Bankers Think We Are Stupid (they might be right)

It was good news on the stock market today, even though the economy continues to skid downwards along a dangerous precipice. Part of that "good news" was carried by today's Washington Post front page. As mentioned in a previous post here of a couple weeks ago, participating banks in the Big Bailout are not required to use the money for anything in particular. They could use it to pay bonuses to overworked execs. They could use it for giving out dividends - hey!! That's what's happening:

White House Defends Handling of Financial Rescue Plan - washingtonpost.com

"The 33 banks signed up so far plan to pay shareholders about $7 billion this quarter... at the present pace, those dividends will consume 52 percent of the Treasury's investment over the initial three-year term."

While this sounds like a fine plan to keep bank shareholders and executives happy, it sounds like a terrible idea to use your tax money. This money was meant to enable capital-starved banks to start lending!! Of course, this would mean that such participating banks are capital-starved. For the most part, they are not; they are not lending because they don't trust their banking brethren. They are not money starved.

And if they truly are capital-starved, why are they using this money for paying out dividends?

So when Uncle Sam drops billions of unneeded money into their vaults, with no strings attached, what do you expect these folk to do? They are, after all, part of the crowd that created the mess we are in right now (both program planners and program beneficiaries). Dividends for everyone!! Laissez bon temps roulez!! Can I get an "Amen!" Can I get some bank shares?

Oh well. As we approach our election, let's give a listen to Wilco and their song, "Impossible Germany." Included in this clip is a small bit before and a longer bit afterwards of leader Jeff Tweedy waxing philosophic about the song and the songwriting process:

YouTube - Wilco - Impossible Germany

And now for our Quote of the Day:

"The government of my country snubs honest simplicity, but fondles artistic villainy, and I think I might have developed into a very capable pickpocket if I had remained in the public service a year or two" -- Mark Twain