Small Business, Loan Sharking TARP, and a Lesson in Inflation for OMGObama
OMGObama may not know it but he is a huge proponent of rabid inflation. At least after promoting this he is.
Big banks that got big bailout bucks should return the favor by lending more to qualified small businesses, President Barack Obama says.
In his weekly radio and Internet address Saturday, Obama said too many small business owners remain unable to get credit despite administration steps to jump-start lending, which was virtually frozen when the financial crisis took hold last year.
"These are the very taxpayers who stood by America's banks in a crisis, and now it's time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs," Obama said.
"It's time for those banks to fulfill their responsibility to help ensure a wider recovery, a more secure system and more broadly shared prosperity," said Obama.
The president said the administration will "take every appropriate step to encourage them to meet those responsibilities." He did not specify what those steps might be.
Wait a second here, Mr President, has no one clued you in on what's going on here? I sincerely hope that last line is not a threat.
Here's a lesson in money creation for our dear President that even a kindergartener could understand so you're free to pull Timmy over and read it aloud to him as well, Mr OMG:
So late last fall when the shit hit the proverbial fan, the Fed came running in with the monetary firehose to flood the system with the liquidity they thought our financial system needed to survive. Some argue that there never was a liquidity crisis but that's Advanced Financial Crisis sort of stuff and we're trying to stick to the basics here.
When they did that, they had to conjure up money from somewhere - where do you think they got it from? Well they made it up!
Now here's the part where it gets dangerous, you two, please pay attention. The banks are sitting on all of this funny money (or rather the Fed is squatting on it for them) and so far it seems to be working out well for them - they appear to be well-capitalized no matter how frightening their risk-taking activities may seem, the Fed gets the credit for saving the financial system and the sheep stay tame because minus this money moving, inflation is thus far kept at bay.
But once that money hits the open air, pffffft.
So you keep saying you want banks to "do their part" and lend to small business and see what happens. Inflation affects everyone, idiots, even bailout recipients AND the taxpayers who lined their pockets.
I sincerely hope that little lesson helps.
Anyway, there might be some TARP money left and if OMGObama can't strong-arm the banks into lending (it's like a bad gangster movie sometimes, not that I would know), there's always Plan B I guess.
American Banking News:
If you’re a small business in trouble and you have hopes of receiving some type of government aid via TARP funds, I would be cautious about managing your expectations and looking to other sources or your own ingenuity to battle your way out of the economic crisis.
While reports have come out that the Obama administration is looking to encourage small business lending by smaller banks through using some of the TARP money available for investment, you read through them and wonder why even bother bringing it up at all, as there seems to be so many caveats to it that there is little hope of true main street small businesses will be the beneficiaries of it.
For example, the definition of one unnamed senior administration official of small business is those with assets of $1 billion or less. Small business is now defined as up to $1 billion in assets. Guess who’s going to be the priority businesses receiving that money if it is indeed offered? Not main street businesses, that’s a given.
Of the original $700 billion in U.S. Treasury’s Troubled Asset Relief Program which was approved by Congress, about $138 billion remains, according to estimates of the special inspector general of the program.
Pfft, a measly $138 billion? That's not going to get small business very far anyway, and what are the terms of this loan? Does the administration believe it can throw money around like a leash expecting the Fed and Treasury to come in and regulate recipients to death? That doesn't sound like very much fun to me, thankfully my small business wouldn't qualify and my boss is too smart to talk to loan sharks like this anyway.
Here's some IAMX for you, sir. Good luck with whatever the hell it is you're trying to do.