Banks Want a Bailout Do-Over
Anyone who has ever cashed in a Certificate of Deposit knows banks are adamant about extracting a penalty for early withdrawal but now, in repaying taxpayers, they are whining about the rules.
According to the New York Times, “Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money.”
In a perverse way, it’s reassuring that the financial crunch has not altered the basic rule of banking–to squeeze every last cent out of using other people’s money for their own profit–but it also casts doubt on the government’s convoluted plan to save the money lenders from their own greed and error.
“You will be seeing additional actions by the administration,” the President said after a meeting yesterday with his advisers to discuss results of the bank stress tests and the $500 billion to $1 trillion plan for public subsidies to encourage private investors to buy mortgage assets.
That proposal has been characterized by Nobel Prize economist Joseph Stiglitz as “ersatz capitalism, the privatizing of gains and the socializing of losses. It is a ‘partnership’ in which one partner robs the other.”
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3 Responses to “Banks Want a Bailout Do-Over”
So… does this mean that BofA will sell its toxic assets to Citi and Citi will sell its toxic assets to BofA, subsidized at the expense of the US taxpayer.
I made a comment earlier about not liking some of Obama's plans…. so this is one that I don't agree with. (Happy, AR?)
Let's see…. some Republican leaders, on the other hand, were calling for the nationalization of the banks…. I like that even less (and it would cost Americans far more even if the only “charge” was the share holders' equity being wiped out for the millions of shareholders (including bank retirees) who own bank stocks. But nationalizing banks would have cost far above the shareholder equity loss.
This is an example of where the Republicans should come up with another plan to the Democrats, instead of proposing something that would never happen (even on their own watch). This is why I feel the Republicans are letting America down because there is no legitimate or organized proposal to Obama's plans. It seems that not only do Republicans want Obama (and the nation) to fail, but they really really want the nation to fail. Otherwise they would come up with a good and serious plan. Doesn't even have to be perfect- the perfect plan might be something between the Republican's plan and the Democratic Party's plan.
But I don't like one party setting all the rules…. even though I also understand the Dems accepted all the Republicans' proposals for the stimulus package back in Feb. but the Republicans still didn't vote for it. If the stimulus DOES fail the Republicans will be hard pressed to explain that: “We offered other proposals, and the Dems included everything we wanted, but we still didn't vote for it and the plan still failed.” The Republicans can't even say that the Dems didn't listen to them.
[...] News Sources wrote an interesting post today onHere’s a quick excerptAnyone who has ever cashed in a Certificate of Deposit knows banks are adamant about extracting a penalty for early withdrawal but now, in repaying taxpayers , they are whining about the rules. According to the New York Times , “Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money.” In a perverse way, it’s reassuring [...]
Didn't they sign contracts for this?
Weren't signed contract the reason they had to pay themselves huge bonuses?