quantitative easing

They also have more potentially bad loans than they know what to do with. If enough go bad, they get closed down without the reserves to back them up. Since the Fed gives them that money, they'll take it. They'll only loan it to people they can *guarantee* can't go bust (like people with 50% down).

Clueless.

Nothing is added to the economy when government prints money, other than money. That added money destroys investments.

Wrong! They have too many under-water loans going bad. When their balance sheet goes negative they're closed down. The bank owners get cranky when that happens.

As long as the Fed is giving them free money there is no reason not to take it to bolster their reserves, just in case. Investing the money reduces their reserves, something they're *not* going to do unless the investment is

*guaranteed*. They're playing the game exactly as they should in this economy; minimize risk.

Clueless.

Clueless. They also use reserves by writing loans. They're already in dire straights. They don't need more risk.

Spoken like a true lefty. Of course it's fine with you if they're forced out of business. It's not your bank and there will always be another one

*FOR*YOU*.

Just not to everyone who asked. They loaned it to people with stable jobs and/or income.

--
Dirk

http://www.transcendence.me.uk/ - Transcendence UK
http://www.blogtalkradio.com/onetribe - Occult Talk Show

Which is probably what they're doing now.

John

But just no so much as previously for a given income.

--
Dirk

http://www.transcendence.me.uk/ - Transcendence UK
http://www.blogtalkradio.com/onetribe - Occult Talk Show

Right. Why lend money to the deadbeat public when you can lend it to their deadbeat government, at interest?

The government's competing with the public for borrowed money. That's inevitable, when they borrow so much of it.

-- Cheers, James Arthur

.

I heard an interesting idea the other day suggesting the government give money to homeowners who are underwater, instead of the banks. That way, homeowners can bailout the banks with free government money, pay their mortgages, stay in their houses, while the banks receive the government money (second hand) and don't have to worry about foreclosing on the loans. Everybody is happy.

-Bill

ut.

nt

s

That was the genius that was TARP, until they figured out there wasn't enough money in the world to do it.

Pouring the money into banks instead gave them 15:1 leverage compared to giving it to people.

Of course it's all academic--none of this works. They're just running up the national credit card to pay off imaginary values that never were. It's amazingly stupid.

-- Cheers, James Arthur

Ad hominem. Meannless response.

If banks don't like bad loans, they'd help people negotiate better terms. Not throw them out and guarantee a default.

--
Paul Hovnanian     mailto:Paul@Hovnanian.com
------------------------------------------------------------------
First they ignore you, then they ridicule you, then they fight you, 
then you win.   -Gandhi

Lack of response noted.

Lack of response noted.

Factual. You are clueless.

They're bound by 1) law, and 2) market. They have no interest in risk when the downside is forced closure and loss of all assets.

This is hilarious (QE2, explained by a cartoon)

James

Macroeconomics is such crap. Worse than useless.

John

Bernanke's now (today) warning Congress that QE2 won't work without more stimulus. QE2 is magic, it's golden, but it's not quite golden enough on its own.

IOW, warning in advance that it won't work.

"Government programs don't fail, they're just underfunded." --me

Ben Stein says the guys in this gang that can't shoot straight just...aren't...that....smart.

-- Cheers, James Arthur

--

Reply in group, but if emailing add one more
zero, and remove the last word.

What makes people think it's a screw up? It isn't.

It takes time to let the confidence return to the masses. If you fleece them too often, they start waking up. Even bloodsuckers know that if you take too much at a time, you kill the host.

The greed of the banking class seems to be ignoring that. The cycle of the 'leeching' seems to be getting shorter and shorter. Once they find themselves in an impossible corner, the next major war will conveniently break out.

mike

Banks are busy making 'bad loans' as fast as they can. Even if it means counterfeiting signatures on foreclosure paper.

Banks need capital to back up their loan portfolio, not depositor's cash. They can only raise capital by increasing earnings. Banks earn money by making loans. Or charging fees. But that has already attracted the ire of the public.

The Fed's QE program is injecting money into the economy by buying bonds. The people who sell those bonds now have cash. And what does one do with cash? They deposit it at their bank. And the banks are already up to their eyeballs in cash (deposits, not capital). The Fed is playing chicken with them. Either they start making loans or they go under.

IMHO, the Fed could do a better job by entering the retail banking business directly. The next bank that fails, the Fed buys it. Then they take deposits, manage checking accounts and issue their own Visa and MasterCards. At reasonable rates. Consumers start borrowing, the economy takes off and nobody has to kiss JP Morgan's long dead ass any more.

--
Paul Hovnanian  paul@hovnanian.com
----------------------------------------------------------------------
Have gnu, will travel.

Of course, the wise are already using credit unions, instead of banks, but that is another issue entirely!

Charlie

Two entirely different issues. The fact that you join the two says everything about your ulterior motives.

Either.

...and your point is?

Clueless.

You're bent out of shape at the Fed and yet you want THEM to enter the retail banking market (driving everyone else out). Absolutely clueless!

than

d at

Bernanke's Keynesian splurge, to the extent it does anything, just does it overseas. Thus the US is robbed the benefits, dubious as those were, and still pays the price. It's kind of a win-win.

s

ale.

Deflation? It makes stuff cheaper for everyone. Its real sin is in being good for ants, bad for grasshoppers, and bad for a government that depends on progressive tax rates for a) life and b) redistribution.

-- Cheers, James Arthur

Why all the fury at banks? The worst they can do is loan you some money to buy something you want to buy.(*) By comparison, the federal government takes a third of everything you earn every year, plus more, and uses it to torment you.

(*) Or make loans at the government's insistence, lose the money, then get bailed out by same, who then sends you the bill.

-- Cheers, James Arthur