Geithner Wants Banks That Got Government Bailouts To Increase Lending

• November 20, 2009

Dow Jones News is reporting this morning:

U.S. Treasury Secretary Timothy Geithner on Wednesday called on banks that received government aid during the financial crisis to boost lending, saying limited credit to small businesses may slow the nation’s recovery. “We need banks to be working with us, not against recovery,” he said, kicking off a day long Obama administration summit aimed at devising ways to strengthen the flow of credit to small businesses. Geithner said banks bear at least some responsibility for the financial crisis and, therefore, are obligated to help communities recover. Small businesses are typically more reliant on bank financing than their larger counterparts. “When banks pull back, small businesses take the hardest hit,” Geithner said. Treasury’s latest monthly survey of bank lending shows the 22 largest banks receiving government capital during the crisis tightened lending for the fifth time in the past six months, with total outstanding loan balances falling 1% in September. Small business lending also dipped 1%, as did originations of new small business loans. Small business loans outstanding have slid by $10 billion since April, down to $259 billion in September, the report showed.

I didn’t know whether to laugh or cry when I read this story.
It appears that the U.S. Treasury Secretary is asking banks that received government aid to start more aggressive lending practices in order to help the recovery. Think about that for a minute. The same banks that were wildly irresponsible in their lending/risk management that brought us to the brink, are now being asked to loosen their standards again. What’s more sad/comical is that Geithner somehow believes that they’ll do it just because it’s the right thing to do rather than for profit motive, which is what all companies work towards.
Banks are essentially getting free money right now and either lending it to the most rock-solid of customers or parking it in U.S. Treasuries, where the U.S. government pays interest on the money that it is lending to these same banks for nothing, guaranteeing them a profit without risk. While they may earn more by lending it out, they’re still trapping a tidy profit with zero risk by buying Treasuries. This is the same government that is talking about using $200 billion in unused TARP funds to put towards deficit reduction.
Huh?
They want to take taxpayer dollars that were borrowed indirectly from mostly the Chinese and pay down the debt? Does that make sense to anyone? How about just not borrowing the $200 billion to begin with? I guess the current administration believes most of us are idiots as these kinds of political shell games where they claim to be addressing the national debt are farcical.

Tags: Asshats, Domestic Issues, Politics

http://www.fairytalebaby.com/ Jason wilder

geithner looks like a 14 yr old boy seeing his first set of boobs!
sayanything-203

Lock ‘em,

We bailed ‘em out so they could stay in the business of lending in a time when the money supply was tightening way too much.

I wonder if you could explain this statement and provide some documentation for what youâ€™re asserting here. For example, are you using M-1 or M-2 as your standard to measure the money supply reduction you refer to?

I ask because according to the Federal Reserve during the 52 week period through November 2008 M-1 grew at a seasonally adjusted annual rate of 15.1% and M-2 grew at a seasonally adjusted annual rate of 6.6%. And in the 26 week period ending in May of 2009 the M-1 growth rate was 11.2% while that of M-2 a more modest 1.1%.

None of which figures represent a shrinking money supply as you’ve asserted.

So… which days of economics, or finance, classes did you miss? Or is the problem simple arithmetic instead?
http://fu.com/ robert108

Like any fascist, Geithner expects the businesses he controls to do what he tells them to do. If it had really been a “bailout”, then he would want them to exercise good business practice, and with the private sector under attack, lending is unwise.
Of course, Geithner is part of the attack on the private sector. This is just fascist vote-buying.
This administration is totally responsible for the present state of the economy, but they keep trying to shift the blame elsewhere. Lefties hate to take responsibility for the consequences of their policies.
sayanything-203

You’re welcome! Obviously you needed it. Hope it does you some good. It really does help to know what you’re talking about.
lock’em’up

“them, based, presumably, on” Thanks for the lecture on English usage.
sayanything-203

Randy-G,

You are very kind. I learn as much or more here than anyone, balancing what I know (or think I do) against the ideas of others. Besides, I’m probably older than almost everyone else here. That ought to count for something.
sayanything-203

My apologies for the errant “blockquote”, guys.
sayanything-203

The Bailout was a Bush deal, as was the beginning of the stimulus; not a geitner deal.

At the time of TARP (which says nothing about bailing out automobile manufacturers!) and the bailouts of Fannie and Freddie, Goldman, and AIG, Tim Geithner was president of the Federal Reserve Bank of New York. He was intimately involved in all these decisions, including the decision to allow the Lehman Brothers firm to fail.

