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Well, we've established your ignorance of corporate finance, at least.
Institutions that are profitable rarely borrow money except on a short term basis to manage cash flows.
celticlord said:When they do borrow, it's for business expansion--i.e., to ramp up a line of business that has yet to turn a profit.
celticlord said:Ditto for raising capital via the stock market: the goal is to grow the business (or segment thereof) to a point of profitability.
Profitable businesses that borrow lots of money generally don't remain profitable for very long.
Well, we've established your ignorance of corporate finance, at least.
Institutions that are profitable rarely borrow money except on a short term basis to manage cash flows. When they do borrow, it's for business expansion--i.e., to ramp up a line of business that has yet to turn a profit.
Ditto for raising capital via the stock market: the goal is to grow the business (or segment thereof) to a point of profitability.
Profitable businesses that borrow lots of money generally don't remain profitable for very long.
Profitable businesses use financing for either short term cash management or long term business expansion.
I have not found a single lefty on this sight with a ****ing clue. ~wave
That's exactly what the IMF is doing here. They're expanding their business (i.e. lending more money to nations with distressed currencies, since there are a lot more of them now).
Isn't that why they are on government life support?Did Citibank make hundreds of double digit billion dollar loans without thinking much of it?
Isn't that why they are on government life support?
Ah, the but the question is on private financing. The Federal Reserve for intensive purposes is the government. While it is financed outside of Congress, its members are approved by Congress and it is subject to Congressional oversight.
Did Citibank make hundreds of double digit billion dollar loans without thinking much of it?
What the IMF is doing is particularly evil right now. Because countries are distressed, they take out significant IMF loans. As country specific programs are still less than ideal, the one size fits all is still somewhat in effect. Thus, the IMF can squeeze more than normal to extract significant profits from these loans over the course of the loan.
obvious Child said:What I don't quite get is why certain people are complaining since what the IMF is, is really just a vanguard for Western business, breaking down the obstacles to entry and allowing US and European firms to enter markets formerly hostile to them. Bleeding heart liberals should be offended by this, but I'm not one of them.
The IMF is the "lender of last resort" and is not intended to be a charity. If the IMF can "squeeze more than normal to extract significant profits," fine. That's supply and demand. The IMF exists only to help stabilize currencies. Governments looking for developmental assistance should look to the World Bank, to charities, to foreign governments, or to the private sector. That isn't what the IMF does.
You sound pretty offended by it...
The IMF plays a useful function in the global economy. It is not good for international trade if currencies are extremely volatile, and no one ever knows how much they're going to get paid from their foreign debtors. The IMF was created to eliminate some of the exchange risk and help nations stabilize their currencies. The results of these loans are not always pretty, but they're necessary.
The IMF is the "lender of last resort" and is not intended to be a charity. If the IMF can "squeeze more than normal to extract significant profits," fine. That's supply and demand. The IMF exists only to help stabilize currencies. Governments looking for developmental assistance should look to the World Bank or to the private sector.
You sound pretty offended by it.
The IMF plays a useful function in the global economy. It is not good for international trade if currencies are extremely volatile, and no one ever knows how much they're going to get paid from their foreign debtors. The IMF was created to eliminate some of the exchange risk and help nations stabilize their currencies. The results of these loans are not always pretty, but they're necessary.
They were against making crappy loans but were forced to loan anyway.
Over the past 30 years. Seriously. Stop acting like a hack. The IMF and World bank have made large numbers of huge loans to countries.
"Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 36013619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982.
The Thirteenth Amendment?
"1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
A bank violated this by using common sense in it's lending practices?
How?
Citibank CRA loans never ever even came close to a single normal loan issued by the IMF.
Remember that total CRA loans in aggregate for the entire country never at any time exceeded $20 billion. Mexico got $50 billion during its 1995 crisis.
Not sure what was the point of that post. Citibank is suffering from a variety of problems.
Lack of foresight, bad management, bad decisions and essentially bad accounting are screwing them.
It is not too big to manage efficiently.
Crappy managers dont have much luck managing efficiently period
especially hamstrung by being forced to make crappy loans.
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