futurepilot16
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Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 4:54 pm

My question is, why the HELL did you lend them the money in the first place? We know how Wall street is and we know how the banks are. Did he think by lending the banks all this money, it would somehow trickle down to the people who actually need it? How profoundly stupid.

These CEOs are now making record bonuses, WTF. These people are some of the worst in America and we don't seem to want to regulate them. Ben Bernanke is terrible. What Obama did is like giving a criminal with numerous weapons, thousands of rounds of ammo. It makes no sense.

http://www.msnbc.msn.com/id/34833757/ns/business-us_business/

Big surprise, the banks support the record bonuses

http://www.msnbc.msn.com/id/34840056..._business/?ns=business-us_business
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mt99
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 4:58 pm



Quoting FuturePilot16 (Thread starter):
HELL did you lend them the money in the first place?

Why the HELL did banks lend the money to home buyers in the first place?
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casinterest
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 5:17 pm



Quoting FuturePilot16 (Thread starter):
These CEOs are now making record bonuses, WTF. These people are some of the worst in America and we don't seem to want to regulate them. Ben Bernanke is terrible. What Obama did is like giving a criminal with numerous weapons, thousands of rounds of ammo. It makes no sense.

You Blame Obama??

Go back and look where the original bailouts came from in 2008, when Obama was just a Senator.
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alberchico
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 5:19 pm



Quoting FuturePilot16 (Thread starter):
My question is, why the HELL did you lend them the money in the first place

To do nothing would be political suicide, and secondly now that they are making money its time for the govt to step in and take back all the money it needs. I'm still waiting for serious regulatory reform in the financial markets. If the banks can't be trusted then the govt has the right to step in.

Of course some will scream that its socialism  Yeah sure
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LAXintl
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 5:35 pm



Quoting FuturePilot16 (Thread starter):
My question is, why the HELL did you lend them the money in the first place?

Because many were on the verge of sinking much due to non performing loans and declining real-estate values.

Quoting FuturePilot16 (Thread starter):
These CEOs are now making record bonuses, WTF.

And what is wrong with that? If a company is making money, by all means reward folks.

Anyhow, what do you think happens with bonus money? When I get a bonus especially large amounts I either 1) spend it on large items, or 2) invest it including on property.
So money ends up one way or the other back in the economy.

Business should never be shamed into paying what they feel is appropriate. We dont seem to have problems with athletes or celebrities earning huge sums, so why should corporate be demonized.

Quoting Mt99 (Reply 1):
Why the HELL did banks lend the money to home buyers in the first place?

That is the good question.

But you know its comical the government today is jumping up and down encouraging banks to lend again, which is exactly what got us in the mess.

So what the government want? Banks to be more cautious with lending practices to avoid free flow of money and mistakes as before, or for them to carefully review and weigh every lending decision which obviously would find many businesses and people too risky to lend to.
Mr. Obama you cant have both.
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MaverickM11
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 5:40 pm



Quoting Mt99 (Reply 1):
Why the HELL did banks lend the money to home buyers in the first place?

Lots of reasons, but boy did the politicians love it when every man, woman, and child could get a loan to buy a house, regardless of their income and ability to pay it back.

Quoting LAXintl (Reply 4):
But you know its comical the government today is jumping up and down encouraging banks to lend again, which is exactly what got us in the mess.

 checkmark  As soon as they start lending only to people who can afford loans, they'll again be accused of being anti-poor, which invevitably affects minorities more, and therefore racist, and the cycle will repeat. Never mind Fannie/Freddie...
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Dreadnought
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 5:54 pm

Quoting Mt99 (Reply 1):
Why the HELL did banks lend the money to home buyers in the first place?
1. The government required them to lower their standards, all in the name of "affordable housing", through tools such as the CRA.

2. To ease some of the risk, the government required Fannie Mae and Freddie Mac to buy a lot of these risky mortgages, creating an artificially inflated secondary market for these assets.

Without such requirements and the support of the FM Twins, no bank is going to loan people 100% of the value of a house with dicey income and no 'skin in the game'. The bubble would not have happened, and neither would the collapse of last year.

Quoting FuturePilot16 (Thread starter):
These CEOs are now making record bonuses, WTF. These people are some of the worst in America and we don't seem to want to regulate them.
I'm all for intelligent regulation. The banks in the US ARE regulated, but on stupid things such as CRA. If you want a good example, look at the Swiss Banking system. One thing you can say about Switzerland is that they know how to manage a solid banking system (at least internally - they got in trouble outside of Switzerland). The Federal Banking Commission which regulates the banks is powerful, but the regulations are short and concise, making compliance more of a question of execution than just paperwork, as it is mostly here.

My problem with this new proposal is that it creates a huge new tax on banks, even those that have already repaid all of their TARP money, including interest. That's hardly fair.

[Edited 2010-01-14 09:55:31]
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mt99
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 6:33 pm



Quoting Dreadnought (Reply 6):
1. The government required them to lower their standards, all in the name of "affordable housing", through tools such as the CRA.

And the poor poor banks who do not have a voice or any clout had to put their chin up and take it (even as their stock kept rising).
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futurepilot16
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 6:54 pm

Thanks to all that responded.

