Wasn't the bail out measure supposed to free up the credit markets for laons? JP Morgan Chase got 25 Billion in what were told was a financial bail ut measure to stimulate the credit crisis, meaning basically banks weren't loaning and that was hurting so putting up this tax payer money was going to get them back on track with lending, What a JP Morgan Chase executive said was quite contrary at a meeting held shortly after the bail out, he didn't know the conference call number had been given to a reporter but here's a brief excerpt
“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”
Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.
So apparently not only did tax payers get hosed but lied to as for the easons for the hosing
What do you all think about this
It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction.
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I think the problem is that there is no provision in the bailout that forces lenders to continue to give loans to people. So now other financial institutions are just buying up failings bank hoping they can turn around those failed banks. Basically they aren't doing what they're supposed to do because they don't have to, and no one is regulating them enough.
