You know that tax money that the US gave to banks so they would start making loans again? They aren't doing that
Posted by
Brian (aka trav007)
Oct 22 '08, 06:43
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Instead, they're going on a M&A spree with it.
Banks Weighing Other Uses for Bailout Money
Some May Put It Toward Acquisitions
By Peter Whoriskey and Zachary A. Goldfarb
Washington Post Staff Writers
Wednesday, October 22, 2008; Page D01
Several major U.S. banks are leaning toward spending a portion of their federal rescue money on acquiring other financial firms rather than for issuing new loans, the primary purpose of the government's $250 billion initiative to invest in banks.
J.P. Morgan Chase, BB&T, and Zions Bancorporation have all said in recent days that they are considering using some of their federal money to buy other banks.
About 10 financial institutions belonging to the Financial Services Roundtable, which represents 100 of the nation's largest financial services firms, are also considering making acquisitions with the money, said Scott Talbott, the group's senior vice president.
There is a growing consensus among Treasury and other federal officials that allowing healthy banks to use the money to acquire banks in jeopardy of failing could stabilize the economy and bolster confidence in banks. This could also save money for the Federal Deposit Insurance Corp.
Treasury Secretary Henry M. Paulson Jr. confirmed yesterday that some banks may use the capital they receive through the Treasury program to buy weaker banks and that this could benefit the financial system.
In an appearance on "Charlie Rose," Paulson said acquisitions were "not the driver behind this program. The driver is to have our . . . healthy banks be well-capitalized so they can play the role they need to play for our country right now." He added, "There will be some situations where it's best for the economy and for the banking system for there to be a consolidation."
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Responses:
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this is why I though the gov should have required a representative to be on the boards of the bailedout banks. -- nm
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tRuMaN
Oct 22, 06:56
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I'm not sure this is an entirely bad thing in the short term. -- nm
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znufrii
Oct 22, 06:54
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If they buy other banks, then they get *their* bailout money as well.
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JaxSean
Oct 22, 06:53
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yeah, well if you give out money with no strings attached, you can't really complain about what people do with it. -- nm
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mafic
Oct 22, 06:51
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Isn't the problem more about capital than it is about loans? At least that's what I read from people above my pay grade -- nm
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kilboooo
Oct 22, 06:49
1
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Let's re-enact the storming of the Bastille, just with their corporate headquarters...anyone have a guillotine handy? -- nm
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The Calico Cat Coalition
Oct 22, 06:49
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posted below ... looks like they were executed at the penitentiary (here) not the court. -- nm
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loosilu in the nook in the attic
Oct 22, 06:48
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yep, and others (namely Merrill) have said they are going to just sit on it for at least a quarter to shore up their numbers -- nm
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secretstalker si
Oct 22, 06:45
1
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I'm going to beat someone -- nm
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ty97
Oct 22, 06:44
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