Skip to comments.on FNC: Chicago plant closing & BoA bailout
Posted on 12/08/2008 9:01:38 AM PST by Zeddicus
Just heard on FNC an update on the Chicago plant closing where union workers are protesting.
The main complaint is that the plant's bank, Bank of America, received federal bailout money but did not extend the company's credit line, resulting in the plant closing.
Now we have the Governor of Illinois saying that the State is going to suspend all business with BoA, essentially blackmailing the bank into lending to the company with the expectation that the plant will reopen and reemploy the protestors.
My question is this: do we know that BoA did not have a legitimate financial reason for closing the company's credit line? I have to assume the bank made the decision because the company was a bad credit risk. It's entirely possible that BoA is simply being responsible with taxpayers funds.
Think about this. Didn't we get into this whole mess in the first place because banks were taking bad credit risks? Are we now going to force banks to continue bad lending practices with taxpayer money?
What if the company simply has no business to sustain operation? They are a construction-related business - it's not suprising they are broke, and I would not be suprised if BoA had good reason to shut them off.
This is not going anywhere good. The government is now in a position to force banks to lend taxpayer money to insolvent companies, and to force said insolvent companies to remain open solely to keep people employed, gainfully or not.
Free enterprise in this country is dead. I think it's pretty safe to say we're now living in a communist country, no?
Yay, another day, another bailout, another vanity.
jeeze.. the problem with the banking system is the government forcing them to make bad loans, and now the State is pissed because they chose not to give a bad loan to this plant?
If the plant was such a good credit risk, why didn't the state of Illinois lend them the money.
The ACORNing of America’s financial institution continues.
I’m no expert, but forcing banks to make bad loans to people who can’t pay them may cause problems down the road. You could end up with a housing market collapse, banks going out of business, and even the big 3 car companies could go bankrupt. Again, I’m no expert, but it may be a bad idea.
I heard the story earlier on Fox news. And it centered on the issue that the company gave 3 days warning of its closing, and hasn’t paid the employees for all their earnings or what’s owed them under the law. That’s a whole other issue.
I’m with BofA...i’ve been seriously considering going to a small hometown bank. I’m pretty unnerved about these huge dinobanks gobbling up everything in their path and then groaning with the weight.
This is what the slide towards socialism looks like. First banks were pressured to make loans for residential mortgages to people who could not pay them back. Now they are being pressured to make loans to businesses who can’t pay them back. Guess who is going to end up paying for all these bad loans. The taxpayers are going to be forced to pay for them.
FWIW, BofA did not ask for and did not need bailout funds. The bank bailout bill passed by Congress contained provisions that FORCED solvent banks to accept the bailout money.
You are right but OTOH is BOA taking too short term of an outlook on the risk? Demand will eventually turn back up. Is there some compromise (radically downsized operations)?
BoA invited them in by taking the bailout money. Like vampires, they now will have complete access.
This has turned in to a full-blown Democrat political circus, complete with a JESSE JACKSON/Rainbow-PUSH photo op this morning.
I KNEW this was going to happen. It’s been being pushed on the Lib Media Website KOS all weekend, with 20+ diaries on the subject.
And as we know, the KOS kooks now drive all media coverage from the big networks.
And, don’t you DARE ask how the company is supposed to pay these people with NO MONEY...
If there was a print story about this aspect of the Chicago situation (the part about IL suspending business to BoA because of this) to have linked to, I would have.
Is it a "vanity" to discuss a story we heard on TV or radio but cannot find a hard link to?
I'm telling you, this constant whining about "vanities" is really starting to turn me off to FR. I just wanted to discuss this aspect of an interesting story but couldn't find a hard link to it.
I saw this same Presser on FOX.
And I too, have been looking for a print version, but it is nowhere to be found.
Baraq gonna pay their gas and mortgage:
Large industry is now clearly seen as an arm of government, handing out checks and benefits to loyal voters and implementing Federal regulations in return for political protection against competition. How dare some arrogant bank refuse to lend to one of these quasi-governmental entities? ;)
The plant itself has nothing to do with the bailout/government intervention/blackmail. The employees were union members! That is the STORY! And union members must remain employed, if necessary on the government—that is, the taxpayer—dime. Any questions?
Don’t think this qualifies as a vanity. I watched the report on FNC and credit the poster for the heads up.
Nice Kitty, BTW.
Yes I agree, this is a different issue. I did hear in the same story however that there is a loophole in the law which grants extenuating circumstances to companies that close and cannot meet their contractual obligations.
The story is taking an entirely new angle though that appears to go well beyond just giving the employees their severance pay. Now it sounds like the government expects BoA to be required to continue lending to the company, and for the company to be required to remain open and employ the workers, wether they have any business or not.
No way that would ever happen in the USA. Your tinfoil hat is showing.
Welcome to Chicago politics. You ain’t seen nothin’ yet.
Ding ding ding, we have a winner! The old
progressive socialist idea of "state capitalism" is being reborn right before your eyes. Certain mid-20th century European dictators would be jealous of us.
