Banks Who Don't Need Bail Out Money are the Ones Getting It

The Chosen Ones. I flipped on the local news late last night and saw a local bank CEO announce they have received millions of money from the bail out even though they don't need it. Images and drawings trying to explain how giving taxpayer money to some of the most consumer unfriendly banks would help the taxpayer abounded from the infomercial newscast. Arrows and redirects flooded a white board where one could have written corporate public relations B.S. clip in it's place. Paulson is helping the worse bank in Oregon, notorious for old growth timber clear cutting. The CEO said he would probably use the money for acquisitions, consolidation.

The peddled to the American people claim was these banks get more money to make more loans, yet the reality is no one is addressing a now 1% Fed Rate yet credit cards still charge 20% interest and predatory loans abound. Even more interesting, it appears mergers and acquisitions are more what banks are doing with the money.

So why is Paulson picking banks that do not need the money and handing them our taxpayer funds? Is the Treasury now in the institutional investor business? How exactly is this pick and choose, which is leading to even larger too big to fail institutions?

From U.S. Treasury Program Shuns Banks That Need Cash Most

The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say

The reason these banks who do not need the money are taking the deal?

Some lenders say the deal was too good to refuse. The preferred shares that banks are selling to the U.S. Treasury yield 5 percent annually for the first five years before increasing to 9 percent.

``The program is so attractive that even though we have a fairly strong capital ratio, we just felt that it was an opportunity to get capital at a very attractive rate,'' said Roy Painter, chief financial officer at Saigon National, based in the Orange County, California, community of Westminster. ``We're a small organization, we expect to grow, and we'll need the additional capital down the road.''

Now, after shoving through a $850 billion dollar bail out and being Paulson's cheerleaders, Congress is now writing letters to Paulson about the bail out money being used for executive bonuses, mergers and acqusitions. A few others are now asking for investigations of steering funds for acquisitions. Gee wiz, if they are that upset about it, one would think they would not have crammed through carte blanche to Paulson in the first place.

Who's minding the store? Seems like no one.

Meta: 

Comments

That is correct...

...the 'no one...' you refer to does have a name however. It's the Democrat Party Leader$hip.

Pelosi...

Hoyer...

Emmanuel...

Feinstein...

Boxer...

and all the rest. Just had my usual bs exchange with the salesguys at the lumberyard I patronize...known these Republican Evangelicals for 20 years....

They wanted to get all over the 'The Dems are the same as the Repugs.....' meme.

Told 'em. Hey, you guys voted for BushCo. twice...what are yer whinin' about. You got what you asked for. Right?

Then I had to explain to them that just because someone says they are a 'Democrat' and even campaigns as one....

Does not make it so.

Then they wanted to know when they'd be getting their checks from Obama...you know 'redistribute the wealth....' I laughed and told 'em, 'Socialism don't work that way pals.'

Key to this is that they no longer believe in the Republican Party. They don't like Obama but they really don't want no part of McSame.

Poor babies.....

They might have to think for themselves for a change.

You must have Javascript enabled to use this form.

'When you see a rattlesnake poised to strike, you do not wait until he has struck to crush him.'

I'm shocked!

Shocked, I say. It's unbelievable that Congress would have screwed up a trillion dollar giveaway to a bunch of thieves on Wall Street.

Oh, wait. No I'm not. Anyone with half a brain could have predicted that would happen.

You must have Javascript enabled to use this form.

bush first term, tax brakes and higher tax returns 4 usa family

he was not listening, president bush did support the average working middle class family of america. at the beginning of his first term as president before september 9, 2001 our current president gave the marrage tax brake and also gave tax payers higher returns.

You must have Javascript enabled to use this form.

Which failed to touch

Just about every family making UNDER $36,000/year.

In other words, just like with every other Bush tax break, this missed the target of helping those who most needed it.

You must have Javascript enabled to use this form.

-------------------------------------
Maximum jobs, not maximum profits.

Bush is unconcerned with such....

....dirt poor losers. Calvinists unite! The facinating thing about this is that the working class and the middle class have been, at least the 'independent' segments thereof, down on their knees offering up their throats to be cut since the advent of Nixon...

Of course if you read 'John Adams' you will see that this sort of idiocy has been in fashion since the very beginning of our 'republic'. And that, indeed, Republicans have been using this self-destructive wrinkle in the human brain to achieve ever increasing power and wealth over everyone else since the very beginning.

The only question now is...

Will The Anointed One take action or...

Is the great American experiment over?

I rather think if The Precious does not take real action that the second Civil War will begin.

And once again it will be about slavery. Dept slavery this time. Yep, you won't have to be black.

Anyone can qualify.

And yes, Homer, they were called 'Republican's then also.

You must have Javascript enabled to use this form.

'When you see a rattlesnake poised to strike, you do not wait until he has struck to crush him.'