I think that even though some people are saying that doing nothing would have been horrible, it's still horrible event though the gov't took billions of taxpayers money and essentially gave it to the banks, they did nothing with it other than pocket it do their fat cat CEO's can buy a new yachts and new planes.

Quoting Dreadnought (Reply 6):
My problem with this new proposal is that it creates a huge new tax on banks, even those that have already repaid all of their TARP money, including interest. That's hardly fair.

I'm fine with those financial institutions that have repaid what they had to the gov't, they have no obligation beyond that.

Quoting Mt99 (Reply 1):

Why the HELL did banks lend the money to home buyers in the first place?

Because our gov't over the last 8 years chose not to regulate them and allowed it to get out of hand, AND we continue not to want to regulate these banks.

Quoting CasInterest (Reply 2):

You Blame Obama??

The gov't, chairman of the fed, Geithner, anyone who had to with the massive amount of tarp money given out to these banks.

Quoting Dreadnought (Reply 6):
One thing you can say about Switzerland is that they know how to manage a solid banking system

Amazing that the U.S. with all of our Pulitzer prize winning economic advisers can't seem to do a simple thing as to regulate banks. It's a lot more complicated than it sounds, but it can be done, and should be done now.

Quoting LAXintl (Reply 4):
And what is wrong with that? If a company is making money, by all means reward folks.

No. I'm not comfortable with these guys getting pay raises with the money coming from the taxes of hundreds of millions of dollars. They're already making an Insane amount of money per year. Are you telling me that some CEO making 9 million dollars per really needs a bonus of 3 million dollars? It makes it ten times worse that their companies are in such horrible conditions.


Finally... they need to get rid of Geithner. The same guy that ran the fed in New York for 6 or 7 years, running the financial system into the ground, then they appoint him Secretary of Treasury so he can take the hundreds of millions of dollars of taxpayer money and give it back to the same banks that he help run into the ground.
"The brave don't live forever, but the cautious don't live at all."
 
Ken777
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 8:07 pm

At the height of the crisis both Administrations understood that we would have a massive free fall if the major banks were allowed to fail.

That resulted in bailouts for the good of the country - not the good of the banks.

And, unfortunately, the banks maintained a self-centered attitude ever since they were bailed out. Now we see how much they love themselves - putting cash over country - with bonuses that are a huge percentage of the annual profits.

I'm not surprised if there is anger in the country each year the money game starts. At it appears that attitudes are at a point where the public and politicians (not on the bankers teat) are ready for some changes. A tax on non-lending income? Fine. Taxes on bonuses? That looks possible, especially when it adds in business sectors that provide bonuses in stock to minimize taxes.

I can also see the Fed changing the fees charged - especially when it comes to banks that do not focus on lending.

And maybe go and un-repeal some laws in the banking industry.

Quoting LAXintl (Reply 4):
Business should never be shamed into paying what they feel is appropriate.



Quoting Dreadnought (Reply 6):
My problem with this new proposal is that it creates a huge new tax on banks, even those that have already repaid all of their TARP money, including interest. That's hardly fair.

I won't cry very much for those banks that screwed up so much - especially if they are focusing on investing as opposed to lending. Let's break these oversized companies up into manageable pieces, regulate them at a more effective level and support only those who are in the country's interests.
 
jcs17
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 8:18 pm



Quoting Mt99 (Reply 1):
Why the HELL did banks lend the money to home buyers in the first place?

A piece of legislation got passed called Community Reinvestment Act during the Carter administration saying that banks couldn't discriminate in lending to people based on whether they lived in a high or low income area. The banks were correct in concluding that people who live in low/middle income areas tend to have worse performance in terms of re-payment. In 1992, Bill Clinton made Fannie Mae and Freddie Mac make a percentage of their loans to support "affordable housing." Furthermore, Janet Reno threatened banks that if they didn't participate in CRA they would be subject to huge fines and prosecution. If it was up to the banks, most of them would've never made the loans had the government not put a gun to their heads.

In fact, for a time during the G.W. Bush administration a few people were screaming that if these laws weren't changed drastically the market would tank with bad loans. However, good ol' Barney Frank wasn't about to let facts stand in the way of Democrat policies, and angrily protested that this was racist, anti-poor, etc.

This is the dirty little secret that never gets reported in the mainstream media.

Quoting FuturePilot16 (Thread starter):
My question is, why the HELL did you lend them the money in the first place? We know how Wall street is and we know how the banks are. Did he think by lending the banks all this money, it would somehow trickle down to the people who actually need it? How profoundly stupid.

I agree. They never should've received a dime. However, trickle down to the people who need it? What did you expect? Your bank teller handing out a 5-spot instead of a lollipop? A bank needs to do things like pay its employees and run its operations.

Quoting FuturePilot16 (Thread starter):
These CEOs are now making record bonuses, WTF. These people are some of the worst in America and we don't seem to want to regulate them. Ben Bernanke is terrible. What Obama did is like giving a criminal with numerous weapons, thousands of rounds of ammo. It makes no sense.

These people are the worst people in America? Why? Nothing is worse than trying to make a profit and continue the employment of 80,000 people in your company, right. Regulate them how? Tell them how much they can earn? That is a textbook definition of socialism.

