snakes.

I find it funny how these banks have no problem changing the terms and adding strings on retail borrowers on credit cards and other banking products after getting them hooked and now are complaining when the govt does the same to them. Banks should practice what they preach, "If you don't like it, pay your balance in full and close the account."

 

[First]

Originally posted by: Ocguy31

This should be good.


Please explain to me how continuing to funnel borrowed money into banks that cannot get into the black, and will fail as soon as we take them off the teet of government cheese anyway, will benefit this country.

Be sure and use basic finance and mathematics.

Your assumption that financial institutions that have been bailed out cannot get back into the black and will go down without gov't "teet" is entirely based in the reality that exists only in your head. We've already seen Citi go black this past quarter, for one, and secondly there's no reason a lot of these mortgage securities can't be resold for better value at higher mark to market when the economy starts recovering, at which point a permanent gov't presence isn't at all necessary. Try to argue that if you can (you won't).

Of course, the bottom line is that not bailing these guys out, particularly AIG, ends up causing far worse havoc. Dissolving the billions upon billions of AIG-insured securities at home and abroad by allowing AIG to go under would lead to all sorts of obvious problems for the firms that paid to have those securities insured (possible bankruptcies and layoffs for countless other firms, as just two obvious examples). The fact that Lehman going under was an even worse disaster than originally thought should be more than enough evidence even for someone as brain dead as yourself.

 

[OCGuy]

Originally posted by: Evan

Originally posted by: Ocguy31

This should be good.


Please explain to me how continuing to funnel borrowed money into banks that cannot get into the black, and will fail as soon as we take them off the teet of government cheese anyway, will benefit this country.

Be sure and use basic finance and mathematics.

Your assumption that financial institutions that have been bailed out cannot get back into the black and will go down without gov't "teet" is entirely based in the reality that exists only in your head. We've already seen Citi go black this past quarter, for one, and secondly there's no reason a lot of these mortgage securities can't be resold for better value at higher mark to market when the economy starts recovering, at which point a permanent gov't presence isn't at all necessary. Try to argue that if you can (you won't).

Of course, the bottom line is that not bailing these guys out, particularly AIG, ends up causing far worse havoc. Dissolving the billions upon billions of AIG-insured securities at home and abroad by allowing AIG to go under would lead to all sorts of obvious problems for the firms that paid to have those securities insured (possible bankruptcies and layoffs for countless other firms, as just two obvious examples). The fact that Lehman going under was an even worse disaster than originally thought should be more than enough evidence even for someone as brain dead as yourself.

LOL. You are assuming you already know the outcome of all of this borrowed Chinese money. How do you know what the long-term ramifications are? You dont.

Wait until nobody buys our debt anymore. You will see what "havoc" looks like.

 

[First]

Originally posted by: Ocguy31

LOL. You are assuming you already know the outcome of all of this borrowed Chinese money. How do you know what the long-term ramifications are? You dont.

And what are the long-term consequences that you've postulated? You don't have the first clue. Or are you one of those loons that thinks China dumping T-bills on the open market over time is a disastrous occurrence? China has no incentive to dump all of them immediately, they want to maximize the earnings on the money they loaned us.

I also find it more than a little sad that you think these bailouts are all or even mostly coming from China, as if the debt financing decisions have already been made.

Wait until nobody buys our debt anymore. You will see what "havoc" looks like.

Yeah, let me know when that happens, rofl.

Nice wimp out on the debate btw. You guys are too predictable.

 

[sandorski]

Originally posted by: b0mbrman

Originally posted by: sandorski
It seems to me they are more worried about padding the Top Executives than anything else. Take that ability away and suddenly they don't want the Bailout Funds anymore. Temporary Nationalization becomes increasingly attractive. A house cleaning is needed at the Top and it seems the Top wants nothing of it. So having the Top clean itself is an exercise in futility.

Nationalization only sounds like a good idea if you really, really, really trust the government to make good decisions...

The Government really doesn't need to do much. Investigate the Financial condition of the Corp, give it the Cash needed to Rebuild, hire a capable group from the Private Sector to get it back to Profitability. A few other things can be implemented, like suspending current Executive Contracts, but essentially the Government would not meddle with Day-to-day workings.

 

[First]

^ AIG is partially nationalized anyway, but the admin has been pretty firm on not doing so. Which would make sense if they're successfully able to reasonably resell those billions in assets eventually.

 

[Fern]

Originally posted by: Naustica
If they want to give it back, do it. Don't keep telling us. DO IT.
-snip-

They can't without permission (at this time).

IIRC, no pay backs before sometime in 2010 unless you receive permission.

All of these 'banks wanna payback' articles I've seen so far are instances of where banks requesting taht permission.

Kind of like a "no prepayment of loan' clause we used to see at one time.

Fern

 

[b0mbrman]

Originally posted by: Evan

Originally posted by: Ocguy31

This should be good.


Please explain to me how continuing to funnel borrowed money into banks that cannot get into the black, and will fail as soon as we take them off the teet of government cheese anyway, will benefit this country.

Be sure and use basic finance and mathematics.

Your assumption that financial institutions that have been bailed out cannot get back into the black and will go down without gov't "teet" is entirely based in the reality that exists only in your head. We've already seen Citi go black this past quarter, for one, and secondly there's no reason a lot of these mortgage securities can't be resold for better value at higher mark to market when the economy starts recovering, at which point a permanent gov't presence isn't at all necessary. Try to argue that if you can (you won't).

Can they be re-sold for more later on (Assuming mark-to-market stays in place)?

[Edit] I suppose if something is un-naturally propping up mortgages and by extension MBSs (HASP? HFSH Act?), then maybe for a while...but the bubble would eventually bring those prices back down to Earth, right?