February 3, 2009
The Facts
There have been many reports over the past two to three weeks about how recipients of TARP funds have not been using the money for its intended purpose; lending to consumers & businesses. Obviously, by now, we all know what they have used it for; to pay out bonuses, buy out other banks and reward stock holders, but hardly any for lending. But that hasn’t stopped their ardent supporters from defending them.
My View
At the very top of that list are the nattering nitwits at CNBC, with Erin Burnett as leader of the pack in this particular case. As I pointed out in this post, Burnett had one of her “hissy fits” a few days ago when certain guests were saying that banks were not lending money. Just another example of them and others simply taking the word of the banks instead of asking the latter to produce evidence. CNBC’s love affair with Wall Street has corrupted CNBC, and they refuse to give up regardless of the lies they are told.
The latest report on the banks not lending money came from several sources today along with this one from the Washington Post. The Post said “The federal government has invested almost $200 billion in U.S. banks over the last three months to spark new lending to consumers and businesses. So far, it hasn’t worked. Lending has declined, and banks that got government money on average have reduced lending more sharply than banks that didn’t”. Columnist Eugene Robinson calls them “Idiots of the Universe”. In that article, Robinson is trying to get a message to Wall Street by saying “Earth to Wall Street: It’s over, people. You had a terrific run, better than you deserved, but now you’d be wise to pay attention to those citizens outside, the ones with the pitchforks and the torches“.
The Wall Street Journal published a report on January 26, 2009 that said banks were not lending. Even the Treasure Department knows the banks aren’t lending. According to this article by CNN Money on January 20, 2009, Treasury asked 20 of the banks who have received TARP funds to start submitting monthly reports on their lending activity. And last, but not least, CNBC’s own sister station, MSNBC, published this article yesterday saying banks are not lending.
Practically every article that is published in defense of the banks lending practices is quoting lending stats from early 2008 to late summer of 2008, well before the banks received TARP funds. So it must be these reports that today’s No. 1 nattering nitwit, Erin Burnett, is reading. It certainly isn’t in the reports since.
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