Quoting FuturePilot16 (Reply 8):
No. I'm not comfortable with these guys getting pay raises with the money coming from the taxes of hundreds of millions of dollars. They're already making an Insane amount of money per year. Are you telling me that some CEO making 9 million dollars per really needs a bonus of 3 million dollars? It makes it ten times worse that their companies are in such horrible conditions.

So you'd pay the CEO $1 million a year, right? Have a good time finding and retaining a well-qualified CEO in the banking industry for that. FuturePilot16, why stop at upper management at banks and brokerage houses? Lets stop athletes, actors, and musicians from earning $9 million a year, with $3 million bonuses. I'm sure champions of social justice like Spicol... Sean Penn and Babs Streisand would be cool with that.

The real trouble with this bill is that the banks are going to be taxed, and with all corporate taxes, who is really paying for it? You, the consumer are.
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BMI727
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 8:20 pm



Quoting FuturePilot16 (Thread starter):
These people are some of the worst in America and we don't seem to want to regulate them.

No they aren't. They are just making money.

Quoting FuturePilot16 (Thread starter):
What Obama did is like giving a criminal with numerous weapons, thousands of rounds of ammo. It makes no sense.

Not really because the bankers aren't criminals.

Quoting Mt99 (Reply 1):
Why the HELL did banks lend the money to home buyers in the first place?

And why did people buy houses they couldn't pay for? There is plenty of blame to go around.
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Ken777
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 9:18 pm



Quoting JCS17 (Reply 10):
This is the dirty little secret that never gets reported in the mainstream media.

That a pretty good description of that side of the coin. The OTHER side of the coin was that the financial sector developed game to play that ;allowed them to make money off of a cat or dead person buying a house. Lots of falsified documents, lots of games and a plump slice of profit off of each sale - no matter how bad the loan. Even Barney Frank couldn't have guess the degree of profitability the sector would make off of the games they played.

If we get back to reality, there is essentially nothing wrong with developing programs for lower income people. Cut of the games that have been played, limit the size of the homes to avoid McMansions, fund special needs for disabled, and don't make the path to a home too easy - require some demonstration of work habits, taking personal financial management classes, etc.
And keep a hard eye on those financing the programs. Set standards and identify in advance the prisons where those playing games will go. The failure to jail a lot of the game playing, high money making SOBs that inflated this mess is an unfortunate indicator that it can happen again.
 
futurepilot16
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:01 pm



Quoting BMI727 (Reply 11):

Not really because the bankers aren't criminals.

 rotfl  I hope you didn't write that with a straight face.

Quoting BMI727 (Reply 11):

And why did people buy houses they couldn't pay for? There is plenty of blame to go around.

Simple, if you give a gun to a chimp and the chimp shoots somebody, you don't blame the chimp.

Quoting JCS17 (Reply 10):
Regulate them how?

How about regulating them so they don't lend out hundreds of millions of dollars in loans to people living below the poverty line, people they know for a FACT cannot repay the loans. WOW, how socialist of our gov't if they ever did that. How dare they regulate the banks and stop them from helping to collapse the U.S. economy  Yeah sure, but of course we surely can't That's socialism.

Quoting JCS17 (Reply 10):
Have a good time finding and retaining a well-qualified CEO in the

Qualified CEO? So it doesn't disturb you to know that the gov't took your money and gave it to multi millionaires so they can pocket it and make themselves richer?

Quoting JCS17 (Reply 10):
athletes, actors, and musicians from earning $9 million a year, with $3 million bonuses.

WHAT? What are you talking about? Actors and Athletes are entertainers who we pay to see for our own entertainment. Where do you get that from? A CEO is not an entertainer, and an Athlete is certainly not upper management, although they do make just as much. However, those Athletes and Actors of which you speak don't take taxpayer money, which they should use to better their business, and put in their greedy pockets.

Quoting Ken777 (Reply 9):
et's break these oversized companies up into manageable pieces, regulate them at a more effective level and support only those who are in the country's interests.

NO WAY, we can't do that. According to JCS17, that is a textbook definition of socialism.
"The brave don't live forever, but the cautious don't live at all."
 
BMI727
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:07 pm



Quoting FuturePilot16 (Reply 13):
Simple, if you give a gun to a chimp and the chimp shoots somebody, you don't blame the chimp.

You might have a point, if chimps can ever buy houses. I don't think that asking people to be responsible for their own finances is too much for them.
Why do Aerospace Engineering students have to turn things in on time?
 
mt99
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:28 pm



Quoting BMI727 (Reply 14):
You might have a point, if chimps can ever buy houses

To make a profit on the commission, a mortgage lender would have sold the house to a chimp.
Step into my office, baby
 
dxing
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:40 pm



Quoting LAXintl (Reply 4):
Quoting FuturePilot16 (Thread starter):
These CEOs are now making record bonuses, WTF.

And what is wrong with that? If a company is making money, by all means reward folks.



Quoting FuturePilot16 (Reply 8):
No. I'm not comfortable with these guys getting pay raises with the money coming from the taxes of hundreds of millions of dollars.

Banks, like many large companies have varied sources of revenue. If the currency trading section of the bank has done well, why should those employees be penalized?
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OA412
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:41 pm



Quoting LAXintl (Reply 4):
And what is wrong with that? If a company is making money, by all means reward folks.

As a taxpayer whose money went to bail them out when their greed forced them to go begging at government's feet, I'm of the opinion that they shouldn't be getting any bonuses until they pay us all back first. One less summer home isn't going to be the end of them.

