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View Full Version : U.S. Issues Bailout money being used for dividends


Chiefnj2
10-30-2008, 09:12 AM
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/29/AR2008102904533.html?hpid=topnews

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

The government said it was giving banks more money so they could make more loans. Dollars paid to shareholders don't serve that purpose, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program.

Critics, including economists and members of Congress, question why banks should get government money if they already have enough money to pay dividends -- or conversely, why banks that need government money are still spending so much on dividends.

"The whole purpose of the program is to increase lending and inject capital into Main Street. If the money is used for dividends, it defeats the purpose of the program," said Sen. Charles E. Schumer (D-N.Y.), who has called for the government to require a suspension of dividend payments.

jAZ
10-30-2008, 09:14 AM
What a mess.

If they don't need the money for operations and are willing to pay dividends, they don't need to be particpating in the program.

HonestChieffan
10-30-2008, 09:15 AM
Schumers a dumbass and has no understanding of business or banking

vailpass
10-30-2008, 09:16 AM
Sweet.

BigRedChief
10-30-2008, 09:19 AM
Schumers a dumbass and has no understanding of business or banking
Call me a dumbass too then. Our tax money should not be used to pay dividends to shareholders.

'Hamas' Jenkins
10-30-2008, 09:20 AM
I also heard a story that some banks were using them in order to leverage purchases of other institutions.

Mr. Laz
10-30-2008, 09:23 AM
fuggin bailout :cuss:

vailpass
10-30-2008, 09:24 AM
I also heard a story that some banks were using them in order to leverage purchases of other institutions.

I heard from a guy who read in a book about this other guy who had a cousin who said Michelle Obama has to shave her back twice a day.

Taco John
10-30-2008, 09:26 AM
This is the worst form of wealth redistribution ever imaginable...

You can't credibly stand in opposition of Barack Obama while trying to make justifications for this horrible, horrible legislation.

jidar
10-30-2008, 09:27 AM
This was the flaw in the bailout all along.

The theory was that we would give the banks money to get the credit market going again, but since we didn't give them enough to cover their losses (not even close) then it's not going to be business as usual. The credit market is still the last thing they're worried about, they're worried about plugging holes in their balance sheets and keeping their shareholders happy.

HonestChieffan
10-30-2008, 09:28 AM
If I have a dollar and need 2 dollars so I can run the bank and pay my obligations and I get a dollar in bailout money, should I ignore the operation of the bank and not take the dollar? Or can I use the bailout to run my bank and get back to laoning money?

BigCatDaddy
10-30-2008, 09:29 AM
This is the worst form of wealth redistribution ever imaginable...

You can't credibly stand in opposition of Barack Obama while trying to make justifications for this horrible, horrible legislation.

Yes, it's horrible , but didn't he vote for it?

Chiefnj2
10-30-2008, 09:36 AM
Why should my tax dollars be used to pay people who invested poorly?

jidar
10-30-2008, 09:37 AM
If I have a dollar and need 2 dollars so I can run the bank and pay my obligations and I get a dollar in bailout money, should I ignore the operation of the bank and not take the dollar? Or can I use the bailout to run my bank and get back to laoning money?

Considering that paying dividends is something done with cash on hand and with regard to how the balance sheet looks, one could make the argument that without the bailout money they don't pay dividends or pay much much less.

Mr. Kotter
10-30-2008, 09:38 AM
This is why Americans knew this bail-out was wrong.

This is absolutely assinine. :shake:

HonestChieffan
10-30-2008, 09:40 AM
Considering that paying dividends is something done with cash on hand and with regard to how the balance sheet looks, one could make the argument that without the bailout money they don't pay dividends or pay much much less.

actually many corps have paid dividends with borrowed money in ecxcess of the amount a quarterly statement will support.

Mr. Laz
10-30-2008, 09:43 AM
actually many corps have paid dividends with borrowed money in ecxcess of the amount a quarterly statement will support.
so you're ok with the government "redistributing the wealth" to these investors?

donkhater
10-30-2008, 09:44 AM
Are people FINALLY seeing the flawed thinking of handing control of private entities to the federal government?

Government-run programs---More expensive, less quality.

jidar
10-30-2008, 09:45 AM
actually many corps have paid dividends with borrowed money in ecxcess of the amount a quarterly statement will support.

That's true too.

But that's business as usual right?

If banks aren't opening up their credit lines (and they don't appear to be) but they're otherwise doing business as usual with things like paying dividends and buying assets from failed banks, then the question becomes "Why did we give them money to open the credit lines when they weren't going to open the credit lines?"

The bailout so far hasn't done anything for us, and now everything a banks does that costs money in the meantime is going to be heavily scrutinized. That's a reasonable thing.

If you want to work with analogies just consider this one. If I loan you $100 to pay your rent and you go out with your buddies to a ball game that night, it's going to piss me off.

HonestChieffan
10-30-2008, 09:46 AM
I think the whole bailout thing is crap. But for schumer to want to give the money and dictate how the bank runs its business is bull. He was a big reason the banks got in this shape He and Frank and a bunch of others have ZERO credability on the issue and should be jailed not telling banks how to be banks.

Iowanian
10-30-2008, 09:49 AM
This is going to turn out to be one of the biggest goat screwings of all the goat goat screws.

Rural Iranians are going to be very jealous.

jidar
10-30-2008, 09:49 AM
Are people FINALLY seeing the flawed thinking of handing control of private entities to the federal government?

Government-run programs---More expensive, less quality.

Must be opposite day or something.

Mr. Laz
10-30-2008, 09:50 AM
I think the whole bailout thing is crap. But for schumer to want to give the money and dictate how the bank runs its business is bull. He was a big reason the banks got in this shape He and Frank and a bunch of others have ZERO credability on the issue and should be jailed not telling banks how to be banks.
what you do mean?

If a bank is taking a government bail out then i would think the government SHOULD have a say in how that money is used.


credibility

donkhater
10-30-2008, 09:52 AM
Color me shocked. The government (i.e. Senators and Congressmen) creates $700 billion out of thin air with the idea of giving it to big business and corruption takes place? Stunned I am.

HonestChieffan
10-30-2008, 09:52 AM
what on earth did u expect the banks to do? Take the money and then what? The money is there to help bail out the bank. That means they have money to pay bills, people, pay rent, utilities and do the business of banking including such stuff as advertoise, market, and yes...god forbid...pay dividends on stocks and interest on deposits.

***SPRAYER
10-30-2008, 09:59 AM
Well, we have two Senators running for president who approved it.

petegz28
10-30-2008, 09:59 AM
this is what the dem controled congress gave us...

Chiefnj2
10-30-2008, 10:01 AM
this is what the dem controled congress gave us...

And the GOP candidate voted for it and urged the other members of his party to vote for it. This isn't a Dem/Rep issue, it's a screwjob by both.

Mr. Laz
10-30-2008, 10:01 AM
this is what the dem controled congress gave us...
:shake:


not paying attention at all are ya?

Mr. Laz
10-30-2008, 10:02 AM
this is what the dem controled congress gave us...
i'm sorry ..... but i have to quote this again, just for the sheer stupidity of it.


:doh!:

HonestChieffan
10-30-2008, 10:02 AM
They created the problem...did not try to avoid it
They deny responsibility and make no attempt to rein in stupid credit poly they mandadte
They blame Bush who was not even Texas Gov when this all began
They come up with a bail out so banks can stay opena and do the business of banking..
And when the banks do the job of banking, these self same moons want to tell the banks how to be banks?