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Thread: Too much control

  1. #19

    Default Re: Too much control

    It was forced on them because at the time they brought in the heads of the largest banks(what was it, the 6 largest) and didn't want to name which ones were in the more serious situations, so instead they gave money to all of them to inspire confidence in the banking system.

    If you know that Citi, BOA and whatever are the ones who are on the verge of collapse, you're not going to put your money in there. But if you don't know which is on the verge and you know the Gov't just gave a ton of money to all of them thereby ensuring that they are all fiscally viable, then you raise confidence

    I think everyone knew Citi was on the verge of collapse, whether or not other banks received bailout funds- that is why they lost 98% of their value. In reality, it was more likely forced on them because the US didn't *know* who was in trouble and how bad it would get. They wanted everyone to have enough to survive and will take it back when they see it stabilize. That is why you see each bank receiving different amounts... if they were trying to hide the problem they would have to give each bank the same amount of TARP funding.. otherwise it's pretty apparent who is the worst off.

    I don't know the exact details as to why they don't or won't accept the money back now, other than, I assume they're still in the eye of the storm and they fear that when the commercial loans start defaulting which they very well may, they'll be back to square one. So rather than do that, they just say hold onto it for a year.

    They won't take it back because the problem isn't solved. If the bank is fine the bailout money will be untouched when they give the go ahead to return the money.


    Or the big bad evil black president just wants power over the entire US and they're going to be Socialist. Which is hilarious because McCain's idea's were largely of a "socialist" nature and Bush did a great many things that would be termed as "socialist", but the fear mongering fools try to sell you on the fact that Obama who's really doing things so that he doesn't have to nationalize industry is the socialist. Clever little twist by the way.

    I don't think many people are of the train of thought that Obama is seriously trying to own the banks.

    Obama is trying to save the country from economic collapse. In doing so, the government now owns a large stake in just about every major bank in the United States... most would consider their voting power at Citigroup alone as a case to consider them nationalized. Do you think anything besides their basic day to day activity doesn't run past the white house?



  2. #20
    World Champ ODH's Avatar
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    Default Re: Too much control

    Quote Originally Posted by Schlottke View Post

    I don't think many people are of the train of thought that Obama is seriously trying to own the banks.

    Obama is trying to save the country from economic collapse. In doing so, the government now owns a large stake in just about every major bank in the United States... most would consider their voting power at Citigroup alone as a case to consider them nationalized. Do you think anything besides their basic day to day activity doesn't run past the white house?


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    The whole premise of this thread is that Obama's goal was more control over the banking system so he can turn this country into Europe. This was backed up by a column from the Wall Street Journal. That whole premise was pretty absurd in my opinion.

    I have finally heard coherent arguments on why the government is reluctant to let the banks give back their TARP money. It basically has to do with not identifying which banks are in the worst shape. If all but a few banks gave back the TARP money, the ones that kept the money would be identified as weak banks that are likely to fail and then everyone would rush to pull their money out of these few banks, leading to their collapse and perhaps again to having the whole banking system in jeopardy.

    I never liked the bailout on pricinple and not letting banks pay back the money also seems wrong on principle, but to my uninformed eye, it does seem to be working.

  3. #21

    Default Re: Too much control

    Quote Originally Posted by ODH View Post
    I have finally heard coherent arguments on why the government is reluctant to let the banks give back their TARP money. It basically has to do with not identifying which banks are in the worst shape. If all but a few banks gave back the TARP money, the ones that kept the money would be identified as weak banks that are likely to fail and then everyone would rush to pull their money out of these few banks, leading to their collapse and perhaps again to having the whole banking system in jeopardy.
    So the Government is demanding that banks in good standing keep the debt they were forced to take to save their competitors who were unable to make it through a recession without government aid?

    If you knew your bank would collapse, you should have the right to move it to a more stable bank. Hiding that information from the public doesn't seem to be all that honest.

    Regardless, you can tell which companies are the worst off just by how much funding they've received.

  4. #22
    World Champ ODH's Avatar
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    Default Re: Too much control

    Quote Originally Posted by Schlottke View Post
    So the Government is demanding that banks in good standing keep the debt they were forced to take to save their competitors who were unable to make it through a recession without government aid?

    If you knew your bank would collapse, you should have the right to move it to a more stable bank. Hiding that information from the public doesn't seem to be all that honest.

    Regardless, you can tell which companies are the worst off just by how much funding they've received.
    Not saying I agree with the move, but it is a logical explaination of what is going on. A main objective of the bailout was to keep confidence in the banks. This is one of the only reasons I have heard that makes the banks special, deserving a bailout above all other industries.

    A run on the banks would be a disaster and the Treasury is trying to stop this at all costs.

  5. #23

    Default Re: Too much control

    How about that they gave it to everyone, whether they needed it or not, to prevent them from having a future unexpected failure. (i.e. if BAC said they didn't need it at the time and then had a major surge in mortgage defaults that caused them to need it- it could have caused them to crash very quickly.) By making everyone take it, the government makes it known that each bank is safe from this happening.

    I think the refusal to take it back is because the financial crisis is far from over and they could still easily have more mortgage & credit meltdowns in the future.

  6. #24
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    Default Re: Too much control

    Quote Originally Posted by Schlottke View Post
    How about that they gave it to everyone, whether they needed it or not, to prevent them from having a future unexpected failure. (i.e. if BAC said they didn't need it at the time and then had a major surge in mortgage defaults that caused them to need it- it could have caused them to crash very quickly.) By making everyone take it, the government makes it known that each bank is safe from this happening.

    I think the refusal to take it back is because the financial crisis is far from over and they could still easily have more mortgage & credit meltdowns in the future.
    Sounds like plausible explaination of the governments motives, more so than the Obama is trying to take over the finacial system theories. Not sure that I agree with policy, but I hope those that are implementing it know a lot more about our finacial system than me and are in a better place to make good decisions (yes I trust the government in this matter)

  7. #25
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    Default Re: Too much control

    Bank shares help stocks end trading higher

    Rising bank stocks pulled the market higher Tuesday after Treasury Secretary Timothy Geithner told Congress that some banks could be allowed to repay financial bailout funds.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

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