Post by Bozur on Nov 12, 2008 11:57:34 GMT -5
I say let these die out unless they are solvent on their own as there is no necessity to their existence.
This is not about "part of an effort to ensure that households and businesses have access to a broad array of borrowing options" but about bailing out lobbies that helped you got elected.
The best thing for households and businesses to have direct access to government or fed funding and take out the middle men (one that isn't solvent to begin with and annual 25% interest, on loans that cost them several percent annually, might be part of it).
This has to be made so it works more in favor of average people and doesn't make them pay back three time the amount they borrowed (which in itself is extortion).
One more time
TAKE OUT THE MIDDLE MAN
________
www.washingtonpost.com/
This is not about "part of an effort to ensure that households and businesses have access to a broad array of borrowing options" but about bailing out lobbies that helped you got elected.
The best thing for households and businesses to have direct access to government or fed funding and take out the middle men (one that isn't solvent to begin with and annual 25% interest, on loans that cost them several percent annually, might be part of it).
This has to be made so it works more in favor of average people and doesn't make them pay back three time the amount they borrowed (which in itself is extortion).
One more time
TAKE OUT THE MIDDLE MAN
________
Federal Bailout May Include Credit Card, Loan Companies
By Howard Schneider
Washington Post Staff Writer
Wednesday, November 12, 2008; 11:14 AM
U.S. Treasury Secretary Henry M. Paulson Jr. said he wants to expand the government's $700 billion bailout program to include credit card, student loan and car loan companies, part of an effort to ensure that households and businesses have access to a broad array of borrowing options.
In a speech this morning, Paulson laid out his priorities for some $350 billion of the bailout fund that remains uncommitted. Much of the first half was used for direct capital investments into banks.
The remainder, Paulson said, should be used to reinvigorate the market for credit cards, student and auto loans -- which combined account for some 40 percent of consumer credit.
"This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said.
His comments amount to a significant shift in the use of the bailout fund from a program to remove troubled loans from the books of financial institutions, and into an effort to support household and business spending at a time when both are in decline.
Paulson said that the original plans for the Troubled Asset Relief Program -- to buy bad mortgage loans from banks -- has now been shelved in favor of other uses for the money.
Originally "the focus was buying illiquid assets," but now "this is not going to be the focus," Paulson said. In planning how to use the rest of the TARP funds, Paulson said that supporting consumer lending emerged as one of the top priorities.
The details are still to be worked out, but Paulson said that his broad idea is "a program of liquidity that would make financing available."
His comments came as the nation's top economic agencies today launched an effort to prod banks to lend more freely to businesses and households, while curbing the amount of money spent on executive compensation and dividends for stockholders. Their statement offers the most specific guidance to date on how federal regulators want banks to behave during the current economic crisis.
In a statement issued by the Treasury, the Federal Deposit Insurance Corp., and the Federal Reserve, the statement said that bank supervisors -- the regulatory officials that oversee banks -- would begin analyzing whether the lending policies of individual institutions have become so strict that they are denying creditworthy borrowers access to money and thus contributing to the country's economic downturn.
Just as loose lending standards had a "procyclical effect" when they helped inflate property values and provide funds to underwrite risky loans, the current environment may be pushing the envelope further than necessary in the other direction -- with tightened lending standards keeping even good loans from being made.
"The agencies have directed supervisory staffs to be mindful of the procyclical effects of an excessive tightening of credit availability," the statement said.
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