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Online resaler: Bailout terms will hurt banks

April 3, 2009 by  

Bailout terms will hurt banksRather than unfreezing the credit markets, regulations that come with the deals will stifle business and perpetuate the crisis, according to some industry insiders.

Foreclosure Warehouse, an online inventory of foreclosed homes for sale, has said the government funds include too many restrictions and controls on how banks should conduct their business.

"Every time the U.S. government gets involved with something, whatever it is becomes slower, costs more, and satisfies less," the company has said in a statement.

It also added that keeping insolvent banks in business further weakens the financial system.

The company has added its voice to the ongoing debate about the merits of the bank rescue plan and the scope as well as extent of banking sector reforms.

The administration’s actions, including the economic stimulus bill that will cost over $1 trillion and several rounds of financial institutions bailouts, have attracted much criticism.

Recently, former Speaker of the House Newt Gingrich called on the government to return to capitalism’s basics by allowing failed companies to go into bankruptcy instead of pumping taxpayers’ money in to keep them afloat.
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  • Dahlby

    This is exactly why the government should not be involved in Private industry. This is a group of people who have never been in the trenches, with some exceptions, and had to actually work for their own income. If it wasn’t for the military I cannot think of one program that is run by the Federal Government that actually functions effectively.
    As Americans we need to get rid of the Congressional Monarchy that has been established and elect new blood.

    • ellspeth

      My opinion for many years has been that our government folks need to get real jobs and quit living off the taxpayers they feel no loyalty to. I think that no matter how good, bad, or indifferent a politician is, he/she should be limited to 2 terms just like the President. Not only would it keep new blood in government, but it would get the most expensive “welfare” (don’t politicians live off the taxpayers just like other welfare recipients?) cases back to work in real jobs within a few short years.

  • JY

    You need only look at how you would teach your own children about personal responsibility and money to understand how this government has gone astray. When a child is an infant up to when he is an adult, you support him in various ways to teach them personal responsibility. As a youngster you have to be firm…aka the basic laws of the land. As a budding adult or an adult who fails at a task you have to be firmer to make a point and most times that means letting them fall on their face still supporting without destroying their entire life…aka bankruptcy. But when a child is an adult and there is no longer that control by the parent and failure occurs, this is when the adult must accept responsibility for his or her OWN actions… Failure or going out of business may the best result. This is best for the society as in the end everyone grows stronger.

  • TeresaE

    Until Congress takes responsibility for two failed (proven failures, just look around) and disasterous, financial legislative fiascos, all the new regulation and bank greed isn’t going to fix anything.

    We were encouraged for a decade to take free, or nearly free, credit. Buy it now! Expand Your Business! We the banks got your back! Then, in 2005 Congress changed the rules and Bush, having never (up to that day) found a bill he could say no too, made it law.

    The bulk of the new rules (increased minimum payments, removal of usury, confiscation by the bank of the property) hit and recession started within a couple months.

    Cheap credit hid the fact that the banks and Wall Street sold out our economic powerhouse-manufacturing-and replaced it with free credit.

    And the banks CONTINUE to do the same thing. My company has never missed a payment, never been late, and Bank of America pulled our mortgage note & our business line of credit. The certified letter telling us that we need to pay off commercial mortgage NOW arrived the same day the BoA CEO was all over the news talking about “increased” lending.

    Farkin liar.

    And the Americans you describe are too busy texting each other to demand this game stop now.

    No jobs, no money, failed government and rich, bankers. Love it.

  • Stewart

    The Fed has to go. It is, and always has been, a political tool for our ‘leaders’ to use to buy votes. By lowering rates at a time (over and over again) that credit should be restricted and savings encouraged, business downturns are extended for up to 15 years that should correct within12-18 months (witness the recession of 1921, where the government stepped aside and let the market fix itself. Compare that with what happended to us in the 1940′s, wht happened to Japan in the 1990′s. Government stimualtion of spending when we should be saving and retooling our manufacturing infrastructure is insane policy.

  • Dirty Harry

    The Fed needs to go but we can not allow the administation to have the power grabbs on private sector either. If Obama is to be taken at his word then he raised 600 million plus from idividual people. If that is the case then companies should be able to lobby or contribute just as much as the unions or anyone else to capaign funds. Why cap anything ? If we can’t depend on the news media being fair then all parties should be allowed to spend an unlimited amount to get their message out. We were snookored by the media to elect all of these people like Barny Frank in the first place.

  • Mike Stafford

    Let’s face it: this can not be allowwed to continue. There is no way around it, government – under any and all conditions – is a parasite. Some parasites contribute something of value to the host. The host must produce something in excess of its own needs in order to support the parasite. As long as the parasite contributes more than it sucks, the host is safe to allow it to persist in its place. But if the parasite becomes too big or transforms into a destructive form or comes to occupy a position dangerous to the host, something has to change regarding the parasite or the parasite will destroy the host.
    Socialism is clearly parasitic and can only exist on a “for-profit” host. If the parasite steals from the host more than the host produces the host will die. If the parasite kills the host the next victim is the parasite – since it can not produce for itself.

  • MrPitchfork

    Has anyone ever thought that maybe this is what the “government” wants to do to the financial system? Hasn’t any one heard of the one world order? Do you think maybe that will be a financial one world order??

    Makes sense to me..

  • Beepster

    This is Socialism at it’s finest. From what I’ve found, the banks are NOT allowed to start repaying their debts, or they will have audits and regulations crammed down their throats. What this boils down to is nationalization of the auto industry, banking, and wall street. Already talk of a world currency by Oslammer. Then joining the US, Canada, and Mexico.

  • Bob Livingston

    The Obama bailouts are only a modern-day version of what Franklin Roosevelt did in the early thirties.

    Actually the term bailout is a euphemism for printing press money spewed out by the bales. This is a cover for the biggest transfer of wealth in history.

    Bailouts didn’t work in the thirties and they won’t work now. The following quote from Henry Morgenthau Jr., Secretary of the Treasury, on May 30, 1939 said in a meeting of Democratic members of the House Ways and Means Committee: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this administration, we have just as much unemployment as when we started… and an enormous debt to boot!” Taken from the Morgenthau Diary, May 9, 1939, Franklin Roosevelt Presidential Library.

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