I agree with you about the vanity police. It gets so irritating to read a thread I’m interested in, that many people respond to, and then read some whiner going on about how he doesn’t like that particular thread.
Well...if he doesn’t like it, don’t read it!
I do not believe that the politicians in control are simply unaware of this self-evident truth. Which can only mean that they are consciously and willfully acting against the interests of the citizens they are supposed to be serving.
I’m with you, don’t sweat the FR thread police.
I know that I personally did the same thing. I replaced my regular mortgage with a home equity line, paid off most or all of that with my savings knowing that I could always get the money back out by writing a check from the line of credit. The interest I saved paying off the house was a lot more than I could ever earn by having that money in savings or CDs. However with credit lines being reduced, I took a lot of that money back out and put it into savings. It is a lot easier for the bank to reduce an unused line of credit than to demand repayment on a used line of credit. If I hadn't done that I could have easily be put in a situation where I had no debt, but little or no cash on hand and no easy way to get it if I needed it.
The company will declare bankruptcy and none of that will matter. They had no money and no credit. What were they supposed to do, let them work for nothing?<.p>
Never said that. I only said they should pay for hours worked.
Welcome to the world of bankruptcy. Sad as it may be, the employees probably should have been laid off months ago so they could have started looking for other work having received all their pay up to that time.
They are demanding benefits and vacation pay
I agree. The company is remiss in handling it the way it did. That's my point.
“Politicians...are consciously and willfully acting against the interests of the citizens they are supposed to be serving.”
That is the conclusion I have come to. If politicians were just stupid, you would think their idiotic decisions would be random. Instead, all their policies are aimed at targeting hardworking, successful people, undermining individual freedom and establishing a totalitarian type government. I agree with you, it is truly scary.
There are exemptions to that law.
They are going after the bank not the company. That should tell you something.
You bet it's another issue, and one the bank has absolutely no responsibility in. BofA has no contract with the workers but it should have every obligation to use the bail out money responsibly and in its established line of business.
So, now that government has decided to save the market - we have at least two unions demanding a share in recognition of their role in trashing the system in the first place. Not to mention our savior-in-waiting and crooked state politicians blackmailing the bank to get it for them.
Boy, am I surprised!
Glad you posted, I’ve been steaming since I saw the TV coverage.
This is deeply upsetting.
BoA was forced to take bailout money
Now they’re being pushed to make more bad loans.
I heard on Fox last night an interview with a local politician. He was pushing to keep the factory open because it made energy-efficient windows. He said that this function was necessary for the coming Obama administration plans.
We are rapidly becoming a communist economy.
Yeah I heard that too. You know what comes next, right?
You and I are going to be forced to buy these new windows and doors.
I have mixed emotions on this.
B of A was only “forced” to take the bailout money because, without the bailout money, they were on the verge of failure. They took the bailout money and have decided, with the rest of the banks, to just hoard it or spend it on advertising and operations. So, I have little or no sympathy for them.
ON THE OTHER HAND, I’m more appalled by the state thinking it can strong-arm its way into the B of A’s boardroom and dictate what business decisions they make. This kind of power will be abused everywhere if it gets the desired result. Will the state of Michigan go after the banks for not extending their bailout money in loans to the auto industry? There’s really no limit to what depths the gov’t can sink, given a little slack here.
Wasn’t it about a year or two ago that BOA was lending money to illegals? I remember Dennis Miller saying he was taking his money out because of it.
Are we now going to force banks to continue bad lending practices with taxpayer money?
Been going on for far too long.
ON CNBC this morning I heard someone mention that a congressman proposed emminent domain to rework MSB’s.
We are close to being fully socialist.
Why not? Because the federal government wants to own the auto industry directly. They are content to own smaller industries through the banks they've bailed out.
BofA wasnt near failure...what on earth are you talking about?
Trust me. Without that bailout, the counterparty obligations of ensuing bank failures would have left a smoking hole where they once stood. Whether or not they were “healthier” than other banks, it doesn’t matter when an atomic bomb goes off a hundred feet from where you’re standing. They were all on the verge of failure. And that said, the industry is merely on life support at this point. Only the expectation that the gov’t will save the industry at any cost is keeping the system afloat.
And don’t forget about that massive, gaping, toxic albatross called Countrywide, whose liabilites they assumed, plus the continuing aversion of banks to reveal their level 3 assets.
If the vanity is written soundly and pertains to a hot issue, then I don’t see a problem with them. Some vanities are better than most news articles, IMO.
They also made arrangements to purchase Merrill Lynch even before the concept of bailouts was introduced.
I don't think they were close to failure.
more appalled by the state thinking it can strong-arm its way into the B of As boardroom and dictate what business decisions they make.
I'm wondering if the whole purpose of forcing banks to take bailout money was specifically so that the govmt could claim some ownership of bank business decisions.
Government is clearly exceeding its authority.
Seems to me this whole cataclysmic disaster was provoked by people in the Gubmint (like Barney Frank) telling lenders who to lend to, regardless of whether it made business sense or nonsense. COMMAND ECONONOMIES DIRECTED BY “SMART” PEOPLE KILL “REAL” PEOPLE.
By the millions.