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Sunday, April 05, 2009

Administration Won’t Allow Banks to Return TARP Money

Scary stuff.

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn’t much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street’s black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell ‘em what to do. Control. Direct. Command.

It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration’s thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash—which was often forced on them in the first place—the Obama team can work its will on the financial system to unprecedented degree. That’s what’s happening right now.

Here’s a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He’s been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with “adverse” consequences if its chairman persists. That’s politics talking, not economics.

(4) Comments
Posted by Owen at 1542 hrs
Economy + Politics + Politics - General

  1. I saw this story yesterday. It was interesting. Did anyone see Glenn Beck last night? He was talking about Fascism and how we have gotten close to it in the past as well.

    Very interesting how the bank was threatened with severe audits - just like we saw with the forced loans that started all this stuff in the first place.

    Posted by .(JavaScript must be enabled to view this email address) on April 05, 2009 at 1815 hrs


  2. http://online.wsj.com/article/SB123879833094588163.html

    Make sure your money is not in a bank that received TARP money.  If it did Obama and his administration is controlling it.  Read the article.  What idiots, those who voted for this charlatan.

    Here’s the official list of institutions that Obama now controls:

    http://www.financialstability.gov/docs/transaction-reports/transaction_report_03-30-2009.pdf

    Get your money out while you can!

    http://www.taxdayteaparty.com

    Posted by TaxDayTeaParty on April 05, 2009 at 2033 hrs


  3. Tin hats and black helicopters. Anyone who believes a bank, no matter how small or big, wouldn’t deal a devastating public blow to the Fed and Obama Admin by going public with this is a fool. Straight BS.

    Posted by .(JavaScript must be enabled to view this email address) on April 06, 2009 at 0818 hrs


  4. You mean like this?

    Goldman Sachs (GS, Fortune 500), Bank of New York/Mellon (BK, Fortune 500), Wells Fargo (WFC, Fortune 500), JP Morgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) - all ‘mega-banks’ that the government forced to take bailout money - say they want to return taxpayer funds “as soon as practical.”

    But, they’re well aware no one will be permitted to return funds before completion of regulatory “stress-tests” of the major banks to determine how they would withstand a severe recession.

    “We want to return the TARP money as soon as possible. We feel more bullish about economic prospects broadly, but we recognize we can’t repay the money without the approval of the regulators,” said Goldman Sachs spokesman Lucas Van Praag.

    I know… I know… CNN is a right-wing nutcake source.

    http://money.cnn.com/2009/03/27/news/economy/tarp_takeback/index.htm?postversion=2009032721

    Posted by Owen on April 06, 2009 at 0822 hrs


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