Political Voice

Defending the Separation of Laws! Keep Fanatics Off OUR Constitution!

Hot Money [Broker Desposits] Continue to Grow at Tax Payer Expense

These companies, bankers, created the economic mess, right?  They get a bail out [stimulus package] and these people are saying “were paying the money back,” well, sure your paying the money back, but it was given to help prevent bankruptcy because they were already in default!

Many were are in default, so they received help from the Tax Payers [stimulus package]!

Okay, so they’re paying it back, but that Tax Payer money helped them out!

Right now, people are having a hard time because of the economic difficulties brought about by these bankers, yet people who are currently in default because of the economic hardships brought about are NOT getting a Stimulus Package to help them out!

They’re so quick to say they’re paying it back!

So, why can’t these bankers help others protect their credit by working with them, so they to do not go into default of their loans or credit? 

Why are these bankers so quick to destroy OUR credit as a result of economic hardship brought about from these bankers, when they get help to prevent bankruptcy after being in default, but they don’t want to help the People who helped them prevent bankruptcy, and are quick to report it to your credit rating when we go into default?

Ambitious Small Banks Get Wads of Cash and Loads of Trouble

H. Averett Walker used hot money to turn Security Bank from a sleepy Southern lender into a regional powerhouse. Darrell D. Pittard used hot money to jump-start his brand-new MagnetBank, allowing it to lend hundreds of millions of dollars even though it did not have a single drive-up window or even a customer with a checking account.

It is a formula being replicated at banks across the United States.

Rather than simply wooing local customers, they have turned to out-of-state brokers who deliver billions of dollars in bulk deposits, widely known as “hot money,” from investors nationwide. In fast-growing regions like this one in central Georgia, the money produced record bank profits and financed whole new communities, built at a phenomenal rate.

But the hot money also came with a high cost. To lure the money from brokers, banks typically had to offer unusually high rates. That, in turn, often led them to make ever riskier loans, leaving them vulnerable when the economy collapsed. Magnet failed early this year and Security Bank is barely hanging on.

Though few people have heard of it, hot money — or brokered deposits, as it is also known in the industry — is one of the primary factors in the accelerating wave of failures among small and regional banks nationwide. The estimated cost to the Federal Deposit Insurance Corporation over the last 18 months is $7.7 billion, and growing.

Advertisements

July 4, 2009 - Posted by | Rant | , , , , , , , ,

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: