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Thread: Bank Bail-Out Backfiring

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    Banned Eric Stoner's Avatar
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    Default Bank Bail-Out Backfiring

    Many banks including a lot of the "biggies" are desperately trying to pay back the TARP money they took asap. Some smaller banks already have. Some are being held up because the taxpayers own warrants for their stock.

    If the purpose of the TARP was to prevent a banking collapse and if many recipients were talked into taking it by Paulson, mostly so Citicorp and BOA would not stick out like sore thumbs, then it's purpose, for the most part , has been accomplished.

    The fly in the ointment are those warrants entitling the U.S. government to buy stock in the banks. As the stock price of trhe banks has gone up, the value of those warrants has increased and the price of buying them back has also increased.

    If there was any doubt that Obama and Geithner's prime objective was control over the banks, it has been put to rest. It's not good enough for the banks to pay back the TARP money; even with a healthy premium. Geithner and Obama want to hang on to those warrants to exercise control just like they control GM and Chrysler.

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    Default Re: Bank Bail-Out Backfiring

    Quote Originally Posted by Eric Stoner View Post

    If there was any doubt that Obama and Geithner's prime objective was control over the banks, it has been put to rest. It's not good enough for the banks to pay back the TARP money; even with a healthy premium. Geithner and Obama want to hang on to those warrants to exercise control just like they control GM and Chrysler.
    Business has shown it can't take care of business. The extreme options were let the economy collapse or nationalization. Buy low sell high is the way Wall Street is supposed to work now business will have to listen to the stock owners.

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    Banned Eric Stoner's Avatar
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    Default Re: Bank Bail-Out Backfiring

    Quote Originally Posted by Earl_the_Pearl View Post
    Business has shown it can't take care of business. The extreme options were let the economy collapse or nationalization. Buy low sell high is the way Wall Street is supposed to work now business will have to listen to the stock owners.
    MOOSE MUFFINS !

    Fannie Mae and Freddie Mac and Congressional meddling in bank lending as with expanding the CRA helped create this mess.

    CAFE standards; drilling restrictions; ethanol mandates etc. screwed up the price of oil and corn and injured the auto industry.

    There were plenty of other options to the bailouts. Bankruptcy for one. The actions of the Fed for another.

    Paulson ( and GEITHNER as head of the N.Y. Fed ) made a BIG mistake trying to pick and choose who to bail out ( Bear Stearns and Merrill Lynch ) and who to let fail ( Lehman Brothers ). They compounded their mistakes by forcing banks who didn't want or need TARP money to take it. Why do you think they didn't lend out the money ? Why did many banks just bolster their balance sheets ? Because they wanted to pay it back ASAP !

    Were there excesses independent of the Government like AIG ? Yes.
    Was the SEC asleep on the job ? Yes.
    Why penalize the "good ' banks and the economy at large ?
    Last edited by Eric Stoner; 05-20-2009 at 07:07 AM.

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    Default Re: Bank Bail-Out Backfiring

    Quote Originally Posted by Eric Stoner View Post
    MOOSE MUFFINS !

    Fannie Mae and Freddie Mac and Congressional meddling in bank lending as with expanding the CRA helped create this mess.

    CAFE standards; drilling restrictions; ethanol mandates etc. screwed up the price of oil, corn and injured the auto industry.

    There were plenty of other options to the bailouts. Bankruptcy for one.
    Fannie Mae and Freddie Mac are private shareholder-owned companies. Congress was asleep while banks and Wall Street were playing the real estate Ponzi scheme.

    Attempting to bring CAFE into this is a red herring as only GM and Chrysler took money; Ford is under the same CAFE rules and is solvent.

    I just bought a 300 horse power Mustang GT and did not have to pay a gas guzzler tax. CAFE and muscle cars perfect together.


    For illustration only.

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    Default Re: Bank Bail-Out Backfiring

    Quote Originally Posted by Eric Stoner View Post
    Many banks including a lot of the "biggies" are desperately trying to pay back the TARP money they took asap. Some smaller banks already have. Some are being held up because the taxpayers own warrants for their stock.

    If the purpose of the TARP was to prevent a banking collapse and if many recipients were talked into taking it by Paulson, mostly so Citicorp and BOA would not stick out like sore thumbs, then it's purpose, for the most part , has been accomplished.

    The fly in the ointment are those warrants entitling the U.S. government to buy stock in the banks. As the stock price of trhe banks has gone up, the value of those warrants has increased and the price of buying them back has also increased.

    If there was any doubt that Obama and Geithner's prime objective was control over the banks, it has been put to rest. It's not good enough for the banks to pay back the TARP money; even with a healthy premium. Geithner and Obama want to hang on to those warrants to exercise control just like they control GM and Chrysler.
    I agree in spirit with most of your post, but the bank leaders who agreed to the warrants must have known the stock price would go up when they started pulling themselves out of the muck.

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    God/dess Deogol's Avatar
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    Default Re: Bank Bail-Out Backfiring

    Earl, nice car!

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    Featured Member minnow's Avatar
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    Default Re: Bank Bail-Out Backfiring

    ETP: Yeah, nice ride, though it looks like there might be some post purchase mods that boost the HP> 300. Good "sleeper". Where in NJ will you be going fast enough (besides track) where the hood flying open would be an issue?

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    Default Re: Bank Bail-Out Backfiring

    Quote Originally Posted by minnow View Post
    ETP: Yeah, nice ride, though it looks like there might be some post purchase mods that boost the HP> 300. Good "sleeper". Where in NJ will you be going fast enough (besides track) where the hood flying open would be an issue?
    The fine print says For illustration only, I didn't have a picture of mine handy; mine is a 2009 45th anniversary bone stock 300 HP. It was my patriotic duty to buy a car. I run a 1/4 mile at Island Dragway in the 13's and get 24 MPG highway on regular gas.

    The muscle cars in the 60's used more gas and were slower. Slower even though they had no pollution controls or heavy safety equipment. It can be done.

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    Default Re: Bank Bail-Out Backfiring

    MOOSE MUFFINS !

    Fannie Mae and Freddie Mac and Congressional meddling in bank lending as with expanding the CRA helped create this mess.

    CAFE standards; drilling restrictions; ethanol mandates etc. screwed up the price of oil, corn and injured the auto industry.

    There were plenty of other options to the bailouts. Bankruptcy for one. The actions of the Fed for another.
    You've got that point exactly right. Funny isn't it how gov't meddling is conveniently forgotten.


    Fannie Mae and Freddie Mac are private shareholder-owned companies
    and those shareholders had ZERO input when Clinton's HUD director dictated a new policy toward Fannie and Freddie that forced them to expand their percentage of loans to low income urban home buyers a.k.a. subprime !

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    Default Re: Bank Bail-Out Backfiring

    According to reports that came out yesterday, the first group of banks that will be released from TARP is supposed to be announced after Memorial Day. Reportedly, there is a LOT of lobbying and jockeying among the banks to get into that first group.

    Geithner has also backtracked on executive compensation limits imposed by "Barack and The Obamas" under the Dodd Amendment.

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    Default Re: Bank Bail-Out Backfiring

    Quote Originally Posted by Earl_the_Pearl View Post
    The fine print says For illustration only, I didn't have a picture of mine handy; mine is a 2009 45th anniversary bone stock 300 HP.
    I finally took a picture.

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