Banks can't - or won't - account for hundres of billions given to them.

[Iriemon]

US banks that have been provided billions of dollars in bailout funds that were supposed to be used to revive lending won't talk about what's happened to the money:

Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money, said that while some of the money was lent, some was not, and the bank has not given any accounting of exactly how the money is being used. ''We have not disclosed that to the public. We're declining to,'' Kelly said.

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

None of the banks provided specific answers.

''We're not providing dollar-in, dollar-out tracking,'' said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust, which got $3.5 billion in taxpayer dollars.

''We manage our capital in its aggregate,'' said Regions Financial spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

''We're choosing not to disclose that,'' said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

Banks mum on bailout funds - Business - MiamiHerald.com

WTF? The government pumps out hundreds of billions to jolt the economy, and the recipients don't even have to say what they are doing with it? How could that be? What are they doing with it, giving bigger bonuses to managment and shareholders?

The original bailout was supposed to be used to buy mortgages. They may have been damaged goods, but at least they were some form of assets by which the tax payer might get some return in the future.

Instead, the Bush administration through Treasury Sec Paulson has apparently just given away $350 billion with no strings attached and no conditions and not so much as a requirement that the recipients say what they are spending it on. Here. Have a few billion. Don't spend it all in one place. Yippee!

What happened to transparency and accountability that was supposed to be part of this deal? How could Congress pass this law without some degree of control or oversight into what the Bush adminsitration was going to do with it? After the last 8 years, you'd think they'd have a clue that they just couldn't turn the keys over to this administration and no expect them to handle it.

Hopefully I'm wrong about this, but this seems unbelievable. Like just an unbelievably huge tax giveaway to banks, their management and owners.

 

[americanwoman]

They were just saying on the news how Goldman Sachs recieved 10 billion dollars, claiming they needed it ASAP to survive. It came out now last week they gave Christmas bonuses exceeding 10.5 billion. HUH? :shock: We need to do something about this! It's our money they handed over, yet no one seems to care.

What happened to transparency and accountability that was supposed to be part of this deal? How could Congress pass this law without some degree of control or oversight into what the Bush adminsitration was going to do with it? After the last 8 years, you'd think they'd have a clue that they just couldn't turn the keys over to this administration and no expect them to handle it.

That is exactly what I am wondering. There is something stinking going on here but who cares, right? Certainly not the people who are going to pay for it it seems, but a select few of us. So far I have not heard of one bank using the money for what it was supposed to be used for and there is barely any outrage over it. Now most of these banks aren't saying anything at all. Nice. :roll:

 

[WI Crippler]

This is why McCain should have taken a stand against the bailout, regardless of whether it would have cost him the election or not. His duty to the American public(and Obama's too, IMO) should have been to oppose the knee jerk reaction to dole out hundreds of billions of dollars, with little oversight or accounting. The government should really be up to their elbows in the assholes of these companies right now. I'm a free market guy, but when the government bails your ass out like this, prehaps you don't deserve to exist in the free market anymore, and since you're being propped up, you can answer some accounting questions. We the people are your shareholders now.....

 

[Iriemon]

This is why McCain should have taken a stand against the bailout, regardless of whether it would have cost him the election or not. His duty to the American public(and Obama's too, IMO) should have been to oppose the knee jerk reaction to dole out hundreds of billions of dollars, with little oversight or accounting. The government should really be up to their elbows in the assholes of these companies right now. I'm a free market guy, but when the government bails your ass out like this, prehaps you don't deserve to exist in the free market anymore, and since you're being propped up, you can answer some accounting questions. We the people are your shareholders now.....

A bailout is one thing; but to just give these banks huge sums of money with apparently no conditions is not a bailout but a give away.

 

[BWG]

Oh, that's OK, as long as the rabble (aka the UAW) are under intense scrutiny and are forced to concede years of hard fought gains of a decent standard of living.

:shrug:

 

[Iriemon]

Oh, that's OK, as long as the rabble (aka the UAW) are under intense scrutiny and are forced to concede years of hard fought gains of a decent standard of living.

:shrug:

That's a good observation BWG. Everyone is up in arms and squawking about $25 billion to the auto industry and cracking on the unions. Meanwhile, the Bush admin doled out $350 billion to banks and their owners for big bonuses and dividends, and there's hardly a fuss.

I don't know if I'm more pissed off at the administration for doing this or Congress for trusting them.

 

[Keorythe]

For the original question, I wouldn't mind knowing if the money has been specifically set aside or just merged into the banks total assets. I'm guessing its the latter which would make sense but wouldn't allow for tracking. But the story doesn't really go into that much detail. And whats really sad is that its the only story on the subject. Seems like every other news outlet is re-printing the original AP story but not doing any footwork of their own. To be honest the money was thrown out there to boost market confidence. Tracking a specific dole of money is pretty tough there due to the large amount of trading.


