Bank Lending Keeps Dropping

Discussion in 'Economics' started by ASusilovic, Apr 22, 2009.

  1. Lending at the biggest U.S. banks has fallen more sharply than realized, despite government efforts to pump billions of dollars into the financial sector.

    According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program.

    The total dollar amount of new loans declined in three of the four months the government has reported this data. All but three of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions.

    The Journal's analysis paints a starker picture of the lending environment than the monthly snapshots released by the government and is a reminder of the severity of the credit contraction. One reason for the disparity: The Treasury crunches the data in a way that some experts say understates the lending decline.

    The Obama administration is scrambling to defuse a backlash surrounding the bank bailout. Political disquiet over banks' perceived lack of lending, as well as their spending on bonuses and perks, has provoked skepticism about the administration's ability to revitalize the banking system. Any evidence that banks are lending less could reinforce criticism of the program, and put pressure on plans crafted by Treasury to unfreeze credit markets and support bank balance sheets. With bailout funds dwindling, one option the Treasury might pursue is to turn loans into common equity.


    Hum...wasn´t every bank in the last earnings announcement claiming "strong lending business" ?:D :D :D
  2. I don't blame them, who wants to borrow money to deadbeats?
  3. spinn


    They used the TARP money to short AIG.

    Can a bank short itself?
  4. they can't short their own stock but they can short others. these banks probably used TARP money to collude and buy eachothers stock after C tells they made profit first month. probably why you see their trading profits soaring in their books. loan (the source of disease) on their books still worth crap unless they're bidding up on eachothers subprime to mark up their values (i.e. ebay bidders bidding on eachother's identical items to increase market value). now they are trying to use these gains to repay TARP before govt finds out. this is all just an opinion and not a known fact btw.
  5. You're all wrong. :p :D

    Have you forgotten the PPIP? Banks are hording the TARP $ to buy each others' "toxic assets" at a 800% premium to their value and then leave the fed & treasury holding the bag.

    I wouldn't lend either if that was my next best alternative...
  6. Reckless lending caused meltdown. So government encourages more lending to fight meltdown...?

    Government and banks say lending is up. Reports come out stating exact opposite........?

    Confused anyone?
  7. Sure the banks were shorting the markets with TARP money. Just one more way to screw the 401K. Seems someone wants everyone to be poor, and dependant on the government.
  8. Masses of poor people in this country is great for the elite and companies. In a depression, they can use the people who are broke and pay them crappy wages with no benefits, thereby saving the company money and increasing their profits.
  9. Daal


  10. This is a good sign to get rid of them as we know them.
    #10     Apr 22, 2009