Oh and for those of you who are going to argue that companies need to reward the higher ups because they're the best and the brightest of society, jsut remember that the best and the brightest wouldn't have gotten us into the mess we are in.

Quoting LAXintl (Reply 4):
We dont seem to have problems with athletes or celebrities earning huge sums, so why should corporate be demonized.

IMHO, they are similarly overpaid for the work that they do.

Quoting JCS17 (Reply 10):
Tell them how much they can earn? That is a textbook definition of socialism.

Again with the socialism bogeyman.
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jcs17
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:45 pm



Quoting FuturePilot16 (Reply 13):
How about regulating them so they don't lend out hundreds of millions of dollars in loans to people living below the poverty line, people they know for a FACT cannot repay the loans. WOW, how socialist of our gov't if they ever did that. How dare they regulate the banks and stop them from helping to collapse the U.S. economy  , but of course we surely can't That's socialism.

First of all, no one living below the poverty line was getting a loan for a house, don't try to embellish the situation.

Your paternalism and elitism is stunning. What about the responsibility of the people who are taking out a loan to make sure they can pay it? Or are lower class people too stupid to understand that? Maybe we should regulate the credit card, mobile phone, and cable TV industries too, so that those less fortunate don't get stuck with a $8,000 Visa bill and a $100 Comcast bill when they make $1,500 a month.

Quoting FuturePilot16 (Reply 13):
WHAT? What are you talking about? Actors and Athletes are entertainers who we pay to see for our own entertainment. Where do you get that from? A CEO is not an entertainer, and an Athlete is certainly not upper management, although they do make just as much. However, those Athletes and Actors of which you speak don't take taxpayer money, which they should use to better their business, and put in their greedy pockets.

You're really not getting my point, right?
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mt99
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:49 pm



Quoting JCS17 (Reply 18):
What about the responsibility of the people who are taking out a loan to make sure they can pay it?

Agreed. But are the banks devoid of ANY responsibility? Seriously. Should banks be looking after their investments?
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Ken777
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 10:56 pm



Quoting FuturePilot16 (Reply 13):
NO WAY, we can't do that. According to JCS17, that is a textbook definition of socialism.

The consolidation of companies into "banks" started in the 90s when some restrictions were removed. Let's return those restrictions, step back from the disaster and then watch over all the companies. Exceptional increases in oversight are needed - the last 10 years proved that. The cost of bailing out the banks has gone through the roof, and those enjoying the marketing benefits of FDIC protection need to pay more.

On the tax side, that is at the pleasure of the politicians and I doubt if the average voter will shed too many tears for the bankers.
 
NIKV69
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 11:21 pm



Quoting CasInterest (Reply 2):
o back and look where the original bailouts came from in 2008, when Obama was just a Senator.

So your telling me if Bush told the banks to go screw Obama would have held that stance as soon as he took office? No, Bush went againt his judgement and bailed them out because he if he didn't Obama would have done it and would have spent his whole 4 years blaming Bush worse than he does now.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
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OA412
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 11:42 pm

Quoting NIKV69 (Reply 21):
No, Bush went againt his judgement and bailed them out because he if he didn't Obama would have done it and would have spent his whole 4 years blaming Bush worse than he does now.

That's a new one. So now you're telling us that Bush only bailed out the banks because he knew that Obama would have done so anyway and that it was one small way in which to redeem his already tarnished reputation? Nice try.

[Edited 2010-01-14 15:44:41]
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Dreadnought
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 11:45 pm

Quoting Mt99 (Reply 19):
Agreed. But are the banks devoid of ANY responsibility? Seriously. Should banks be looking after their investments?

Bingo.

A bank which had to keep the mortgages they sell on their books would automatically look after those investments. They would be careful who they lend to. They would value them at realistic values.

However there is a rational need for a secondary market. Banks need to be able to liquefy these assets if they need to. To liquefy those mortgages, they become securities. Informed buyers (banks, investment companies) would buy such securities with their surplus cash, in return for the interest and principle payments. Prior to purchase, they would grade those securities based on the health of the underlying mortgages - most especially how much the homeowner has invested compared to the bank's investment.

Mortgage Securities, as originally created by the private market, is essentially a Secured Bond, a very safe form of investment. Unsafe mortgages, where there is insufficient security (little or no money down, mainly), could also be sold on the secondary market, but at much less than par value. This provided a market incentive for banks to be responsible with their loans, because if they weren't, their mortgages would be valued at maybe half their face value.

Under such a system, the mortgage industry would be very safe and secure. However, unless you can put at least 20% down, you can forget about getting a loan to buy a house.

What messed it up was Fannie Mae and Freddie Mac. They arrived on the scene and said, "Hey guys, I'll buy all the mortgages you have." The secondary market, which would normally be a failsafe mechanism for banks, and not extensively used, instead became a primary motivator for banks to make loans for the commissions and fees, and then they unload the asset onto FM. This was Government Distortion Number 1.

Government Distortion Number 2 was when the government got onto the "affordable housing" kick, giving quotas to individual banks to loan money in poor neighborhoods, and then ordering the FM Twins to buy them (last I heard, about 50% of mortgages bought by the FM Twins had to be high-risk loans). A mechanism was even provided so that such mortgages would be purchased at close to par value, eliminating the incentive to provide loans only to people who can be reasonably expected to pay.