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If the big 3 file chapter 11, we'll get a burp in the market which can still rebound back especially if they retool and become viable again.

If Wall Street tanks then the US is going down with it. Minor difference. :rofl

The bonuses issue is some half assed journalism considering that the bonuses have been on the books since the beginning of the year as and acrued expense. Ironically though, no one is picking up that those bonuses have been slashed drastically from last year.

Those checks will be smaller than the big payouts of recent years, however, according to Johnson and Associates, an executive compensation consulting firm, which has released a report estimating that Wall Street bonuses will be down as much as 70 percent compared with 2007.ABC News: Wall Street: Taking Bailouts, Giving Bonuses?


The UAW burnt their bridges with the US public when it became known how much they've contributed to the downfall of the big 3 and especially when they managed to tank a deal which would have gotten them ALOT more money/credit with the first deal.

Noo, the UAW isn't getting sympathy this year. Its going to be a while before people trust them or their members as anything short of money grubbers of the blue collar class. That just didn't fly with the rest of the blue collar class.

 

[rhinefire]

Considering the amount of the ONGOING "bailout" which originally was a three page document (my resume was two pages)and the very little amount of time it took to throw that money out (did I that money? I meant our money) does it not strike everyone that the whole matter is a kick in the people's groin? Where is the outrage? Why has massive protesting become a thing of the past? As long as citizens tolerate everything then everything will happen. The civil rights movement and the anti-Viet Nam demonstration WORKED.
We are getting what we deserve, but it beats me in view of the voting turn out for Obama why these same people are not up in arms over the childrens and grandchildren future. Bye-bye America.

 

[Oftencold]

I'm appalled that anyone over the age of 12 is surprised at this revelation.

 

[LML]

I am extremely proud that one of my senators was one of the few who actually voted against the bail out. What drives me nuts is if we talk about providing health care to the tax paying citizens it is called socialism. If we give some laid-off worker and his family food stamps people yell that we are practicing socialism. But give millionaires billions of our tax dollars and asking nothing in return is just considered good captialism. Go figure.

 

[Tecumseh1]

Ah, yes. Whose ingenius idea was it to give money to banks that are going bankrupt? Doesn't bankruptcy means that you failed? So the government likes to reward failure? Doesn't seem right to me. At least they could have done was monitor the money.

I'm glad the autoindustry bailout failed, otherwise I'd have something else to yell about.

 

[Maximus Zeebra]

Does this really come as surprise to anyone?

http://www.debatepolitics.com/polls/40383-where-all-money-coming.html

relevant poll..

 

[Jessica]

Ah, yes. Whose ingenius idea was it to give money to banks that are going bankrupt? Doesn't bankruptcy means that you failed? So the government likes to reward failure? Doesn't seem right to me. At least they could have done was monitor the money.

I'm glad the autoindustry bailout failed, otherwise I'd have something else to yell about.

I'm not sure many understand how this is all working. I'm not trying to insult anyone, as this is complicated stuff. Honest!

I'll try to explain.

The central banking system, which is now the Federal Reserve (the first central bank was dissolved by Democratic President Andrew Jackson in 1835 I believe) started in 1913. It's sole purpose was to create debt that cannot be paid back. Not ever.

There is money in the US. If there are actual dollar bills, then there is debt. If there were no debt, then there would be no money.

All the money comes from the Federal Reserve by way of loan. The government (treasury department) calls up the Federal Reserve and requests money. The Federal Reserve prints it and gives it to the treasury in exchange for treasury bonds, which is basically a note saying they will pay back the loan. Now, the Federal Reserve charges interest.

The part you must understand, is that there is no way to pay back the interest if there is no money, because the money is created from debt and it all comes from the Federal Reserve.

Now, so a bank wants to go into business - how does it get it's money? It borrows it from the Federal Reserve bank on a loan. So what happens when the Federal Reserve wants it's money back? Where are the smaller banks going to get this money?

That money never really existed. It was created. Electronically now. Even if the bank has the principal to pay back - where is it going to get the interest?

Now, so people borrow money to buy a house from the bank. It defaults on the loan, because of the loan guidelines set by the banks (moreso the Federal Reserve) which is actually not a realistic goal, as we've seen in the news lately. Lenders telling their clients they can afford more than they really can, and so on.

This happened with the prime real estate market. If you look at the very words, "prime real estate market", you may make sense of it. "Prime" as in a very good, top notch item. In this case, "real estate", or property. Then, of course, "market" for the buying and selling.

