So...governemt forced lending led to the recession... - DFWstangs Forums
 
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post #1 of 19 (permalink) Old 12-14-2009, 12:01 PM Thread Starter
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So...governemt forced lending led to the recession...

...and now they want to force banks to make bad loans again!
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President Obama is calling on the financial industry to help dig the economy out of the pit the White House says it helped create, as the president and bank executives headed into a potentially tense meeting Monday morning.

The president set the tone for the meeting in an interview broadcast the night before in which he called Wall Street bankers "fat cats" whom he has little obligation to help. In response, the bankers plan to tell the president to stop oversimplifying their concerns.

But the president is expected to argue that because Wall Street has already received significant aid from the federal government via the $700 billion bailout package passed last year, it in turn has an obligation to help jump-start the rest of the economy -- by boosting lending to small businesses and getting on board with a sweeping financial regulatory reform package.

"What the president's going to say to the bankers is, you guys were part of the problem, you helped create an economic crisis here that cost 7 million Americans their jobs and now you have to be part of the solution," White House senior adviser David Axelrod said on ABC's "Good Morning America."

Axelrod said the industry has to "accelerate lending to credible small businesses" and suggested Congress would take harsh action against the sector if it does not.

"People are not going to tolerate a situation where the bankers have a party, they pick up the tab and then the bankers pay themselves huge bonuses and they're not lending," Axelrod said, adding that bankers should be awarded with long-term stock as opposed to up-front cash bonuses.

The White House also wants Wall Street to fall in line with Obama and back a proposal for a consumer protection agency that cleared the House last week.

"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Obama told CBS' "60 Minutes" in an interview that broadcast Sunday.

The executives planned to stand up to the president on issues they say his statements oversimplify -- particularly the creation of the Consumer Financial Protection Agency

"He can say what he wants, but we're not going to go back to the kind of lending that put us in this mess," said a person who is helping prepare executives for the meeting but spoke anonymously because of lack of authorization to discuss the plans.

A dozen executives were on the list of those coming, from Bank of New York Mellon Corp., Bank of America Corp., U.S. Bancorp , JPMorgan Chase & Co. The heads of Morgan Stanley, Goldman Sachs and Citigroup were expected to attend but had to appear via teleconference because of inclement weather in New York City that prevented air travel.

Citigroup announced Monday that it is repaying $20 billion in bailout money it received from the Treasury Department, in an effort to reduce government influence over the banking giant. The government will also sell its stake in the company.

The New York-based bank was among the hardest hit by the credit crisis and rising loan defaults and got one of the largest bailouts of any banks during the financial crisis. The government gave it $45 billion in loans and agreed to protect losses on nearly $300 billion in risky investments. Wells Fargo & Co. remains the last national bank that has yet to pay back its bailout money.

Republican Party Chairman Michael Steele said Monday that Obama "should recognize that banks aren't going to lend money to people who won't pay them back. Banks can open the floodgates of cash, but you have inability of small business owners to pay back the loans."

Steele said on NBC's "Today" show that less regulation would return many small businesses to profitablity.

"They're up against the wall," he said, with regulations coming from the state and national governments. "Let's eliminate the capital gains tax, reduce the unemployment tax and give some incentives for small businesses."

Bankers expected the regulatory overhaul to provide the meeting's most contentious moments.

They believe the president has mischaracterized them as being against the new rules, when in fact they support the vast majority of the administration's proposals.

"These same banks who benefited from taxpayer assistance ... are fighting tooth and nail with their lobbyists up on Capitol Hill, fighting against financial regulatory control," Obama said in the "60 Minutes" interview.

One industry official said Obama is viewed as trying to paint the debate as either "You're with us or you're against us." The industry official said bankers did not view it that simply.

"We want him to know we have the same goals, but disagree about how to get there," the official said.

Bankers were planning to outline alternatives to the new consumer agency. Most lenders support strengthened consumer protections but believe the administration proposal would increase costs and create more gaps between regulators.

