ST Alpha - "So far, US banks have gotten $163 billion from US taxpayers. Over the next 3 years, guess where half of that is going?" (Reading a Post)

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So far, US banks have gotten $163 billion from US taxpayers. Over the next 3 years, guess where half of that is going?

Posted by Brian (aka trav007) Oct 30 '08, 06:47

If you said dividends to shareholders, you're right!

Banks to Continue Paying Dividends
Bailout Money Is for Lending, Critics Say

By Binyamin Appelbaum
Washington Post Staff Writer
Thursday, October 30, 2008; Page A01

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

The government said it was giving banks more money so they could make more loans. Dollars paid to shareholders don't serve that purpose, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program.

Critics, including economists and members of Congress, question why banks should get government money if they already have enough money to pay dividends -- or conversely, why banks that need government money are still spending so much on dividends.

"The whole purpose of the program is to increase lending and inject capital into Main Street. If the money is used for dividends, it defeats the purpose of the program," said Sen. Charles E. Schumer (D-N.Y.), who has called for the government to require a suspension of dividend payments.

Seriously, what the hell (www.washingtonpost.com)

Responses:

and the other half is going to be used to buy other banks. -- nm - znufrii Oct 30, 06:56 1
- Sheer elegance in its simplicity. What could possibly go wrong? -- nm - Beryllium McGee Oct 30, 06:58
i was going to say "not me" which is also right. -- nm - secretslacker Oct 30, 06:51
why should shareholders suffer because of policies pushed on them by the gov't? -- nm - colin Oct 30, 06:50 33
- why should banks take handouts from the government if they have the excess cash to pay a dividend? - ken kutarugi Oct 30, 06:57 2
  - Ken! Did yuu see Sony's earnings report ? Reflects some stellar manangement there :) -- nm - decline Oct 30, 07:03
  - This sounds strangely rational for Kenny K -- nm - Beryllium McGee Oct 30, 06:59
- They don't need to participate; this goes for both the investors in the bank and the banks themselves. - Will Hunting Oct 30, 06:52 9
  - shareholders aren't making money, or are losing money, and they'll start selling off... seems like that would be bad for the bank. -- nm - colin Oct 30, 06:53 8
    - If you ask for a handout to stay afloat, I'm thinking maybe your stock price is a secondary concern. - Will Hunting Oct 30, 06:55 2
      - it's like saying this "i'm going to lose everything if you don't lend me $1000", so your friend lends you a $1000. - Halloween Candie Oct 30, 06:57
      - almost? -- nm - znufrii Oct 30, 06:56
    - i really can't believe you are okay with your tax dollars going to someone else's pocket as, essentially, revenue. -- nm - Halloween Candie Oct 30, 06:54 2
      - Seriously. Dividends are meant to be distributed when the business is doing well, not when it's scrambling to blow pols for handouts. -- nm - Beryllium McGee Oct 30, 06:55 1
        
        exactly. there should be zero obligation to pay a dividend when times are bad.... - x Oct 30, 07:00
    - Shareholders would sell off, or lose all of their investment, if the banks fail. - ty97 Oct 30, 06:54
    - ... bank needs money, bank gets money, bank gives money away? How does it make sense? -- nm - Beryllium McGee Oct 30, 06:54
- why should the shareholders be paid by the us government. -- nm - tRuMaN Oct 30, 06:51 18
  - it's all money..just because shareholders are now being paid, does that mean its out of the money given to the banks? -- nm - colin Oct 30, 06:55 17
    - Dividends should only be paid when the business is doing well. That's what dividends *ARE*. -- nm - Beryllium McGee Oct 30, 06:56 16
      - exactly. you get paid dividends on your *investment*. like any other investment, if the company you invested in does poorly, you can lose your - Halloween Candie Oct 30, 06:59 15
        
        it wouldn't have done poorly if the gov't hadn't mandated crap lending rules. -- nm - colin Oct 30, 07:03 14
        
        kidding, right? -- nm - slutty zombie loosilu Oct 30, 07:11
        
        This isn't the "blame the Community Reinvestment Act of 1977 and Fannie and Freddie" argument, is it? - Brian Oct 30, 07:08
        
        Shockingly, there are banks who aren't going bankrupt becuase they didn't rush forward to the highest limits the govt allowed. - Will Hunting Oct 30, 07:05
        
        um, no that is totally wrong. It was a lack of regulation and the greed of the banks that caused the problem -- nm - decline Oct 30, 07:05
        
        honestly, i'm not sure you really have a good grasp of the landscape on this stuff...nm, - x Oct 30, 07:05 9
        
        no, i really don't. - colin Oct 30, 07:07 8
        
        Well then, why don't you just argue with Loosi so she'll leave Jim the hell alone. It's pretty obvious she's spoiling for a fight today and you could - Trish Oct 30, 07:16 2
        
        loosi! let's go! - colin Oct 30, 07:17
        
        um, good morning. -- nm - slutty zombie loosilu Oct 30, 07:17
        
        ah, arguing from a position of ignorance. remind me not to waste time listening to anything you say..nm - x Oct 30, 07:13 4
        
        it got some good conversation going. - colin Oct 30, 07:15 3
        
        not my idea of good. -- nm - slutty zombie loosilu Oct 30, 07:18 1
        
        i enjoyed it. -- nm - colin Oct 30, 07:22
        
        i just think people who argue without some sense of what they're talking about are idiots who waste my time....nm - x Oct 30, 07:17
- you're joking, right? - Halloween Candie Oct 30, 06:51
that should be illegal. -- nm - Halloween Candie Oct 30, 06:50
Immediately after the election, Congress needs to pass a new law forbidding this -- nm - ty97 Oct 30, 06:48 2
- ha -- nm - Don Homer Oct 30, 06:49
- *counts the number of democrats in congress* I'm not sure if "immediate" is a word you can throw around these days ... -- nm - Beryllium McGee Oct 30, 06:49
I could have sworn that congress had said that it couldnt be used for dividends. or maybe they were talking about doing something to that end. -- nm - tRuMaN Oct 30, 06:48 3
- they were considering it, but the banks said they would not participate if they had to suspend dividends -- nm - decline Oct 30, 06:53 2
  - We will go bankrupt or carry on as usual!!! No middle ground. - Epiphany Oct 30, 07:02
  - i had read one financial blogger who said he read in the fine print of the agreement that this could not be done. but i guess he was wrong?....nm - x Oct 30, 07:02

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So far, US banks have gotten $163 billion from US taxpayers. Over the next 3 years, guess where half of that is going?

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