Those words appeared in a recent L.A. Times business section article. I believe the world has gone mad. Maybe next is the announcement that the sun will no longer rise, that gravity no longer exists, or that death and taxes have ceased to be a certainty in life.
How ludicrous does it sound that a lending institution must obtain approval to repay a governement loan? The article also points out that many of the banks felt they were "forced" to take the money by former Treasury Secretary Paulson. So which was it -- banks were on the brink of failure due to an overwhelming amount of poorly underwritten loans, or they didn't need the money? The average person who does not have in-depth knowledge of the financial markets must have more fear and mistrust than ever with the inconsistencies that brought about this crisis and the explanations since.
Just months ago there was widespread panic that paralyzed the credit markets. Now the very moves that were made to ease that panic are being viewed in hindsight as "we didn't really need it". Yet at the same time the article says that three of the largest banks still are not healthy enough to pay the money back.
So what is the truth? Did these institutions really need the money to avoid collapse, or was the whole thing a symbolic gesture to build confidence and avoid panic? Or is it more the case that the lenders don't like the stipulations that go with the loans regarding executive pay caps and restrictions on dividend payments. I would tend to lean toward the latter.
How ludicrous does it sound that a lending institution must obtain approval to repay a governement loan? The article also points out that many of the banks felt they were "forced" to take the money by former Treasury Secretary Paulson. So which was it -- banks were on the brink of failure due to an overwhelming amount of poorly underwritten loans, or they didn't need the money? The average person who does not have in-depth knowledge of the financial markets must have more fear and mistrust than ever with the inconsistencies that brought about this crisis and the explanations since.
Just months ago there was widespread panic that paralyzed the credit markets. Now the very moves that were made to ease that panic are being viewed in hindsight as "we didn't really need it". Yet at the same time the article says that three of the largest banks still are not healthy enough to pay the money back.
So what is the truth? Did these institutions really need the money to avoid collapse, or was the whole thing a symbolic gesture to build confidence and avoid panic? Or is it more the case that the lenders don't like the stipulations that go with the loans regarding executive pay caps and restrictions on dividend payments. I would tend to lean toward the latter.
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