So who decides what is prime? How is that defined? By low-cost loans and property values set by ... who? You guessed it. The banks. The banks get their numbers from ... why? The Federal Reserve. They set the interest rates and so on.

Who owns the real estate? The banks. The Federal Reserve owns the banks through the promissory notes they're given in exchange for the loans to the banks.

It gets confusing, but the Federal Reserve, as they've done before in the turn of the century depression era, have created their own fiasco. JP Morgan Chase getting a loan from the Federal Reserve is funny, since it was Morgan himself in 1913 who help founded the Federal Reserve along with Rockefeller and the others.

They get money from the Government, who got the money from the Federal Reserve, and then they used that money to pay back the Federal Reserve.

They stole from themselves to give it to themselves but the Government (AKA the taxpayers of the US) are left holding the bag!

You know, foreclosing is actually not really legal? Consider a contract on a loan is that the person borrowing the money is putting up the house as collateral, and the bank is also suppose to put up collateral (which is called 'consideration') but since they put up no real money (as it's created out of nothing) there can be no legal foreclosure since the basic foundation of the loan (that the bank would supply a consideration) is never really met!

 

[Tecumseh1]

Thank you for the explanation, I didn't know most of that.

 

[BmanMcfly]

Ah, yes. Whose ingenius idea was it to give money to banks that are going bankrupt? Doesn't bankruptcy means that you failed? So the government likes to reward failure? Doesn't seem right to me. At least they could have done was monitor the money.

I'm glad the autoindustry bailout failed, otherwise I'd have something else to yell about.

I can't prove it, but I would wager that it was the central banks. The last numbers I heard was that the federal reserve has distributed in the area of 3-4 trillion dollars already not the 700 billion they originally asked for.

There is money in the US. If there are actual dollar bills, then there is debt. If there were no debt, then there would be no money.

Good post I just wanted to make one small correction :

The money would dissappear A LONG TIME before the debt dissappeared. If you took all the money in circulation, then multiplied that NO LESS THEN 3-10 times you would have our current debt load, and growing... interest works day and nigt.

 

[American]

So what the hell is Barney Frank doing about it?

 

[Tecumseh1]

Probrably putting his hand in one of the multiple cookie jars floating about within his reach.

 

[DivineComedy]

After the last 8 years, you'd think they'd have a clue that they just couldn't turn the keys over to this administration and no expect them to handle it.

Yes, we BOTH would think that.


Since our government’s fiscal discipline is disconnected with laws restricting bad creditors from issuing bad debt in excess of reasonable debt to income ratio, therefore, politically they were expecting failure, not doing anything to stop it, and seeing it as an opportunity.

“Under the so-called IndyMac plan, struggling home borrowers pay interest rates of about 3 percent for five years. Rates are reduced so that borrowers aren't paying more than 38 percent of their pretax income on housing. Bernanke suggested this threshold could be lowered to perhaps 31 percent of income, with the government sharing some of the cost.”
http://www.debatepolitics.com/us-pa...cans-caused-bad-economy-4.html#post1057840083

“Does the pond scum [Bernanke] have a plan for preventing usurers, who think a National Treasure Sweepstakes hidden in the attic is funny, from fornicating with his borrowers behind his back and thereby increasing the overall debt to income ratio above 38%?” (ibid)

10-19-05, 01:06 PM:

“Today, the average American family is earning $1,500 less than in 2000. At the same time, health care costs are up by nearly one-half, college tuition has increased by more than one-third, gas and oil prices have gone through the roof, and housing costs have soared. Life literally costs more than ever before – and our families have less money to pay for it. Three million more Americans have fallen into poverty since 2000. Average family debt is higher than ever. And as they lose the struggle to make ends meet, one out of every seven middle class families may be bankrupt by the end of the decade.”

The Democrats say that “Average family debt is higher than ever,“ but what are they going to do about it?

“Fiscal discipline. We must restore responsibility to our budget, or we will strangle opportunity for the next generation of middle class Americans. Over the last three years, record surpluses have turned into record deficits. Not once has this Administration tried to balance new spending with new savings or pay for new initiatives – including its enormous tax breaks for the wealthy. Today, we face unsustainable foreign borrowing and rising interest rates. Fiscal discipline helped create 23 million new jobs in the 1990s. Fiscal discipline frees up money for productive investment. And over time, fiscal discipline saves families thousands of dollars on their mortgages and credit cards.”

http://www.debatepolitics.com/archi...tform-strong-healthy-families.html#post119128

Iriemon I do respect your financial sense so analyze this sentence logically, in light of the predicted, “one out of every seven middle class families may be bankrupt by the end of the decade,” and please tell me how that works without a bailout:

“And over time, fiscal discipline saves families thousands of dollars on their mortgages and credit cards”