Posted by
rycK on Monday, February 02, 2009 10:36:57 AM
The Fed is After
Your Money Using the Scam Called “Capital Purchase Program “
Your
banks are being scammed by the New Socialist Government. They have set up a Capital
Purchase Program [1] that will ensure
your banks lose money and halt dividends to shareholders. The fear of fear has been
satisfactorily exploited and used to infect the logic and business practices of
banks that were never into the risky investments that caused many to fail. We
have 6000 sound banks that have no reason to fear a melt down, but, for
political reasons, these banks are now the latent stooges that will be forced
to make ‘loans’ probably in the spirit of continuing the CRA [Community
Reinvestment Act], the very process that brought
zero-down mortgages to illegal aliens, people with little or no credit, drug
addicts and criminals. The bankers have been intimidated into mouthing clumsy
excuses and singing fairy tale logic like this:
“"We didn't know what we don't know," said Ted T. Cecala, chairman
and CEO [of WSFS Bank] . "We knew the economy was slowing. It began to slow
much quicker as we got into the fourth quarter. ... We did not know how long or
how deep this recessionary period might be."-- Treasury boosts Del. Banks WSFS, Wilmington Trust get cash
infusions by Eric Ruth • The News Journal • February 1, 2009. [Emphasis is mine in
all quotes.][All quotes in this essay reference this link unless stated
otherwise.]
"In the end, we didn't need the capital," said Mark A. Turner, president and CEO of WSFS. "We had plenty of capital by regulatory standards and by
market standards."
We now wonder if you know what you ever knew given an
analysis of that statement Mr Cecala. So, not knowing is worth accepting
money with lofty socialist strings wrapped around the sticky bundles that force
banks to ask permission to change dividend levels and place salary restrictions
upon the business leaders.
The financials of
this deal reek with phony government spending mandates and predictable business
loses, as we could expect from the Obama organization who supporters cheered
loans just sprinkled around like popcorn in the inner cities. Such phony
mortgages were summarily routed into Fannie May Bad Debt Dumpster where they now rot as toxic assets and have caused much of this problem.
The proponents of this destruction of the economy by giving away mortgages to
the ‘poor’ is known as ‘affordable
housing’ and was pushed by Barney Frank, Maxine Waters and others of the far
left.
This new
legislation attempts to eliminate golden parachutes and bonuses according to government standards
although Franklin Del Ano Raines got away with $90,000.000 from Fannie Mae. It is nothing more than price control. This
stimulus plan is a cheap scheme to steal your money by forcing banks to accept
worthless printed paper, or, to be more precise, money that will be worthless
or near so when the inflation blizzard hits.
There is no way for the banks to profit from this:
“"We are now much more subject to the whims of what goes
on in Washington than we were before," Turner said.”And that's not something
we take lightly."
“The program will be a benefit for the
system and individual banks, but it will come with a cost, local bankers said.
"If you treat it on a pretax basis, it's about a 12 percent cost [associated with the investment]," Turner said. "That's
not cheap money."
The banks will lose money:
This means the
federal banking system is going to force small banks to loan out money,
probably, again, to those with poor credit during a recession and that this
money will be at high risk and unaffordable at 12% so the banks will be forced
to subsidize the mortgages and lose money. They will now lose about 7-9% on that money
and have to put up with government oversight as well. That is the kind of Obama
Economy we can look forward to: Socialism.
The $330 million at Wilmington Trust in Delaware looks like a loss of about 28 million
dollars and for WSFS it looks like about a 5 million loss for their unwanted $52.6 million.
Let us all realize that this money is JUST PRINTED and has no backing. Printing
money is highly inflationary.
This is all just part of the Obama
Marxian/Socialist plan to ‘redistribute the wealth’ by giving money to the low
class and making the taxpayers pay for this essay in social engineering.
We want to know if the CRA is still in force, whether there is a
quota system for loans to people with poor credit ratings under this Capital Purchase
Program and what the details of these forced agreements are. WE need to
publicize the fact that the Obama Administration is wildly printing money and
using it to reward his constituents using taxpayer and bank money. If the bank
dividends are diverted to pay the excess costs of these phony government
mandated loans then we will be back in an economic black hole and will remain
there.
Sell your shares in WT and WSFS as soon as possible as they are now ensured to lose money and
become mere zombies for the socialist left.
rycK
Comments:
ryckki@gmail.com
“Bear
Stearns made the first public securitization of Community
Reinvestment Act (CRA) loans started in
1997.[6] Editorialists in some American
newspapers[7][8] and US Congressman Ron Paul[9] say the CRA loans were lent to
otherwise un-credit-worthy consumers in the name of ending discrimination,
although an analysis of actual lending patterns does not generally support this
conclusion.
On June 22, 2007,
Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail
out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund,
while negotiating with other banks to loan money against collateral to another
fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[13] The funds were invested in thinly
traded collateralized
debt obligations (CDOs)
found to be worth less than their mark-to-market value. Merrill Lynch seized $850 million worth of the
underlying collateral but only was able to auction $100 million of them. The
incident sparked concern of contagion as Bear Stearns might be forced to
liquidate its CDOs, prompting a mark-down of similar assets in other
portfolios.[14][15] Richard
A. Marin, a senior executive at Bear Stearns Asset Management
responsible for the two hedge funds, was replaced on June 29 by Jeffrey
B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.[16]
During the
week of July 16, 2007,
Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of
their value amid a rapid decline in the market for subprime mortgages.