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Stock Ideas Investors Daily Edge Changing The Rules On The Bank Bailout
Stock Ideas Investors Daily Edge Changing The Rules On The Bank Bailout 
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By Charles Delvalle Dear Reader, The market’s been up, and it’s been down. But the one thing that remains constant is that there are a lot of big investors out there scamming the little guys. Over the past few weeks, many readers have sent in stories and really good resources that can help the little guy figure out what’s going on. |
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| Changing The Rules On The Bank Bailout |
| Friday, 31 October 2008 | ||||||||
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For a guy with a Harvard MBA, President Bush simply doesn't get how real banks work... but anyone who has waited three to five days for an out of state check to clear gets how the "float" works. Government regulations allow the bank to use that money for a few days before you get your shot at it. Hope the President opts for direct deposit on his pension check, book royalties and the millions he'll get paid to speak in public. Anyway, the Associated Press reports that, earlier this week, it was an impatient White House that prodded banks and other financial companies to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans. Hoping to thaw the economy-chilling credit freeze, the Bush administration told banks to stop being sissies and open up loan windows for cash-starved businesses and consumers who have pulled back on spending. "What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money," White House press secretary Dana Perino said. While there are limits to Washington's power to affect banks' behavior, the White House decided it was time to use its bully pulpit. Meanwhile, you have just a few days remaining to charter a bank and get yourself in on some of the gravy train. Because, it will be a week or so before the Treasury Department can fix a glitch in the bank rescue program that currently prevents some 6,000 of the nation's 8,500 banks from applying for government support. Treasury is buying preferred shares in banks as a way of injecting cash into the institutions. But about 6,000 of the nation's banks don't have publicly traded stock shares, so they don't have a way to qualify for the handout.
Treasury officials assured banking industry representatives that they'd fix the application forms so that both publicly traded and privately held institutions can qualify for the program. If the fix takes too long, the Treasury will extend the Nov. 14 deadline for applying for government support. If it can do that for banks, don't you think the government could deal with your Medicare disputes a little faster?
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