Many firms have taken steps toward the administration's goals of tying pay to long-term performance and making sure companies do not encourage risky bets. Bowing to public outrage, Goldman Sachs announced Thursday that 30 top executives will receive long-term stock instead of cash for bonuses this year.
http://www.foxnews.com/politics/2009...s-eve-meeting/

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post #2 of 19 (permalink) Old 12-14-2009, 12:08 PM
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A bank can tbe expected to lend to people that will not pay the loans back.

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post #3 of 19 (permalink) Old 12-14-2009, 03:41 PM
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Sure they can. Ask Barney Frank and Chris Dodd.

Credit is like crack, that few people really use responsibly. They allowed the US population to smoke freely from the overabundant cheap credit pipe and then stopped dealing, cold turkey.

Now the federal regulators are realizing that the shutdown of the credit pipeline has forced people to live within their means, and that is just unacceptable, and not a model that our government follows, at all.

It'll get worse as well. The minimum scores required to get credit for things like FHA loans are current around 620pts, in January, those scores are set to raise to 640-660. Not a big deal for the average dfwstanger, but for the people that use FHA, it'll kill the numbers of buyers.

There will be a consumer stoppage of seeking credit as they get tired of getting turned down, and there will be a shift in ideology, nationwide, of people saving AND then purchasing.

As a result, you'll see "525 and away you drive!" campaigns where literally a mirror test is all that is required. And by 2025 we'll be doing this all over again.

1/19/09, the last day of Free America.
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post #4 of 19 (permalink) Old 12-14-2009, 05:14 PM
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^^^^ LOL @ "525 and away you drive"..... Considered a career in Product Marketing...That is catchy.
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post #5 of 19 (permalink) Old 12-14-2009, 05:30 PM
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^^^^ LOL @ "525 and away you drive"..... Considered a career in Product Marketing...That is catchy.
Marketing falls under my duties list, among other things.

1/19/09, the last day of Free America.
Pericles "Freedom is the sure possession of those alone who have the courage to defend it. "

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post #6 of 19 (permalink) Old 12-14-2009, 05:58 PM
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Sure they can. Ask Barney Frank and Chris Dodd.
You hit the nail on the head but why give Klinton a free pass? Add him in there too.
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post #7 of 19 (permalink) Old 12-14-2009, 06:04 PM
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You hit the nail on the head but why give Klinton a free pass? Add him in there too.
Yep, he de-regulated mortgage lending. He's as much to blame as anyone else, IMO.
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post #8 of 19 (permalink) Old 12-14-2009, 07:35 PM
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Obama will forever deny congress was the cause

Dems and Republicans are both at fault on this issue.
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post #9 of 19 (permalink) Old 12-14-2009, 07:39 PM Thread Starter
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Dems and Republicans are both at fault on this issue.
That may very well be, but it doesn't look like they learned anything!

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post #10 of 19 (permalink) Old 12-14-2009, 09:07 PM
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You hit the nail on the head but why give Klinton a free pass? Add him in there too.
I wasn't. Just showing more recent, and current douche bags. We can go back to Carter if you'd like, since he initially created the Community Reinvestment Act.

1/19/09, the last day of Free America.
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post #11 of 19 (permalink) Old 12-14-2009, 11:51 PM
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yea this is truely fucking amazing whats going on. This country is so fucked up, our "leaders" are completely clueless it seems. Im about ready to vote for joe the effing plumber to get someone in there that gets it. This sucks.

So basically, they are trying to get banks to loan money to small business again to get some supposed job growth.... Its like they are afraid to admit that the outsourcing has really fucked up americas economy and instead of standing up to it and dealing with it they just go back to sticking their heads in the sand.....awesome.

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post #12 of 19 (permalink) Old 12-15-2009, 12:14 AM
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post #13 of 19 (permalink) Old 12-15-2009, 10:55 AM
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This is a problem for small businesses.

I know of a small business that wanted to expand. The business was a restaurant. He wanted to borrow $300k to remodel and expand the existing business. After that was done he was going to hire an additional 5 workers. The bank turned him down on a loan. To make it worse, the restaurant was an initial investor in the bank, and had $100k sitting in it.

I know that the loans to people that cannot pay them back is an issue, but when banks will not make loans to viable, ongoing, businesses, there is a problem.
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post #14 of 19 (permalink) Old 12-15-2009, 11:07 AM
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This is a problem for small businesses.