And the FM Twins would repackage and resell the mortgage securities, with the implicit guarantee of the federal government. Based on that guarantee, they were still at near-par value.

The result is what you said: Banks who sold as many mortgages as they could, regardless of how safe they are, knowing that the FM Twins would buy them at full value, and the banks get the commissions. I heard recently that over 90% of all mortgages in the country are either owned by Fannie/Freddie or have been laundered through them and resold to banks and investment firms. Banks no longer give you a mortgage loan for the promise of repayment of interest and principle over time, but for commissions and fees, and immediately roll them over. The mortgage industry is completely distorted and free-market safety mechanisms short-circuited. AND THE GOVERNMENT DID IT! You might argue that it was done for noble reasons, but government interference were the root cause of all the damage of the last 18 months, because the easy mortgage policies they promoted caused the bubble, which had to burst someday.

I don't blame the banks. They acted properly in regards to the market incentives in place. I blame the government and all the administrations that progressively destroyed all the incentives for banks to lend responsibly.

[Edited 2010-01-14 15:48:05]
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futurepilot16
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RE: Obama To Banks: We Want Our Money Back!

Thu Jan 14, 2010 11:53 pm



Quoting JCS17 (Reply 18):

First of all, no one living below the poverty line was getting a loan for a house, don't try to embellish the situation.

It's called exaggeration

Quoting JCS17 (Reply 18):
What about the responsibility of the people who are taking out a loan to make sure they can pay it

As I said before, the banks are the bigger picture, you can't always expect human beings to act responsibly, if we all acted responsibly we wouldn't be in this mess.

I don't want to make it seem like i'm blaming the banks alone, because I don't want to. People who inadvertently took loans they couldn't repay are responsible for it as well. But the banks have to have the guts to look someone in the face and say "you cannot afford a house that costs $250,000, therefore we can't loan you this money because you can't pay it back". But the love of money and the amount of interest rates they could pile on these loans made them do this  drool , and they couldn't stop.

At some point, a bank has to pull the plug when they get into a red area. Ya can't overtly blame the people who are asking for loans, because it's up to the banks to weed out who can get a loan they can repay, and who can't.
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Aaron747
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 4:31 am



Quoting Mt99 (Reply 1):
Why the HELL did banks lend the money to home buyers in the first place?

The blame lies mostly with previous Democratic Congressional majorities, as has already been enumerated.

Quoting JCS17 (Reply 10):
So you'd pay the CEO $1 million a year, right? Have a good time finding and retaining a well-qualified CEO in the banking industry for that.

Utter nonsense. There are accomplished banking executives throughout this region that perform well and make far less. Total compensation packages over $2 million are very rare in Japan, Singapore, Korea et al. Hong Kong is the only place in Asia you'll find compensation similar to Western countries and only because most of its financial sector are holdovers from their days as a British crown colony.

There's more to it than the money, or at least should be.

Quoting JCS17 (Reply 10):
Lets stop athletes, actors, and musicians from earning $9 million a year, with $3 million bonuses. I'm sure champions of social justice like Spicol... Sean Penn and Babs Streisand would be cool with that.

There's no need for that - increasingly technology and its effects on the revenues possible within their industry will drive pay down, as has already happened in the music industry. If they want to make more money they'll have to find other additional avenues of performance.

Quoting LAXintl (Reply 4):
Business should never be shamed into paying what they feel is appropriate. We dont seem to have problems with athletes or celebrities earning huge sums, so why should corporate be demonized.

True but business needn't have an overly exaggerated sense of self-importance either - public perceptions are alive and well and die hard - and increasingly banks are not well liked by most. When you have morons like Blankfein running around claiming they're doing "God's work" and that their professionalism is on par with police and firemen, it leaves everyone scratching their heads.

Quoting NIKV69 (Reply 21):
No, Bush went againt his judgement and bailed them out because he if he didn't Obama would have done it and would have spent his whole 4 years blaming Bush worse than he does now.

LOL, you know this for a fact? It had everything to do with an ex-Goldman CEO and heavily connected individual sitting on top of the Treasury who wasn't about to watch his friends and college buddies lose their livelihoods. The same is true of Geithner now. Neither Bush or Obama are anything remotely approaching knowledgeable with regard to the banking industry and everyone knows it.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
MAH4546
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 4:46 am



Quoting OA412 (Reply 17):
they shouldn't be getting any bonuses until they pay us all back first.

A lot of the banks have already repaid the loans. So I guess you don't have a problem with most of the bonuses then, right?

Quoting OA412 (Reply 17):
jsut remember that the best and the brightest wouldn't have gotten us into the mess we are in.

The mess wasn't created by the banks. It was created by Democrat-created policies that essentially force banks to loan to lower income people. Because, obviously, not giving loans to lower-income people is "racist" and "elitist," regardless of the fact that it is the financially responsible thing for the bank to do.

And now Obama wants the banks to loan to small business owners more freely? The same high-risk small business owners that created this mess? No thank you. I can't wait until he's gone so a Republican President can once again show how to run a prosperous economy. And its looking more and more like he'll be gone in three years, not seven, thankfully.
a.
 