The so-called “stimulus”, all $787 billion of it, was Obama’s as Randy-G has rightly pointed out.
lock’em’up

The Bailout was a Bush deal, as was the beginning of the stimulus; not a geitner deal.
lock’em’up

Dude, ya missed a couple days of economics, huh?

We bailed ‘em out so they could stay in the business of lending in a time when the money supply was tightening way too much. If they aren’t going to make reasonable loans, they have no value. Sure, they shouldn’t go nuts like they did with Bush in office, but come on. There are doctors with 800 fico scores that are being told they need big down payments to buy a new car.

Clearly, Rob, you can do better than this type of post. There are enough real problems to cover. You don’t need to keep saying, “dang, dem librals shoor are stoopid.”
sayanything-203

The m1 and m2 are interesting, but to people who need loans, it was hard, and is hard, to get money.

Lock-em,

Vocabulary, diction, grammar, and yes, spelling, are all important. You can’t possibly expect others to take you or what you say seriously when you are known to be slovenly in how you think and how you communicate.

Just as importantly, you appear to be on the notion that “people who need loans” ought to have them, based, presumably, on need alone. That’s exactly the sort of witless nonsense that ultimately caused the housing bubble, the mortgage meltdown, and the overall credit crisis to begin with.

The unrealistic stupidity of that line of thought is also finding current expression in the Left’s insipid, counter-productive attempts at healthcare “reform.” The results in either case are higher costs, not lower, and rationing.
sayanything-9974

Dude ya missed a couple of days of civics, huh? Governments role is not to bail out ANY business.

The bail out was to handle the toxic assets. Where did all that money go – they are still talking about the bad loans. Over a hundred twenty banks have failed and closed this year.

The sub-prime loan collapse was caused by the Government getting involed, dating back to the Carter era (Community re-investment aCT). Barney Frank, Maxine Waters, and Gregory Meeks ignored and chided regulator warnings in 2004. If the banks hadn’t been forced to make ‘risky loans’ the bubble would never have been created and subsequently burst. (Problem: government involvelment in a free market not under regulation)

The current administration wants more money but they haven’t been able to account for the money already spent. The are “errors”(fraud and lies) in the reporting details for the stimulus money and jobs. We were just informed that accounting is not an” exact science” (tell that one to the IRS), we were told that the porkulus spending bill must be passed immediately to keep unemployement below 8%. (Obama Hope and Change in Action)

Clearly the people in charge are clueless and unaccountable. They have been wrong about every proposal and prediction. Now they want more money. When thier accounting gets even “ballpark” exact and they point out the relevant parts of the constitution that provide for their agenda then we should resume debate about money. These guys make drunken sailors look financially responsible by comparison. I suppose everything is still Bush’s fault. That dead horse was removed when the OBAMA happily signed the PORKULUS spending bill. But Barry keeps digging it up and beating that same old carcass.

I think you missed a couple of days in economics yourself – Read it slow and often.
YOU CAN NOT SPEND YOUR WAY OUT OF DEBT.
lock’em’up

Vocablulary, and spelling. The credit supply was tightening too much. The m1 and m2 are interesting, but to people who need loans, it was hard, and is hard, to get money.
sayanything-6955

I am getting older too Bat, but still a student.
sayanything-6955

The 787 billion stimulus was all this admins deal Lockjaw. Tarp started under bush, none of the stimulus did.
sayanything-6955

Treasury needs some new blood, “turbo tax” Tim is responsible for current policies. The, I inherited this mess mantra is not flying anymore! And at least a few are calling for his head.
http://gatewaypundit.firstthings.com/2009/11/tax-cheat-geithner-urged-to-step-down-during-house-hearing-refuses-video/
bikebubba

Keep in mind here that taking TRAP (“oops,” TARP) money was not voluntary on the part of banks. So what we’ve got here is the world’s largest deadbeat, headed financially by the world’s most famous tax cheat, trying to call the shots at the heart of our financial system.

Liberal or conservative, this ought to scare the snot out of you. TurboTaxTim is more or less TRYING to set the stage for the next recession or depression.
sayanything-6955

Your financial insight has been missed Bat. I, for one am glad you have returned to teach those of us who are teachable.

SayAnythingBlog.com

Geithner Wants Banks That Got Government Bailouts To Increase Lending

Create a SAB Readerblog

Recent Comments