I know of a small business that wanted to expand. The business was a restaurant. He wanted to borrow $300k to remodel and expand the existing business. After that was done he was going to hire an additional 5 workers. The bank turned him down on a loan. To make it worse, the restaurant was an initial investor in the bank, and had $100k sitting in it.

I know that the loans to people that cannot pay them back is an issue, but when banks will not make loans to viable, ongoing, businesses, there is a problem.
That's a really vague set of circumstances on which to make your case that banks aren't lending money to viable businesses.

At the end of the day, if the bank doesn't feel like they can get their money back then they're not going to loan the money. They don't work off of feelings, they don't work off of feel good stories, they work off of what concrete numbers tell them. The last time they got away from that we wound up with our current mortgage crisis.

Either way, who is the government to tell banks who to lend to and in what quantities? Anyone advocating this policy is directly advocating the use of extreme socialist policy in our "free" market. There's no two ways around that.

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post #15 of 19 (permalink) Old 12-15-2009, 11:24 PM
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That's a really vague set of circumstances on which to make your case that banks aren't lending money to viable businesses.

At the end of the day, if the bank doesn't feel like they can get their money back then they're not going to loan the money. They don't work off of feelings, they don't work off of feel good stories, they work off of what concrete numbers tell them. The last time they got away from that we wound up with our current mortgage crisis.

Either way, who is the government to tell banks who to lend to and in what quantities? Anyone advocating this policy is directly advocating the use of extreme socialist policy in our "free" market. There's no two ways around that.
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Originally Posted by mikeb
but when banks will not make loans to viable, ongoing, businesses, there is a problem.
This is not the only story i've heard, i've read about many other businesses that cannot get loans. Certainly not all of them are high risk. You hear about the CIT bankruptcy? They are a major lender to small businesses. Many small buinesses were wondering where they were going to get operating capital if CIT went under.

You do understand that small businesses borrow money all of the time, right? A lot of them borrow to float ordinary day to day operations. It's just normal business as usual. Perhaps they need a loan to buy material to build an order, an order that they will subsequently get paid for, and then they pay back the loan.

You cut off these loans, and the companies cannot operate.
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post #16 of 19 (permalink) Old 12-16-2009, 02:54 AM
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This is not the only story i've heard, i've read about many other businesses that cannot get loans. Certainly not all of them are high risk. You hear about the CIT bankruptcy? They are a major lender to small businesses. Many small buinesses were wondering where they were going to get operating capital if CIT went under.

You do understand that small businesses borrow money all of the time, right? A lot of them borrow to float ordinary day to day operations. It's just normal business as usual. Perhaps they need a loan to buy material to build an order, an order that they will subsequently get paid for, and then they pay back the loan.

You cut off these loans, and the companies cannot operate.
I understand how firms use short term notes to fund their day to day operations and that whole notion is great and all, but it's still a horrifically awful idea to allow our government to force banks to provide loans that they don't want to provide. Talk about a slippery fucking slope.

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post #17 of 19 (permalink) Old 12-16-2009, 10:49 AM
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Its like they are afraid to admit that the outsourcing has really fucked up americas economy and instead of standing up to it and dealing with it they just go back to sticking their heads in the sand.....awesome.
Oh hell yeah they are afraid to admit it. That might eventually lead back to them being at fault, and we just can't have that now can we. A politician being held accountable for his own misdeeds? That'll be the day.
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post #18 of 19 (permalink) Old 12-16-2009, 09:08 PM
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post #19 of 19 (permalink) Old 12-16-2009, 09:35 PM
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Oh hell yeah they are afraid to admit it. That might eventually lead back to them being at fault, and we just can't have that now can we. A politician being held accountable for his own misdeeds? That'll be the day.
well its a big business tactic...NEVER admit fault. Guess they think by not saying it that people cant tell....hahha Can you imagine if they actually admitted it?

I dont know what else to do other than laugh at the pure stupidity of our government and the brilliance of the commies to destroy america from the inside out. It wont be military ships that cross pacific to invade, it will be civilian transports bringing them to their newly purchased land!!

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