The Charleston Post and Courier is reporting that, the Treasury official overseeing the government's $700 billion financial bailout plan on Friday defended banks that want to use federal money to buy competitors.
Treasury doesn't want to "micromanage" banks that get capital infusions under the bailout, Neel Kashkari said. If a large stable bank acquires a community bank that is struggling, the smaller bank's ability to lend is preserved, he said.
Well Cedar Posts says "I've never seen such a large amount of BS spelled out in so few words."
Community Banks are not the trouble, it's the larger banks who invested millions in debt equity swaps, collateralized mortgages and derivative investments, sub prime mortgages, and credit card debt.
Of course prior to joining the Treasury Department, Mr. Kashkari was a Vice President at Goldman, Sachs & Co so what could he know about community banks?
But the madness doesn't stop there, Kashkari who runs the Troubled Asset Relief Program, or TARP, (ironic isn't it kinda like a crime scene with a body under the tarp)is faced with addressing many concerns.
Among those were concerns about whether banks that sign up for government capital would in fact use the money for what it was originally intended - lending to consumers and business.
Kashkari noted that money has not even been released to many of the participating banks yet so that it was still too early to see the effect of the capital purchase program.
"The first piece isn't even out the door yet," he said.
Cedar Posts asks WHAT? Wait just a second, wasn't there a big rush to do something right away? Was not congress told to pass the bill or the world was going to end? That we needed to inject billions of taxpayer dollars into the system or else?
There has also been talk in recent days that the program could be extended to insurance companies and other specialty financial firms as well as to companies in other sectors, most notably struggling automakers.
You know the old saying if it smells and looks like? Well it is!