The banks have taken the bailout money, used it to buy from the Fed. Taken the spread earnings, which is 2.75%, and paid down the TARP money, thus allowing the banks to grant huge bonuses again to their executives as well as show a positive earnings balance this year.

Also, by making a profit based on a guaranteed spread from the Fed, the banks no longer have to take the risk of making loans to businesses or individuals.

So the banks are in the middle, making a virtually guaranteed spread by borrowing from the Fed (backed by the US tax payer), not lending to the public, and paying off TARP with Fed money, thus allowing them to award big bonuses to their executives.

It’s easy to show a profit when one receives hundreds of billions of dollars from the very tax payers that the banks will not lend money to.

And, unfortunately, Tim Geithner wasn’t experienced enough to put the tax payers anywhere near the top in his negotiations either with Wall Street investment houses or banks. He just didn’t know how the game is played by the big boys. That will hurt us tax payers for decades to come. We really shouldn’t have turned out complex country over to this administration.

I asked one young black woman I know how she felt about Obama at this point. She said, “He’s cute but a disaster as President. Just a lawyer who loves black people. But, not a very skilled person when it comes to understanding money.”

I suppose that sums up a lot of things.

Joan

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