I am a 46yr old female

I am a 46yr old female raising my daughter solo and am a registered nurse. Currently I make about 24,000$ working part time and am also going to school full time. A guy who works for Bank of America told me that they had just received 25 BILLION(not million)dollars in bailout money that they didn't even need. I had just been turned down for a 10,000$ loan to pay off a debt.I'm not asking for a home loan(too expensive) or gormet chef, or private jet, etc. I am asking to be able to pay my bills, feed and cloth my child, and keep a roof over our heads. If I could just have back the money I paid in taxes last year I could spend it on these basic essentials and have some to save for my child for college. Where is my portion? Why did the government take food out of my child's mouth and give it to CEO's of banks with multiple homes, gormet chefs, exotic vacations and million dollar salaries. Why? What did I do? I worked very hard at an honest job taking care of sick people, paid taxes, and THAT'S who's entitled to 25 billion dollars? No wonder the people of France finally told those royals feasting while they starved enough is enough! I've never seen in my life time such unjustified dispersion of hard earned American's money. Do we have a voice anymore? When Bank of America was bribing(oh excuse me, I mean lobbying) congress for the taxpayers to bail them out, who was speaking for me, the American people who have bonified needs?

You must have Javascript enabled to use this form.

Welcome to EP 46 yr old F

We don't have the bribes to get more money.

I think women, middle aged are especially getting the shaft on multiple fronts and there are only a few things I know to do. I try to post studies, stories that are particularly outrageous when I find them but I sense that women generally on economic justice are now well organized. There should probably be a "anyone over 35" lobby as well since age discrimination is now institutionalized.

1. organize
2. speak up, the blogs are a great place to do that
3. personally lobby your representatives, call them, go to their offices

You must have Javascript enabled to use this form.

Exactly my point

Hopefully it will be slightly better under Obama- but somehow I doubt it.

OTOH- have you considered moving the the Pacific NW? Registered nurses are in shortage here, you'd earn about $10k more per year on average.

You must have Javascript enabled to use this form.

-------------------------------------
Maximum jobs, not maximum profits.

bailout

I agree with you and hope that there is someone out there that will listen and try to do the right thing instead of always looking out only for themselves. Bank of America has always charged more and pays less interest than the other banks. I do not know why they would even have the right to any of the money.

The unions have broke the Companies and if yo want to look up Kaiser Steel in Fontana CA you will find they started the process in the 80's. My uncle was vice precident of the union. The union got 16 week vacations for their employees every so many years plus regular vacations. When the company could no longer fight the union they went bankrupt. Check the wages and the benifits of the labor cost and government requirements for the car dealers. I guess people just forget and think it will never happen to them. I will never go for a bailout. They need to file chapter 11 and reorganize. I only hope as a retired person that while some fireman retire at over 100 percent of their wages, some teachers at 85% of their wages and if disabled at 50% tax free that our money will not run out before my husband and I die. There are many more cases of this there are few that know about this. Again everyone has their union working for them. How long before they break the bank?

You must have Javascript enabled to use this form.

you're drinking the kool-aid

Unions are the only force left creating a middle class and they are not the cause of what is happening today. Case in point when the US was the strongest, unions were also the strongest, 1950's.

You must have Javascript enabled to use this form.

Actually, less than 12%

Have a union working for them. To me, that's part of the problem- if everybody had a union working for them, then prices would balance to pay for it.

You must have Javascript enabled to use this form.

-------------------------------------
Maximum jobs, not maximum profits.

unions

have been trashed through the mud and in some cases, considering how absurdly bureaucratic K12 is, I can understand it but in most cases, they are the last stand against total middle class wipe out.

What's the percentage of professional occupations unionized? White collar, professional careers areas have been under major attack and I think this is part there is no unionization, countervailing forces to fight back.

You must have Javascript enabled to use this form.

Dear Congress, Spare Me the Indignation

Over on CBS Market Watch is a commentary just blasting Congress for now having outrage over the bail out money when they ignored an opportunity to limit the bail out and define the terms.

I'm pretty encouraged to see more and more real talk on major financial sites.

You must have Javascript enabled to use this form.

The emerging CW seems to be that....

....wait for it....yep, you guessed it.

Nothing can be done.

You see no matter who get's elected the MSM is braying that, 'their options are limited...' and 'both candidates would find themselves restricted in what they could do...'.

Yep, Bush the Idiot can sink us in an endless occupation of Iraq but he, McSame and The Precious are helpless against the terrorists of Wall Street.

Interestingly as I was eating a sandwich at my local bar the guys next to me were waxing heatedly about how stupid the 'bailout' is because it doesn't require banks to loan out the money the G is giving them.

Gee...ya think?

The time is approaching when the ruling elite and their moronic bloviators in the MSM are going to find out that the people just are not so into them and then...

Look out.

There is a real political path to power in this country that no one is taking. It's been called 'populism' in the past and I predict that when it lifts it's head again it that head will resemble a T-Rex with gaping jaws fit to rend and tear more than anything else.

The entire 'Leader$hip' of this nation is corrupt. Rotten to the core. Their sagging bellies dragging on the ground and still they stuff their maws with the productivity gains which rightfully belong to the people that created them.

History shows us that such cannot last indefinitely. I'd say 40 years of Greenspanian stupidity coupled with Bushian greed and cupidity are...

Just about enough.

You must have Javascript enabled to use this form.

'When you see a rattlesnake poised to strike, you do not wait until he has struck to crush him.'