Our wonderful banks
They made some "bad decisions", got bailed out by our Congress and now what are they doing with the bailout money? Not what was intended of them.
From the
New York Times:
So When Will Banks Give Loans?
�Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?�
It was Oct. 17, just four days after JPMorgan Chase�s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual.
Which, of course, it also got thanks to the federal government. Christmas came early at JPMorgan Chase.
The JPMorgan executive who was moderating the employee conference call didn�t hesitate to answer a question that was pretty politically sensitive given the events of the previous few weeks.
And the answer to that question:
�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.
Christ on a corn-dog. The money was intended to jump-start the economy by it's being available to people in the form of loans. It was not intended to be used to secure the positions of the individual banks and allow them to go garage saleing...
It simply reinforces our decision when this whole thing started to take all of our money out of the banks we were using and put it into a local Credit Union. We had accounts at BofA and WAMU and now, most of them are closed out with the few remaining scheduled for closure next month.
The tellers and clerks have been very understanding and I really like them and that branch but this kind of fiscal rot at the top must not be tollerated...
Posted by DaveH at October 30, 2008 7:31 PM