You have all heard the saying, “Bohica!” Which stands for bend over, here it comes again. Well, it appears that the bailout of yours and mine funds to banks, has found itself getting spent in ways never intended. Imaginary that!
In a recent article in the Washington Post, it appears that banks are set to use the bailout funds to pay their dividends this year. To the tune of a few billion dollars give or take a few million her or there. Yes, the money that was needed in Bush’ dire emergency is now going to be used to pay dividends. No word on lower interest rates for borrowers or helping those facing evictions. What next building renovations?
Previously told by Congress that this was not what the money was to be used for, it appears Congress is taking a different approach as the Banks prepare to use the funds. Congress is now saying that the funds will help keep the banks stable and then they can begin to use other funds for what they were intended for. Cut me a break.
The next time the government gives you a check, just consider it no strings attached! No wonder GM and Chrysler are looking for funding to sweeten the deal regarding their merger. “If it was only more financially attractive to investors!” I mean good old Uncle Sam seems to be having no problem borrowing your money.
Let this be a warning however to the rest of you. As credit for you and I tightens to the point that unless your credit score is 800 or higher and you have forty percent to put down, your not going to get the money. Many of the banks on the other hand seem to have developed a blurred line when it comes to capital accounts and profit accounts. Yes there are a few banks that are saying they will not be using the bailout support to pay dividends but once one starts it not going to be long before boards start asking why aren’t you using the money for dividend?
The original price of this support to the banks was that the Government would end owning a piece of the bank. Some say if that is the case then the dividends will come right back to the government, in a type of quid pro quo arrangement. It doesn’t take to long to figure out your going to need a railroad train long car load of lawyers to get this straightened out. One has to wonder if that wasn’t the plan all along.