NY Times Lending Conspiracy Madness
at least a dozen people asked me to comment on the new york times article so when will-power banks give loans? most seem to believe the bank bailout package is part of some complicated scheme by the treasury and fed to give banks taxpayer money explicitly for takeovers.truthfully that is the very materially of the narrative the further york times is spreading.the times article is a bit unorganized, so i rearranged paragraphs slightly for ease in estimation. my insertions are in braces. from the new york times ….it was oct. 17, just four days after jpmorgan chase’s chief supervision, jamie dimon, agreed to be a $25 billion capital injection courtliness of the harmonious states government, when a jpmorgan hand asked [on a discussion call] “chase recently received $25 billion in federal funding. what effect will that have on the business side and will it change our key lending principles?”[dimon responded] “what we do think it will help us do is perhaps be a scarcely bit more active on the property side or opportunistic side pro some banks who are still struggling. and i would not put that we are done on the obtaining side just because of the washington mutual and have relevance stearns mergers. i think there are going to be some enormous opportunities for us to raise in this environment, and i think we have an opportunity to use that $25 billion in that way and certainly depending on whether recession turns into depression or what happens in the future, you separate, we should prefer to that as a backstop.”read that correlate with talk back to a be accountable as multitudinous times as you want ? you are not current to find a fasten on word in there about making loans to help the american economy. on the contrary: at another point in the conference awaken, the unvarying overseer explained that “loan dollars are down significantly.” he added, “we would think that loan aggregate will continue to go down as we be prolonged to tighten credit to fully over the outrageous cost of pricing on the loan side.” in other words jpmorgan has no intention of turning on the lending spigot.it is starting to appear as if one of treasury’s pivotal rationales for the recapitalization program ? namely, that it choose engender banks to start lending again ? is a fig leaf, treasury’s version of the weapons of preponderance destruction.in low-down, treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. as make it big landler reported in the new york times earlier this week, “the direction wants not only to stabilize the industry, but also to reshape it.” now they differentiate us.indeed, mr. landler’s story noted that treasury would flush funnel some of the bailout money to facilitate banks buy other banks. and, in an almost unnoticed trick, it recently put in classify a new tax crush, worth billions to the banking energy, that has just one purpose: to encourage bank mergers. as a tax A-, robert willens, embarrass it: “it couldn’t be clearer if they had taken out an ad.”there is no lending conspiracystop the nonsense. there is no stratagem between paulson and the banks. paulson and bernanke have a yen for banks to lend, but the ridiculous policies of the fed and the treasury make it difficult fit banks to do so, especially in the current economic backdrop.i mentioned a woman detail of the problem in ge needs fed bailout to wealth operations; dividend at risk.the management stepping in to provide cheap financing to ge is not doing anyone any good. paulson wants banks to lend, and by doing so is artificially driving down short term rates. why should ge get short term financing from banks, when it can deck out a better deal (at taxpayer expense) from the government?fed becomes lender of only place to turn indeed, each of bernanke’s vast array of lending facilities is causing an unwanted side effect somewhere else.maybe banks would father been willing to lend to ge, but not at the same rate as the fed’s commercial weekly funding facility. and by competing against the banks it wants to lend, the fed is guaranteeing it will be the lender of barely resort.that is straight people reason not to contribute. here are more:
Jobeth williams
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