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Bailouts Have Failed: Banks Are Still Hoarding Cash

Posted By admin On October 17, 2008 @ 3:41 am In Money Watch | Comments Disabled

George Washington’s Blog [1]
Friday, Oct 17, 2008

Despite spending trillions of dollars on the bailout plans, banks are still hoarding cash.

Why?

Because:

  • They have huge derivatives liability (especially on credit default swaps), and they are trying to build up enough of a nest egg to be able to pay off their derivatives debts [3]
  • Some are even using the money to buy up rivals

The feds handed out all of the dough without keeping any control whatsoever [5] to make sure the banks used the money to lend out to Main Street.

The feds’ hope that the banks would use the money to lend out to Main Street is about as smart as handing over your wallet to a robber based upon the hope that he’ll pay your bills with it.

Bailouts Have Failed: Banks Are Still Hoarding Cash  161008pptv2 [6]


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URLs in this post:

[1] George Washington’s Blog : http://georgewashington2.blogspot.com/2008/10/feds-actions-have-failed-banks-are.html

[2] Credit card defaults are skyrocketing, “forcing banks to hoard cash to protect against future losses”: http://www.washingtonpost.com/wp-dyn/content/article/2008/10/15/AR2008101503233_pf.html

[3] pay off their derivatives debts: http://georgewashington2.blogspot.com/2008/10/banks-hoarding-cash-to-pay-derivatives.html

[4] ride out the financial crisis: http://www.bloomberg.com/apps/news?pid=20601102&sid=aA1JyufIMExE&refer=uk

[5] without keeping any control whatsoever: http://georgewashington2.blogspot.com/2008/10/feds-give-hundreds-of-billions-to-banks.html

[6] Image: http://www.prisonplanet.tv/subscribe.html

[7] Banks Hoarding Cash to Pay Derivatives Liabilities: http://www.prisonplanet.com/banks-hoarding-cash-to-pay-derivatives-liabilities.html

[8] Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash: http://www.prisonplanet.com/failed-banks-may-get-pension-fund-backing-as-fdic-seeks-cash.html

[9] Taxpayers set to hand over MORE cash to bail out Britain’s failing banks: http://www.prisonplanet.com/taxpayers-set-to-hand-over-more-cash-to-bail-out-britains-failing-banks.html

[10] Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever: http://www.prisonplanet.com/thanks-to-qe-bernanke-has-injected-foreign-banks-with-over-1-trillion-in-cash-for-first-time-ever.html

[11] Banks Keep Mum on What they Did with Bailout Cash: http://www.prisonplanet.com/banks-keep-mum-on-what-they-did-with-bailout-cash.html

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