In a message dated 10/22/2008 12:42:46 A.M. Eastern Daylight Time, [EMAIL PROTECTED] writes:
Mario these links don't address what I'm talking about. The first column wasn't even addressing the 700 billion bailout until the last line. The column was about the recent infusion of money directly to the banks for lending. Different dollars. ================================= Recent infusion was 8 days ago, Oct 14. from the other link: Banks keeping capital in-house DIANE SWONK, Chief Economist, Mesirow Financial: You know, there are very marginal signs of a thaw. I think the real important issue here is, as we already noted, that banks are finally lending to each other, but we're not seeing it on Main Street yet. JEFFREY BROWN: And, Andrew Sorkin, what do you see out there? What's your reading? ANDREW ROSS SORKIN, New York Times: Well, I think that we are seeing the right steps being made. But at the end of the day, you know, they may become -- they're advertised as if they're a quick fix, a silver bullet, and they're not. And I think that consumers and Main Street need to appreciate what we're really getting ourselves into. You know, the Treasury is giving $250 billion to the banks ostensibly to lend out, but it's not going to come to you or I anytime soon. In fact, more often than I'd like to say, they're going to keep that money and hold onto it, in part because they are expecting to have losses, and so they need that capital. JEFFREY BROWN: Explain that a bit, Andrew -- I'm sorry -- because you wrote today in your column that banks were actually hoarding the money, holding onto it. ANDREW ROSS SORKIN: Well, that's exactly right. They're going to be getting this capital from the government, ostensibly, as I said, to lend it. However, they're not going to use it for that purpose, at least in the immediate term. They're going to use it and hold onto it, in part because they're expecting losses at their own firms. And so they have capital requirements, which means they have to have a certain amount of money in the bank. And if they know that they're going to be losing money in the future, they need to hold onto that money. The other thing that some of them may do with that money is go out and make acquisitions and buy other banks. Now, that's not a bad thing, because it will make some of these banks stronger, but it means that you will not be getting this money into your pocket anytime soon. JEFFREY BROWN: Now, Karen Petrou, I mean, we talk about banks in a general way, and I think we're all coming to realize that there are banks and then there are banks, right? I mean, some banks are in real trouble, some not. Some are huge. Some are small. I mean, how do you think about what's going on in the banking world right now? KAREN SHAW PETROU: I think it's a very unsettled time. And I agree with Andrew about the uses to which the banks will put the money. I really do wish that the banks were putting the money into the economy or propping themselves up. It troubles me very much that Treasury is going to let banks use this money to buy other banks. We don't need bigger banks; we need stronger banks. If a bank can afford to buy another bank profitably, it should do that with its own money, not with ours. And if it's in that weak of a condition, then we need to face up to that, hand it over to the FDIC, and let's move on. We've got to be very disciplined in how that $700 billion is used. It's a critical, critical decision for getting the economy going. **************Play online games for FREE at Games.com! All of your favorites, no registration required and great graphics – check it out! (http://pr.atwola.com/promoclk/100000075x1211202682x1200689022/aol?redir= http://www.games.com?ncid=emlcntusgame00000001) [Non-text portions of this message have been removed] ------------------------------------ Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/AsburyPark/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/AsburyPark/join (Yahoo! ID required) <*> To change settings via email: mailto:[EMAIL PROTECTED] mailto:[EMAIL PROTECTED] <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
