Why the banks are not lending the money we gave them?

The simple reason is that people do not want to borrow it. The banks cannot force them to take a loan. Most Americans are already in debt and have no reason to take on more.

So the banks are stuck with all that money we gave them. And they cannot stand to see money laying around not being used for something. So they give out huge bonuses to their employees on Wall Street. Even though some of them had billion dollar losses this last quarter.

Perhaps our government should "borrow" all the money back that we gave them. Unlike borrowing from China, we would owe it to ourselves. Then they could take that money and put it in the hands of the consumers. This would be the best thing for our economy at this time. This would be much more preferable than handing out bonuses on Wall Street with our money.

That makes too much sense.

accounting for now.

If the banks were forced to recognize distressed assets, not a single one of them would be profitable right now.

Banks are trying to recapitalize themselves. They are still getting absolutely destroyed by mortgage losses. July, August, and September were the worst months so far and the commercial real estate collapse has begun. That is with some banks not foreclosing on properties because they would have to recognize the losses on their balance sheet this quarter and it would hurt their reserve requirements.

The banks are still getting annihilated with bad debt. They are hoarding money to prevent themselves from going into receivership. They are discouraging borrowing by charging high interest rates.

And they got a bunch of taxpayer money. But why could we not borrow it back from them and give them US Treasury notes in return? And then put that money into the hands of the consumers? Would that not be a better way to get our economy jump-started? Otherwise, I see us slipping deeper and deeper into a depression.

Is to do nothing with business, allow the ones that made bad decisions to fail. Allow the survivors to pick up the pieces and have a public works program that puts the unemployed temporarily in the service of the public sector managing the fallout and building infrastructure.

our #1 priority is putting people to work. They will spend whatever money it costs and will pay itself back with a decline in the deficits.

Is the result of 30 years of Reagan era propaganda that have made financial services the center of our universe.

We need radical change and radical ideas from this WH. We are not going to get them from Geithner or Summers.

:puke: :puke: :puke:

:dem:

I have not seen the documentation that small businesses are unable to get loans, on a large scale.

they will only lend to businesses that are really, really strong and have not suffered at all during this downturn....which is ludicrous.

http://www.nytimes.com/2009/10/13/business/smallbusiness/13lending.html?scp=1&sq=credit%20small%20business&st=cse

If the banks are refusing these loans, why cannot the SBA give the same loans? The banks appear to be the problem here? They are hoarding the money that we gave them, just as a poster above noted.

to sit on it.

"The banks are still getting annihilated with bad debt. They are hoarding money to prevent themselves from going into receivership. They are discouraging borrowing by charging high interest rates."

They are too paranoid to operate in this recessionary economy. It is up to the Government.

my hubby was laid off from a small business job because the owner couldn't get a damn loan from guess who, B of A. He said he had done business with them for years and was in good standing, but couldn't get a loan, so my hubby and others were laid off.

good credit union. I am so sorry your husband was laid off. The banks are not holding up to their part of the deal which was to start lending again. Summers and Geithner need to really get their acts together or those two need to be laid off.

Hope your husband gets called back very, very soon.

:hug:

They are on the side of the banks and that means they are part of the problem.

The banks are turning down clients with very good balance sheets and great credit and the banky give no good reason for the denial. And the few that are getting loans are being approved for about 1/3 of the amount they would have gotten in prior years. It is getting very frustrating for them. These business can't expand or improve since the banks are just using the government money for additional captial for themselves

our personal small business used to use credit lines to purchase items from manufacturers that had already been ordered by our customer base.

Those short term credit lines have all been canceled.

So we can't get the stuff our customers have ordered from us to deliver to them.

This is being played out X 1 million or more across the land.

to pay bonuses to their execs. :sarcasm:

Wall Street pretty much dictates the lending mood of the banks, since most loans are packaged and sold on the bond market. Since many mortgage-backed securities that were first overvalued have now become undervalued. As a result, lending guidelines have tightened to fit Wall Street's taste for risk. If/when the housing market stabilizes, the securities can be properly valued, and banks will start lending again. The catch-22 of that is that if banks started lending, it would unclog the stagnant real estate market and help stabilize housing prices.

If they cannot loan to the US Government, then who can they loan to??

I actually like the idea of playing "honest banker" with the american people as a route to stimulus.

Give a stimulus to the consumers. Put money into the Small Business Administration to loan to small businesses. Tell the banks, they are on their own. They still have the backing of the US Government with the Notes.

Now my personal opinion is that they should have been allowed to go under.

But anyway, the banks said to the government and the people: "Hey look, if we go under you all are farked, but if you lend us money we will recover and you will be better off because we won't just use this to shore up our reserves, we will also keep on lending".

The politicians, including Bush and Obama, bought into this. A good majority of the people I think thought it was BS, but anyway it passed.

So the banks got their money. Now they are saying "Thanks, but look if we loan it to you deadbeats, who caused this in the first place, we will just go under again, so we will just use it to shore up our reserves".

For some reason or another we have not yet taken to the streets to burn them out of their office buildings.

and the big banks and investment firms should have been allowed to go under. We should not have bailed them out.

The commercial mortgage disaster is just about to hit, and guess who was in on this? The community banks... just wait a few months, they were the main ones behind lending to every shady local contractor who wanted to build a mall.

Those guys are all going belly-up and its the local banks that did most of the lending.

The point is: Businesses should not be bailed out for bad decision making. If in fact the world would come to an end if the infrastructure of the banks disappeared, then fine, the government could have taken over Citi and B of A for nothing, wiped out the stockholders, and kept it afloat in daily operations until it could be auctioned off. Probably would have cost a billion dollars at most.

to rear its ugly head. When it happens, we will wish we had the money to save them. However, they will go under. They are not CitiBank.

I prefer D's to R's, but in the end they are both in the pocket of Big Business.

The world would have never came to an end. In addition to the cost, you have left the same decision makers in charge of the banks. The only thing we have done is guaranteed we will have another crisis. Probably sooner rather than later.

The big banksters and Wall Street are nothing but parasites.

there's lots of activity w/ investment banks with capital raises and IPOs heating up, not to mention a massive run-up in global stock indexes. Consumer banks still dealing with high unemployment, low loan demand, bad loans, regulation and taxation fears.... The TARP money wasn't meant for loans but to improve capital ratios.

Or did I just dream all of that?

the reality is that the investment banks all became bank holding companies and took the money as well. If you take away JPMorgan's trading operations they'd be operating at a significant loss. They lost 800 million on credit cards alone.

the problem of not lending is mostly with the community banks, right? Who's going to bail them out, once the commercial mortgage disaster hits?

They have taken a posture of no possible "bad lending". they are so stringent that even people with fantastic credit cannot et loans, people who will end up closing small businesses because of the lack of credit after 20 or more years functioning well. People who pay back their debt in a timely fashion.

It should have gone to the victims of the "Failed Institutions". Then that money would have circulated through the economy first, then ended up in the bank in the form of savings and paid back loans. The economy would have been kicked started and we would be that much further ahead in recovery.

but where did the money come from that drove the DOW up 3500pts in just 6 months? (that's a LOT of cash)

Was that not the TARP money? Some big banks have made huge profits lately, and it's not from loaning uncle Jim money for his Fig Plucking Farm...

just sayin'

I tend to be most entertained by Max:

Banks are terrorist organizations

I laugh so I don't cry.