Ken777
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 5:01 am



Quoting MAH4546 (Reply 26):
The mess wasn't created by the banks.

While politicians wanted to open the spread of the home loan ownership I can't remember any law or regulation that required banks (or anyone else in the financial sector) to fund a milion dollar house for some dude on mimimum wage.

Simple fact is that the financial sector discovered the profits (and huge individual bonuses) to be made from churning out as many loans as possible.

Churn, Baby, Churn.

With the (incorrect) belief that they would be protected with inflation in the housing market those high income earners in the financial sector would probably have loaned the money to your aunt's cat.

Quoting MAH4546 (Reply 26):
force banks to loan to lower income people.

As noted above, Churn, Baby, Churn.

Quoting MAH4546 (Reply 26):
And now Obama wants the banks to loan to small business owners more freely?

Obama wanted to have a nice chunk of the bailout money to go to loans, but the banks preferred to simply invest it instead. That got the ball rolling on increasing taxes on the banks.

Quoting MAH4546 (Reply 26):
The same high-risk small business owners that created this mess?

Looks like a lot of small businesses are far better risks than the banks. How many banks did the FDIC tale over in 08 and 09?

And what did small businesses around the country do to garner the horrid reputation you are so quick to apply to them?
 
propilot83
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 6:18 am

God I just loved Obama's aggressive speech. Yea hell with the banks, we are going to get our money back period  Embarrassment the old days of huge bonuses, corruption in the system are now over, the law will be enforced more aggressively, transparency, accountability, and oversight will be even more powerful these days  banghead  go Obama, I am with you all the way, dont you just love aggression sometimes  biting 
 
Flighty
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 6:27 am

The really amazing thing is, Obama says "fat cat bankers" are the reason why GM and the UAW and Chrysler needed a HUGE bailout.

Banks paid back their money. AIG, not so much. But why should banks pay for GM and its union's problems? WTF?

Quoting Propilot83 (Reply 28):
Yea hell with the banks,

So, to hell with ourselves, because we all use banks and will be paying the fees ourselves?

You don't think bankers will make less money... when they can just pass this onto customers... do ya?

The one thing I do like is: >$50B "systemic important" banks will be taxed. This is a cutting edge tool to tax the dangerously large banks only. This is good!

But, why should banks bail out GM... what's next, California teachers, postal workers, and other self-inflicted wounds of various American Democrats? It don't look good.
 
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OA412
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 7:48 am



Quoting MAH4546 (Reply 26):
A lot of the banks have already repaid the loans. So I guess you don't have a problem with most of the bonuses then, right?

No I still do because I am of the opinion that the people earning the bonuses are already overly compensated. We've created this CEO-Obsessed culture in this country that tries to have us believe that CEO's and upper management types are Gods on earth who do a job that us mere mortals could never dream of being capable of doing. This isn't even to mention those whose incompetent management brings down companies from which they leave with a golden parachute only to take the helm of yet another company. How many of us would really be hired on by another company with that sort of track record?

Quoting MAH4546 (Reply 26):
The mess wasn't created by the banks. It was created by Democrat-created policies that essentially force banks to loan to lower income people. Because, obviously, not giving loans to lower-income people is "racist" and "elitist," regardless of the fact that it is the financially responsible thing for the bank to do.

Sure it was. And Wall Street's reckless greed had nothing to do with it.  Yeah sure I have a gorgeous bridge in Brooklyn for sale, dirt cheap.

Quoting MAH4546 (Reply 26):
I can't wait until he's gone so a Republican President can once again show how to run a prosperous economy.

Yeah we all prospered so much under Bush. I used to bathe in champagne now I wait in line for my weekly ration coupons. Please! The only people who prosper under Republican administrations are the rich.

Quoting MAH4546 (Reply 26):
And its looking more and more like he'll be gone in three years, not seven, thankfully.

I guess all of us have our dreams.
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mt99
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 2:30 pm

Quoting Dreadnought (Reply 23):

What messed it up was Fannie Mae and Freddie Mac. They arrived on the scene and said, "Hey guys, I'll buy all the mortgages you have."

Thanks for your detail repose - i appreciate it..

Quoting Dreadnought (Reply 23):
s. I heard recently that over 90% of all mortgages in the country are either owned by Fannie/Freddie

But then, why did BoFA et al where left with the hot potato? If they where to simply act as middle men to F/M?

Quoting Dreadnought (Reply 23):
AND THE GOVERNMENT DID AND Irtysh-Avia (Kazakhstan)">IT!

Dont blame GWB.  He could have been many many thing, but one thing he wasn't was powerless.

[Edited 2010-01-15 06:34:35 by mt99]
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Dreadnought
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 3:43 pm



Quoting Mt99 (Reply 31):
But then, why did BoFA et al where left with the hot potato? If they where to simply act as middle men to F/M?

While the FM Twins keep many martgages in their portfolio (over $5 Trillion last I heard), the rest are resold on the secondary market, after being repackaged. Banks basically buy back many of their own mortgages, but thanks to FM's federal backing and repackaging of undiscounted risky loans with healthy ones, and an artifically high rating, they now appear as more solid investments. One could argue that the FM Twins were engaged in fraud (passing off risky securities as safe ones), and that the whole transaction cycle was a form of security laundering, whereby the risk in many of the loans are washed out in the process.

