Have you heard about the possible bailouts that
government is doing to help financial banks and markets to recover?
I bet you did, but how can you get that loan you need.
In short, you can't. But wait, didn't banks receive
$25 billion? Yep, they did, but not to lend!
Christmas came early for some banks with government
infusion. What banks are doing is to buy out smaller banks. It is
easier to use government money right now to use that money for
something else that loan which cannot be resold to Wall Street.
With approaching global recession banks are staying
away from lending. They are simply sitting on the $25 billion loans
and doing nothing.
The Treasury wants banks to acquire each other as they
want not to only stabilize the industry, but to reshape it as well.
If banks are buying each other, where are the money to make loans?
Treasury is adding more and more money to further encourage banks to
buy each other and it put tax breaks, worth billions, to banking
industry with one purpose, to encourage bank mergers.
To evidence this, PNC announced purchase of National
City, while JP Morgan got Washington Mutual.
With government infusion banks just received money,
but there are no guidelines as what percentage can be used to make
new loans. Government is hoping that banks will start to lend again.
And they are not doing anything.
Banks did not fix what they supposed to. Treasury is
using bailout money to turn banking system into profit for the
Treasury. Not American people so they can get loans. Those banks
that were given $25 billion loans were selected by Treasury and
encouraged to buy our smaller banks. Apparently those big banks,
such as Citigroup, J.P. Morgan and others.
Big banks never needed that $25 billion bailout money.
Those banks were sitting on a pile of cash, just not lending.
With money companies struggling and need of capital,
which is not available, banks rather put their money
elsewhere. Someone was not looking to help consumers, but
rather to enrich themselves.
Equal Housing Opportunity
(c) Copyright 2008 RateTake.com