confused, us banks paid back all the bailout???

TigerUK

TigerUK

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Aug 23, 2008
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really confused with this, was listening to the joe rogan podcast, and they mentioned that all the bailout money has been paid back, was confused by that and searched online and there it was several news items saying all the money has been paud out.

As Biggest Banks Repay Bailout Money, the U.S. Sees a Profit - NYTimes.com

now something doesnt seem right, if they were able to pay back 5 billion in a year, surely there was no no crisis to begin with?

it just boggles my mind

what is really going on here?

has all the money really been paid off?
are we going to see the us economy recover now?
or can it slide back?

All of this sounds really fishy to me because here in the uk, we're talking about whole generations having to pay more taxes and take the burden of the bailout for the next 20-30 years.

I'm sure the UK isn't any worse off than the US, our banks have very similiar trading practicises.

I don't know how US banks were able to come up with 4 bil just like that??
 


As far as I understand it, it is only really paid back on paper.

Securities with values of $0.01 are still being valued at $100 according bank's balance sheets, which is why they are appearing to be OK, but they are actually insolvent.

Not to mention shitloads of these securities are on federal reserve and Bank of England balance sheets, also valued at $100 when they could only be sold for $0.01.

It's all bullshit, it's the government fixing the prices of bank's assets when market values would make them go bust.

They might have paid back the actual money, but that is nothing compared to their actual liabilities.

Not to mention they could only pay that money back by taking out loans at 0% interested from the government. How easy is that? They are liable for billions of dollars then they just borrow at 0% and pay it back? From printed money? Yeah right.

Please someone explain if I am right.
 
I think dsm56 is basically correct.

Imagine the government giving me a $5,000 loan bailout which I use to pay for a website I had created. Now imagine the Federal Reserve creating $10,000 out of thin air and using it to buy my website that might fetch $1,000 in the free market.

I can now pay back the government and have money left to still be in business. This makes the government and I look successful, but in reality what has happened is that the American people have given me $10,000 for a $1,000 asset.


Can the Fed unload its toxic assets successfully? - CSMonitor.com

Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts


Everyone from the tea party, to occupy wall street, to Fox News talking heads who spent hours complaining about a few million for NPR - they should all be united against the Federal Reserve having the power to be able to secretly do massive things like this.

Joe Rogan is usually more aware than the average person of stuff such as this, so it's depressing if even he doesn't know about it.
 
The monies were all paid back. However, what wasn't paid were the toxic debts that the US purchased.

The bailout loans which made the most headline news (because the massive numbers) were actually not so bad. From a financial stand point it made sense for the government to do it. The government forced most of the banks to take the loans even if they didn't actually need them and charged a nice interest rate.

However, what didn't make sense and is going to have lasting issues is the purchasing of toxic debt. The US purchasing all of the MBS and other shit that was packaged in those debt securities is what can/will screw the dollar.
 
Each bank was allowed to borrow billions from the Federal Reserve at .5% interest.
They then purchased Treasury Bills from the US Gov't at 3.5% interest.

They said LOL arbitrage and paid back the money after earning plenty of free interest from the taxpayers.
 
TigerUK said:
really confused with this, was listening to the joe rogan podcast, and they mentioned that all the bailout money has been paid back, was confused by that and searched online and there it was several news items saying all the money has been paud out.

As Biggest Banks Repay Bailout Money, the U.S. Sees a Profit - NYTimes.com

now something doesnt seem right, if they were able to pay back 5 billion in a year, surely there was no no crisis to begin with?

it just boggles my mind

what is really going on here?

has all the money really been paid off?
are we going to see the us economy recover now?
or can it slide back?

All of this sounds really fishy to me because here in the uk, we're talking about whole generations having to pay more taxes and take the burden of the bailout for the next 20-30 years.

I'm sure the UK isn't any worse off than the US, our banks have very similiar trading practicises.

I don't know how US banks were able to come up with 4 bil just like that??
Click to expand...
They borrow from the Federal Reserve at obscenely low rates. So it's to their advantage to simply borrow from the Federal reserve then pay off the loans with that money.
They essentially paid us back with our own money. Calling the debt "paid off" is misdirection and nothing more.

...and that's not even counting all the shit assets they offloaded onto us and the semi-governmental organizations.
 
There is nothing to be confused about here; this is exactly what you should expect from a government-controlled FIAT money.

Step 1: Create $XX Trillion dollars from thin air, and declare that the price of a loaf of bread is worth about 50 cents with this amount of funny money in circulation.

Step 2: "Loan" $X Trillion MOAR dollars per year to banks as a tool for keeping the economy afloat. This GRADUALLY keeps the price of bread rising, let's say a nickle a decade.

Step 3: In case of corporatism-caused economic failure, create another large lump sum
of $X trillion to give to the banks so they can overcome their failure.

Step 3b: The banks, whose business model is described in step 2 above, does what it does best and "borrows" it in order to repay this debt.

Step 4: The price of a loaf of bread eventually reaches $10 and more.


It should surprise no one at all who is paying attention that the banks would get money from the same place that they always get it in order to repay this loan.
 
They paid them back because there where stipulations limitiing executive pay and bonuses until the bailout was paid back. Basically the perfect incentive to make them pay that loan back first. Also many of them didn't even want the money and just took it because the government shoved it down their throats.

If you look into the crisis the reason for the bailout was so that the banks would be capitalized enough to loan out to businesses more as if the ability for businesses to get credit stopped that would be the nail in the coffin of the economy. So they took the money, gave out some loans but paid it back asap so they could get back to their multi million bonuses yearly.
 
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