But if it is the government doing the fraud and laundering, it can't be illegal, can it?

Quoting Mt99 (Reply 31):
Dont blame GWB. He could have been many many thing, but one thing he wasn't was powerless.

Bush did try to sound the alarm and bring the FM Twins under control.

http://www.youtube.com/watch?v=cMnSp4qEXNM&feature=player_embedded

But there was a lot of resistance in Congress. Democrats fought back hard based on the affordable housing argument, and enough Republicans feared being attacked as anti-poor, that the votes never even made it to the floor.

Democrats cannot be expected to know better, so I fault Bush and the Congressional Republicans for not pushing harder to educate the people about the danger. I doubt it would have worked anyway - the press would have sided with the Democrats and pooh-poohed the issue, and the people will not have felt the sense of urgency to overcome their desire for cheap credit. But they still should have tried harder.
Forget dogs and cats - Spay and neuter your liberals.
 
mt99
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 4:00 pm



Quoting Dreadnought (Reply 32):
the press would have sided with the Democrats and pooh-poohed the issue

What about the share holders? traders? wall street? they were making money hand over fist when this was going on. Why would they cry to stop it?

Quoting Dreadnought (Reply 32):
and an artifically high rating

Given by...
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Dreadnought
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 4:33 pm



Quoting Mt99 (Reply 33):
What about the share holders? traders? wall street? they were making money hand over fist when this was going on. Why would they cry to stop it?

Why would they? They believed in the implicit federal guarantee, and thought they were safe.

Quoting Mt99 (Reply 33):
Given by...

The implicit federal guarantee.

We are seeing the effects of government interference in markets. Government interference, no matter how justifiable or reasonable, does create market distortions. This must be recognized by responsible governments, who must ask "What will be the side-effects be? Is the desired outcome of the action worth the side-effects?". This question, it is quite clear, is rarely asked by progressives (of which there are on both sides of the aisle, but mostly on the left).

One sidenote: the operating of the free-market system was first described by Adam Smith in the 1700s. Note that he did not create it - he simply described it. What we call today "Capitalism" (a term that came to use around the time of Marx), Smith called it the "System of Natural Liberty". The free market is essentially nature - the natural behaviour of people interacting. Messing with the free market is no different than messing with nature, with all the environmental consequences that it entails. Some of this interference is justifiable - we need to convert raw materials, consume energy, etc, but there are side-effects as well that should be taken into account, like pollution and maybe climate change.

Nobody argues that government should never interfere. Government involvement in the market is necessary to execute their duties, and regulate the markets to create a reasonable business environment. I'm just saying that governments should proceed slowly and carefully before deciding to interfere.
Forget dogs and cats - Spay and neuter your liberals.
 
seb146
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 5:11 pm



Quoting JCS17 (Reply 10):
In fact, for a time during the G.W. Bush administration a few people were screaming that if these laws weren't changed drastically the market would tank with bad loans. However, good ol' Barney Frank wasn't about to let facts stand in the way of Democrat policies, and angrily protested that this was racist, anti-poor, etc.

So, I guess everything was just peaches and cream under Republicans? Of course they were! Nothing bad ever happens under Republicans. It is only Democrats that do wrong......
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Dreadnought
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 6:21 pm



Quoting Seb146 (Reply 35):
So, I guess everything was just peaches and cream under Republicans? Of course they were! Nothing bad ever happens under Republicans. It is only Democrats that do wrong......

In this case, nobody can possibly deny that Democrats fought tooth and nail to prevent any regulation or brakes being put on Fannie/Freddie and the accumulating bubble they created.

Many Republicans wanted to fix it, but were cowards, and did not force the issue. As I've said earlier, I blame them for some of the failure.
Forget dogs and cats - Spay and neuter your liberals.
 
Flighty
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RE: Obama To Banks: We Want Our Money Back!

Fri Jan 15, 2010 7:41 pm



Quoting Dreadnought (Reply 34):
I'm just saying that governments should proceed slowly and carefully before deciding to interfere.

Nonsense! Capitalism has failed! Raise the hammer and sickle! Etc, etc. Nutcases everywhere have the answers we seek.
 
Pyrex
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RE: Obama To Banks: We Want Our Money Back!

Sat Jan 16, 2010 6:04 am

So basically banks are being asked to pay for the auto industry bailout (responsible for the largest chunk of the TARP losses) even though they have already repaid their money. Nice. Maybe tomorrow I will get a letter from my bank saying "I know you have already repaid your mortgage but we are charging you some more money to pay for your deadbeat, do-nothing neighbor who blew his home equity money on hookers and coke."

Quoting Alberchico (Reply 3):
Of course some will scream that its socialism

Not socialism. Retroactive taxation, yes. (Another) egregious breach of contract rights, yes. Possibly unconstitutional discrimination, maybe. Not socialism.

Quoting LAXintl (Reply 4):
Business should never be shamed into paying what they feel is appropriate. We dont seem to have problems with athletes or celebrities earning huge sums, so why should corporate be demonized.

Because in our society being borderline illiterate and being able to run at speed against other people even though you weigh 300 lbs is more highly valued than managing an organization with thousands of people and creating value for your shareholders and society. Hey, whatever sells beer...

Quoting MaverickM11 (Reply 5):
Lots of reasons, but boy did the politicians love it when every man, woman, and child could get a loan to buy a house, regardless of their income and ability to pay it back.

