The Treasury Department, which is overseeing the massive capital injection program along with the rest of the bailout, will pour $125 billion into nine of the country's largest banks, which account for 50 percent of all U.S. deposits. Anthony Ryan, Treasury's acting undersecretary for domestic finance, said the first payments went out Tuesday. An additional $125 billion will start flowing to other banks within days, he said.
"As these banks and institutions are reinforced and supported with taxpayer funds, they must meet their responsibility to lend, and support the American people and the U.S. economy," Ryan told the annual meeting of the Securities Industry and Financial Markets Association. "It is in a strengthened institution's best financial interest to increase lending once it has received government funding."
Rep. Henry Waxman, D-Calif., chairman of the House Oversight Committee, asked the banks getting the $125 billion to detail what they are paying their executives and employees, including bonuses.
"I question the appropriateness of depleting the capital that taxpayers just injected into the bank through the payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record," Waxman said.
The infusion of federal money is to rebuild banks' battered capital reserves so the institutions would feel comfortable resuming more normal lending practices. But that confidence was undercut somewhat when reports surfaced that bankers might use the money to buy other banks. Indeed, the government approved PNC Financial Services Group Inc. to receive $7.7 billion in return for company stock on Friday and, at the same time, PNC said it was acquiring National City Corp. for $5.58 billion.
There is little federal officials can do about it. There is no language in the bailout bill that specifically obligates banks receiving money to increase their loans. Officials had argued that attaching strings to the capital-infusion program would discourage financial institutions from participating.
"The way that banks make money is by lending money," Perino said. "And so they have every incentive to move forward and start using this money."
http://news.yahoo.com/s/ap/20081028/ap_on_bi_ge/financial_meltdown
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Out-fricking-standing. "Corporate welfare" is right, you earn it for breathing.
"You a bank?"
"Yeah."
"Want some $$$$$$$$$$"
"Yeah"
"OK--you gonna lend that to main street right?"
"Nah--but tell you what, slap a fine on me, drive down the value of that stock you just bought. Bitch"
Hey waxman, "being too big to fail" means never having to say you're sorry. They could buy Sudanese slaves to wash their feet in front of your committee, you gotta look the other way--RIGHT? letting banks fail is part of our discredited fringe wacko rightwing ideology.
The core joke of Hitchhiker's Guide to the Galaxy is that of course no civilization would develop personal computers with instant remote database recovery, and then waste this technology to find good drinks.
Steve Jobs has ruined this joke.
