govt won't accept tarp payback....

Discussion in 'Politics' started by manu1959, Apr 5, 2009.

  1. manu1959
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    manu1959 Left Coast Isolationist

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    government control and power is everything......


    By STUART VARNEY

    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.
     
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  2. Seraega
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    Seraega Member

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    Many contracts are written to prevent pre-payment. To prepay my mortgage requires a $4 service fee for every early payment I send. They've essentially lent this money with the expectation that a certain amount will be repaid with interest. If they allow the strong companies to repay early, they lose all the interest and are left with only the bad banks defaulting and we the American People would be stuck with even more losses.
     
  3. dilloduck
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    dilloduck Diamond Member

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    Was Tarp contracted in such a manner ?
     
  4. manu1959
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    manu1959 Left Coast Isolationist

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    so these banks want to pay the money back with interest....and you say no ....
    and they are being treatened with adverse consequenses.....


    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.
     
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  5. Seraega
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    Seraega Member

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    I don't know, I'm only making the point that there shouldn't be some faux outrage as though this is something unusual. The same banks that are whining about not being allowed to pre-pay probably have written their own contracts with the same clause enforced on their own customers.
     
  6. Peejay
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    Peejay BANNED

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    If you can't see the obvious partisan slant here, you must be on the same train.

    Bush forces money = Good

    Obama doesn't take it back = Bad

    Idoiotic.
     
  7. dilloduck
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    dilloduck Diamond Member

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    I bet you can prepay if you agree to pay the interest and penalties. You understand this is about the government controlling banks right ?
     
  8. Yurt
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    Yurt Gold Member

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    if was bush that didn't take it back that would equal bad as well...

    give a justification for why obama doesn't take it back instead of merely ranting about nothing
     
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  9. Seraega
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    Seraega Member

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    Some banks need to be controlled until we figure out a way to shrink them out of the "too big to fail" designation. Instead of breaking them up like the phone monopolies, Bush allowed them to consolidate, now the new administration has to try to fix the problem.
     
  10. dilloduck
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    dilloduck Diamond Member

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    It always works so well when the government tries to fix things . :lol:
     

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