And how they loved it when all tha "fat-cat" bankers were paying 50% taxes on those bonuses.

Quoting Ken777 (Reply 9):
And maybe go and un-repeal some laws in the banking industry.

Like the Glass-Steagall act? Pray tell, is there any single paragraph in Glass-Steagall that could have prevented this crisis? Because I know plenty of paragraphs in it that would have prevented the relatively orderly exit from the crisis we had...

Quoting Ken777 (Reply 9):
Let's break these oversized companies up into manageable pieces, regulate them at a more effective level and support only those who are in the country's interests.

Yes, because thousands of smaller banks are much more manageable than a handful of smaller ones. And more responsible, too - just go ask the FDIC about the assets they have taken over as part of some of the "community" banks they repossessed.

Quoting OA412 (Reply 17):
Oh and for those of you who are going to argue that companies need to reward the higher ups because they're the best and the brightest of society, jsut remember that the best and the brightest wouldn't have gotten us into the mess we are in.

Yes, because we have never had crisis before. Oh wait, we had, every 5 years or so since man first traded a shiny rock for two round ones. Or maybe in all those years the "best and the brightest" never had a chance to be in charge? Man, we must be repressing them really hard.

Quoting FuturePilot16 (Reply 13):
However, those Athletes and Actors of which you speak don't take taxpayer money,

Who do you think pays for stadiums in the U.S.?

Quoting Flighty (Reply 29):
The one thing I do like is: >$50B "systemic important" banks will be taxed. This is a cutting edge tool to tax the dangerously large banks only. This is good!

Cutting edge in the level of stupidity (and perhaps in how dangereously it teeters discrimination). Larger banks are not a problem, just go ask Canada, the top 5 banks have something like 80% of the market and were just fine. From a prudential standpoint, they are much easier to regulate than thousands upon thousands of smaller credit unions, who fucked up just as badly.
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Alias1024
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RE: Obama To Banks: We Want Our Money Back!

Sat Jan 16, 2010 6:49 am

This is one boneheaded tax. Some of these companies didn't even want or need TARP funds. It was forced on them by a Treasury that needed to look like it had unanimous approval from the big financial firms, then later needed to look like it was doing something with the rest of the TARP funds. If you haven't seen this article from Vanity Fair, it's real eye opening.
http://www.vanityfair.com/politics/features/2009/10/bailout200910
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OA412
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RE: Obama To Banks: We Want Our Money Back!

Sat Jan 16, 2010 7:19 am



Quoting Pyrex (Reply 38):
Yes, because we have never had crisis before. Oh wait, we had, every 5 years or so since man first traded a shiny rock for two round ones. Or maybe in all those years the "best and the brightest" never had a chance to be in charge? Man, we must be repressing them really hard.

And I argued that best and brightest have been repressed where exactly? Are you really going to try and convince me that the best and the brightest were at the helm of AIG, Bear Stearns, Lehman Brothers, Citi, etc.? Give me a break.
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ltbewr
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RE: Obama To Banks: We Want Our Money Back!

Sat Jan 16, 2010 3:06 pm

One of the unintended problems from this proposal to raise the rate of fees and taxes larger banks have to pay to pay for the bail out is that large banks that didn't take any TARP money and practiced sound lending will have to pay for this bail out.

The CEO of one of the biggest 'thrift' banks in the USA, Paramus, New Jersey based Hudson City Savings Bank, is pissed that the bank has to subsidise the losers. HCSB bank is regarded as one of the best run banks in the USA. Their offices are only in New Jersey, lower NY State and a few offices in CT. They didn't take any TARP money, have made more mortgages in the last year than ever, has had a huge movement of money (including a singificant amount of my personal savings) depositied into them due to their sound and reasonably paid management, has made enough CRA mortages to keep the government happy and so on.

The 'tax' and fees proposals must find some way to target excessive pay, bonuses and commisions, end, bad lending practices, mandate reworking and taking losses on bad and shaky loans - not cut lending or penalze 'good' banks.
 
Ken777
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RE: Obama To Banks: We Want Our Money Back!

Sat Jan 16, 2010 5:59 pm



Quoting Pyrex (Reply 38):
just go ask the FDIC about the assets they have taken over as part of some of the "community" banks they repossessed.

And ask the FDIC about the assets they would have had to take over if they had repossessed Citi.

I believe we went to the bring and need to avoid going that far again.
 
Pyrex
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RE: Obama To Banks: We Want Our Money Back!

Sat Jan 16, 2010 6:28 pm



Quoting Ken777 (Reply 42):

And ask the FDIC about the assets they would have had to take over if they had repossessed Citi.

I believe we went to the bring and need to avoid going that far again.

That is not the point. The point is that the notion that smaller banks are somehow safer and more responsible than larger banks is ridiculous (plus, the inefficiencies brought about by a purely local banking system would be tremendous). Plus, saving the depositors in case of a Citi collapse is much easier and cheaper than in the collapse of a thousand 1st Bumblefuck Credit Unions - just inject equity at a significant discount to market price to really hurt shareholders, keep a close eye on management and when capital markets rebound cash out.

How much money did the U.S. government lose with Citi? How much money did the FDIC lose this year in all the banks they closed?
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