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Dr. Peter Morici: Taxing grandma to pay Goldman Sachs ^

Posted on 04/15/2009 8:01:26 AM PDT by FromLori

Monday afternoon, Goldman Sachs reported much larger than expected first quarter profits, and this comes on the heels of Wells Fargo’s strong earnings reported last week.

No one should be surprised.

The Federal Reserve has provided the banks with lots of cheap funds through its various emergency lending facilities and quantitative easing.

The Federal Reserve has permitted the banks and financial houses to park vast sums of unmarketable paper on its books—securities made nearly worthless by the misjudgment and avarice of bankers. In return, the Fed has provided these scions of finance with fresh funds, cheaply, that they may lend at healthy rates on credit cards, auto loans and even mortgages.

While the Fed cuts the banks slack, the bankers are busy turning the screws on their debtors by raising credit card rates and fees, and harassing distressed borrowers with all the zeal of the Roman army sacking Palestine.

It takes good banking skills to borrow at three percent and lend at five and make a profit.

It takes much less business acumen to borrow at two and lend at five and make a profit, and that is exactly what has happened. The extra fees are just gravy.

Increasing the spread for banks is like subsidizing parts purchases for car companies. The folks at GM would look like wizards if the Fed had been similarly generous with them

(Excerpt) Read more at ...

TOPICS: Business/Economy
KEYWORDS: americapoint0; bankingcrisis; nationalization; smokeandmirrors; starkravingsocialism

1 posted on 04/15/2009 8:01:27 AM PDT by FromLori
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To: FromLori

Remember in 1992 when they claimed how bad the economy was and that GHW Bush “cooked the books” when efforts were made to challenge the MSM and then after the election we were told that things weren’t as bad as we’d been led to believe?

2 posted on 04/15/2009 8:06:22 AM PDT by a fool in paradise ( “Saving the New York Times now ranks with saving Darfur as a high-minded cause.”NYTimes Bill Kell)
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To: FromLori

total BS.

3 posted on 04/15/2009 8:43:52 AM PDT by Eric in the Ozarks
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To: Eric in the Ozarks
It always amazes me how many here in FR get upset when “corporate welfare queens” get unmasked...then the name calling starts.

Anti welfare and protectionist policies are only acceptable when the “elite” are the beneficiary...correct?

4 posted on 04/15/2009 9:05:48 AM PDT by mr_hammer ("Before you were formed in the womb, I knew you")
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To: mr_hammer
Goldman had no financial exposure to AIG or other losses that would have harmed its clientele. It acted as an intermediary for clients doing business with AIG and others, assuming risk on their behalf. The risk was hedged successfully via credit insurance. Had AIG failed, Goldman would not have suffered economic loss.
Goldman was forced to take "bailout" money (as Wells Fargo was) by the current administration under the peculiar "fairness" approach to all the big investment banks. Goldman has offered a new stock issue (now over subscribed)that when combined with their quarterly profit, will close out the federal loan with interest. Wells has also attempted to pay off its federal note early but has not been allowed to do so by the the Bambinos.
5 posted on 04/15/2009 9:42:56 AM PDT by Eric in the Ozarks
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To: Eric in the Ozarks

Then why the bailout’s to start with? The whole thing stinks...and we never did get a striaght answer from D.C..

We where told by Paulson, hand over the cash or the sky is going to we are to believe everything is coming up roses and no one ever really needed the money WTF...

Then if that is the case where is our 800 billion dollars?

...and we were never told who got how much, so how are we to believe what we are actually being paid back is in fact what was borrowed...the whole thing stinks and by the likes of today many other Amercian’s don’t like it one bit either.

6 posted on 04/15/2009 10:14:08 AM PDT by mr_hammer ("Before you were formed in the womb, I knew you")
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To: mr_hammer
Good question. Some of the banks were in deep kimchi but not all of them, least of all Goldman. No one in congress read the bailout package but every Donk believed it was a hurry up case.
Its like the "who's on first" routine with Abbot and Costello.
7 posted on 04/15/2009 10:18:10 AM PDT by Eric in the Ozarks
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