Tuesday, February 17, 2009

Well... THAT plan didn't work!

Largest banks that received aid cut lending
17 Feb 2009
WASHINGTON – The 20 largest banks that received government rescue funds slightly reduced their lending to consumers and businesses in the last three months of 2008, the government said Tuesday.

If memory serves, the original rationale ("the sky is falling") for TARP was that the credit markets were freezing up, and that without injection of capital - somehow - banks would stop lending.
I admit that I didn't pay too much attention to SecTreas Paulson's constantly changing plans for using the initial $350Bn of TARP funds, but I'm pretty sure the basic rationale was constant: the credit markets were freezing up.

So... if we injected $350Bn into the banks to free up credit, and then they loaned less money in Q4 - after they got our $$$... What's going on???

This is a reason that I'd really like to see current SecTreas Geithner present a very detailed, clear, compelling playbook for use of future TARP funds. (... and why I'm about to send emails to my Rep & Senators requesting that they demand to see Geithner's playbook!).

Sing a song!

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