Congress grills Bank CEOs February 11, 2009
Posted by loanarranger in Uncategorized.Tags: bailout, Bank CEOs, Congress, congressional hearings, ignorance, stimulus package, TARP
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Today we saw Congressional leaders show how little they know about the Banking industry. Lots of grandstanding about how Congress lent them money, but the CEOs are too ignorant in the use of our taxpayer money.
Congressmen complaigned about rising credit card interest rates, want the banks to show “compassion” to people that lost their jobs and are not making their payments, want them to charge less interest if people don’t make their payments, etc, etc. How silly, it is called business. We lent the Banks billions to keep them in business, but Congress wants them to make bad decisions in lending money.
Now don’t think I have any sympathy for banks at all—I don’t. They fail to keep themselves out of foreclosures by not being proactive. They still spend money on things they should not (just like other corporations, Congress, local governments, etc) by not cutting expenses, lavish “conferences”, etc…
Congress did have fun publically beating up the Banks today—but they also exposed their ignorance of the problem.
These credit card debts, school loans, etc are bundled up by the banks and sold to investors. In good times, they sell $100 worth of loans to investors for $115 or more. Now we have people losing their jobs, record numbers not making their credit card payments, etc — so what happens, the asset backed securities must be sold at a loss to get them off the Bank’s books. The Banks then have to increase interest rates and fees to make up these losses.
Now Congress comes out on TV and says give the consumer a break, if he can’t make payments, lower his interest rate, etc… Does this make sense?
Read this article http://www.irishtimes.com/newspaper/finance/2009/0211/1233867932143.html
So as the FED pumps more TARP money into the banks(“In an attempt to kick-start the asset-backed securities market, the Fed plans to expand the $200 billion it has already earmarked to lend to investors such as hedge funds on favourable terms to as much as $1,000 billion”), and the banks are forced to make bad decisions–who is on the HOOK —- of course, both you and me and every taxpayer. This is not good for the taxpayer or future interest rates.
Congress just came back from Stimulus package negotiations, and guess what—they took out the $15,000 tax rebate for homebuyers(which is very disappointing for people wanting to sell their homes to prevent foreclosure), took money from schools — but left in all the social program spending that many say will not create jobs for a long time–if at all.
Stimulus Package? February 11, 2009
Posted by loanarranger in Uncategorized.Tags: depression, Obama, Pelosi, pelosi chart, recession, stimulus, stimulus package
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As I watch the Congressional hearings with Tim Geithner, the discussions about the $800 TRILLION plus stimulus package, Obama press conference yesterday, and Congressmen describing what is wrong with the package — Is it wonder the general public is confused? Is this actually a plan to confuse the public?
Nancy Pelosi showed a dire looking chart in Congress to prove that the economy is the worst since —the 1990’s, 1980’s, 1970’s, great depression, civil war–or the birth of Christ! This Chart by Nancy Pelosi was shown to be misleading within minutes on the internet. http://curiouscapitalist.blogs.time.com/2009/02/09/comparing-this-recession-to-the-last-five/
All these claims have been made to panic us to get support for this package.
One comparison to show how much money we are spending —- JUST how much is 1 Trillion? Not $800 Trillion, just ONE! If we started spending ONE million dollars A DAY, every day since the 2009 years Christ was born, we STILL would NOT reach one Trillion—only 730 Billion.
Why does this matter to us–the poor taxpayer? One criticism has been that (now multimillionaire tax cheat Daschle) was caught putting Billions into the stimulus bill to pass government medical care. Others that have looked at the 800 pages of the Bill have found many programs that put billions to city and State government projects, that will not creat jobs quickly. Many Billions are in there from social programs(even the senate put INTO the bill that new workers can be illegal aliens).
Why is this important — because our president came on TV, looked into the camera and said—there are no pet projects or PORK in this stimulus package. This, for me, was very disappointing, because I want to believe our president. I sometimes feel like this is a movie—where we get conned by a slick politician.
Of course he was talking to the general public, that has NO time for finance or politics—they just want to trust this president because he said he was different—he was looking out for them, not the Fat cats!
As Congress works on the bill today, they are taking out homebuyer relief, taking out mortgage relief, reducing money direct to the taxpayer —- but leaving in hundreds of BILLIONS of social programs—this is disgraceful! Could not ONE reporter ask about this instead of the silly softball questions that were asked? Can’t we get a reporter to look inside this Bill?
How is this $800 TRILLION spending bill going to impact our long term economy, home buying market, taxes in the future? Right now the Bush tax cuts for everyone will expire and EVERYONE’s tax bracket will increase in 2010 –for starters. How is this tax increase on everyone going to affect us if we are still in a recession in 2010? Will these tax increases cause a depression—just like the 1930’s when taxes were increased?
Will we end up like Japan that tried to spend its way out of recession === and STILL has not recovered from the 1990’s? Will home prices fall for years until Americans have the money to purchase a home?
