Banks Have No Intention To Use Bailout Money To Make Loans

New York Times:

"Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?"

It was Oct. 17, just four days after JPMorgan Chase's chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual.

Read the whole story: New York Times

Comments

[arvay]

Good evidence for the outright nationalization of these major institutions. Next, the oil industry. There's a big risk that they will become meshed in our politics and end up looking like Mexico, but the alternative -- punishing ordinary Americans for their mistakes an crimes -- is far worse.

If we can't foster social responsibility with a nudge, I vote for a sledgehammer.

[bbridges1962]

When does the court procedings start? This country would have tarred and feathered any of us taxpaying middle class people for so boldly wasting money like this. BUSH and all elected officials should FRY....start a whole new crowd of elected officials. Hopefully it will take a couple of years for them to become as corrupt as the ones we have now.

[rkimball]

bank ceos are trading in their yachts for bigger yachts. they are trading in their corporate lear jets for bigger 727 boeing commercial jets. this is not helping the economy. we are well on our way to becoming another banana republic.

[jonmonbuckeye]

I work for National City, and let me be very clear- PNC was GIVEN the company because our CEO and the executive staff did not want to accept any caps on salary. In fact, our CEO will not only receive his "golden parachute", but he will also be a senior executive in PNC. 380 million has been set aside in this purchase for "compensation" related costs... In other words- the entire 380 million will be going to the executive leadership of national city.

The are expecting now between five to eight-thousand layoffs.

By the way... PNC stands for "Previously National City".

[Veri]

Far from most Americans beliefs, the most chilling line (and most astute observation), is... "Treasury would even funnel some of the bailout money to help banks buy other banks..."

Corporations do not give two cents about their workers in the great scheme of making money. Workers are tools. Congratulations. Fools.

When will you understand, you the poor, that corporations are in business for money. And the CEO, is also in it for money. Otherwise, why do you bother showing up at your job? Because, you are in it for the money.

Getting a clue now?

[MyTake]

This exercise by Paulson was pre-planned. It is a Bilderberg Group initiative to suck money out of and further weaken the U.S. Government. The money was never designated for public consumption and will enable consolidation and concentrate more power in the Banking sector.

This consolidation will make it easier for the Bilderberg's to engage Stage Two of this crisis which is to create an event that will cause more havoc in this sector which in turn will make it appealing to countries to unify the banking systems under a Global Banking System.

Paulson lied to you. The government lied to you saying this money would be used to increase loans.

The people in the U.S. are letting World down by not taking to the streets to protest the Bush corruption and force them into delaying these loans until the next administration takes power.

[jsarets]

It doesn't matter how much money we give them, the banks won't make loans if they can't make a profit. They got into this mess in the first place by taking heavy losses on their loan portfolios. The bailout money is needed to back outstanding loans. Any amount beyond that will go toward acquisitions because they can't turn a profit on loans.

The banks didn't care if their loan customers could make their payments so long as the underlying asset was appreciating. They expect the vast majority of their loans to terminate by default. As long as property values were going up, the banks couldn't lose. Now that they're in decline, there's practically no way they can win.

[iambusto]

the banks will be incredibly stupid to give loans to businesses at this recession times. unless they charge exhorbitant rates !!

If you were a banker, would you loan money to your neighbourhood business in this recessionary environment? think about that.

[westcoastsc]

Depends on what will be selling. If it is a green technology or some kind of innovation such as the internet, communication, medicine, health, improvement in cost for travel, improvement in cost, or a demand that has not been met, yes, I will always invest. That money is not theirs to keep and not invest in the economy. To say anything else is a A hole thing to say.

[darthdarcy]

$20 Billion for bonuses out of the $700 billion bail out money and still not one dime for those facing foreclosur­e.....that seems fair...

An they call Putin and Russia's system Thug Capitalism....Putin has a long way to go to equal these guys....Argh..!

Maybe David Chase should do a show on the real Mafia, the Goldman Sachs Paulson Mafia..!

[MatoSka]

After approving the bailout Congress took a break. They should have taken a hike. When they came back, they held hearings. Too bad, they refused to hear American public opinion against the bailout.

Now the $1 trillion goes to banks so that they can buy other banks. Deal or no deal. Uh, that's a no brainer, Howie! All the cases have $25 billion. Deal. Er, no deal. I mean, let me ask the banker, Howie.

"It is starting to appear as if one of Treasury's key rationales for there capitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury's version of the weapons of mass destruction. "In fact, Treasury wants banks to acquire each other and is using itspower to inject capital to force a new and wrenching round of bank consolidation. As Mark Landler reported in The New York Times earlier this week, "the government wants not only to stabilize the industry, but also to reshape it." Now they tell us." http://www.nytimes.com/2008/10/25/business/25nocera.html?hp

Unfortunately for us, no one in Congress bothered to say anything before the $1 trillion giveaway.

[proreality]

Class warfare! Class warfare! Socialists and Bolsheviks all. American's are lazy, that's why they are poor, they don't want to work, that is why they are losing their homes. Just listen to limbaugh, Fox, and the rest of the right, they'll explain it all.

This bailout was NEVER about helping this country, it was about buying a few more weeks or month's and making sure all the rich insiders were safe before everything was wiped out.

It is time for tyrants to hang in the streets. Wall st. should for all future generations imbue people with a collective horror as the word which is not said. It should be made to represent the utmost in human depravity both for its debauchery and the horror of what humans will do to those who seek to rule the world through greed and self importance. In the future when people speak the word Wall-Street it should conjure mental pictures of entrails spread across pinstripe suits and marble pillars drenched in blue blood. After that we can do the same for K street.

[thejepr]

True, the bailout was NEVER meant to be a long term solution to a quick appearing problem, but to say that the entire fiasco was created by the "tyrants" of Wall-street is foolish. You cannot possibly believe that Wall-street represents the utmost in human depravity when in reality its a culmination of human grit and determination.

I'm not saying that there aren't greedy, life-sucking fiends on Wall-street. They fill every corner of every company, but a majority of all companies compose of shareholders desperately trying to make the American Dream come true. Some are trying to make a successful 401K for retirement. Some are trying to rise from the bottomless pit of broke in the hope of securing for themselves.

In reality, though, those investment do little to further that great American Dream. It all comes down to hard work at the office or wherever employment exists. Of course some are self-employed, but most serve under a boss who serves under another boss who serves under a CEO of a company on Wall-street. In the circle of life, there is a circle of business. You cannot have one without the other.

[NWBrunette]

Then we want it back. Too late...

[VitoCorleone]

I've been floating the idea among the other families of opening our own Bank.

[RRG64]

The American public needs to make note of the worst offenders of these banks that are being bailed out and hold them accountable for their actions. Move your money.

[gypsy508]

Of course not. They are going to hoard the money given to them or use it to buy out smaller banks. The bailout was a disgrace. Unfortunately, the Democrats being the ones in power for the next few years are the ones who are going to have to answer for their voting for it.