Some banks want to give back bailout money

[ecoli]

I'm man enough that I can admit when I'm wrong.

 

In an earlier thread, I expressed frustration that Obama would attach so many strings to the TARP money. Now, I see, however, it was his clever way of pretending to bail-out the financial sector, but make it so undesirable for the banks to have the money that they'd refuse it/ try to give it back!

 

http://www.nytimes.com/2009/03/11/business/economy/11bailout.html?hp

 

Here's why I'm so impressed: As bad as the recession is, Obama created a way for private banks to realize for themselves, that government intervention is a worse fate than not getting bailout money and risk collapsing from their own bad judgments.

 

Bravo, Obama! A risky move, but you're certainly letting your free market colors fly, in the end.

[waitforufo]

As bad as the recession is, Obama created a way for private banks to realize for themselves, that government intervention is a worse fate than not getting bailout money and risk collapsing from their own bad judgments.

 

My guess is that individuals are about to learn a similar lesson with regard to mortgage relief, socialized medicine …..

[Dudde]

That is pretty sweet actually, I can applaud his effort in that arena.

 

If there were a good way to make Americans fiscally responsible in like a year, I would volunteer for free to get that in place - even people around me everyday, I see all these horrible and stupid decisions, and I'm definitely not an economist - I don't think the problem will let up until more consumers become a little more economically savvy

[iNow]

In an earlier thread, I expressed frustration that Obama would attach so many strings to the TARP money. Now, I see, however, it was his clever way of pretending to bail-out the financial sector, but make it so undesirable for the banks to have the money that they'd refuse it/ try to give it back!

 

It had the added benefit of adding much needed confidence to the markets and bank traders, and freed up credit in the short-run to prevent issues from getting even worse.

[Pangloss]

Good one.

[bascule]

Here's why I'm so impressed: As bad as the recession is, Obama created a way for private banks to realize for themselves, that government intervention is a worse fate than not getting bailout money and risk collapsing from their own bad judgments.

 

Yep, thumbs up from me.

[ecoli]

It had the added benefit of adding much needed confidence to the markets and bank traders, and freed up credit in the short-run to prevent issues from getting even worse.

 

Did it do that however?

 

While it obviously stopped immediate collapse of major financials (duh), Those who have accepted the money don't seem to be doing well right now.

 

While this is obviously due to residual effects of the collapse, what if no amount (or an impossible amount) of money is what it takes to save the banks, and they fail anyway.

 

Meanwhile, banks that would be able to outcompete the large stupid ones are failling because the can't outcompete the subsidized ones, so they too seek subsidies.

 

Instead of making the banking sector healthier, we're just teaching it that it can't survive without welfare.

[Pangloss]

On a related note, GM canceled its request for an additional $2 billion in emergency loans, sending its stock value up over 17%. They still believe they'll need money in April, and as much as $16 billion between now and the end of the year, but their cost-cutting has been more effective than previously believed.

 

This sounds suspiciously like progress to me.

 

http://money.cnn.com/news/newsfeeds/articles/djf500/200903121419DOWJONESDJONLINE000968_FORTUNE5.htm