Why do big banks want to pay back the bail out money early?

Question

Is it because President Obama's economic policy is so successful and the economy is turning around sooner than expected.

http://news.yahoo.com/s/ap/20090519/ap_o…

Answer 1

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Answer 2

They don't want the controls??

Answer 3

It's probably because they didn't want the money in the first place, were forced to take it and the rules that came along with it, and want out as soon as possible. Link!

Source(s):

http://www.earthtimes.org/articles/show/…

Answer 4

No, it's because they don't want to have to answer to the government for every little move they make, and the bailout money obligates them to do that.

Answer 5

Hardly. It's because as long as the money is in their hands, the government can rule their every move. They don't want to be nationalized. If the economy is so great...why won't this administration LET them pay it back? I really do wonder about that one, so if you have an answer, it would be very much appreciated.

Answer 6

...the banks that pay it back first, will be the ones that investors flock to.

Answer 7

The reason why firms want to pay back the TARP is because gov is changing the rules on the money; telling companies what they should be doing, how to run their business, cap compensation, etc.

Those who did not get bailout money are gaining top employees from TARP member firms which can place the TARP firm at a competitive disadvantage if you start losing top talent.

Like it or not, this is the talk from the major firms wanting to PAY BACK tax payer money with interest.

FACT:
Wall Street does not want to be socialized or controlled by the gov.

FACT:
Some firms want to get out of gov debt and pay back the money to tax payers.

Question:
Why would the US Gov prevent someone repaying a loan?

Answer:
Because they want control over that business.

What about the TALF, what about the loan guarantees which far exceeds the TARP and TALF and why is no one is discussing that end of it? Can that be repaid too?

The US Gov, Treasury, the FED, FDIC, has over $10.5 TRILLION in bailouts, loan guarantees, loan-loss guarantees, back-stops, collateralize debt, and other debt backing.


CHECK THIS OUT. Hold on to your wallet!

*** Bailout Tracker (CNN) ***
http://money.cnn.com/news/storysupplemen…

NOTE: (link above)
US gov funding in "Foreign exchange dollar swaps" - Guarantee: "Unlimited." How much is unlimited funding guarantees going to cost tax payers?

Also the US Gov is guaranteeing over $5 Trillion of mortgages via Fannie Mae and Freddie Mac. This number is not included in CNN's math above.

"The companies (FNM/ FRE), which together own or guarantee about $5 trillion in home loans, about half the nation's total, have lost $14 billion in the last year and are likely to pile up billions more in losses until the housing market begins to recover."
http://www.huffingtonpost.com/2008/09/07…

"U.S. seizes Fannie and Freddie" (09-07-2008)
http://money.cnn.com/2008/09/07/news/com…

Remember to add the new budget deficits. This is a COST to tax payers too.

So, not including the current and ongoing Federal Budget deficits, we are looking at a total of $15.5 TRILLION in tax payer backed guarantees.

Current National Debt: $11.2 Trillion
http://www.brillig.com/debt_clock/

This $700 Billion TARP fund is not the entire problem. Nor is it THE problem.

Allow anyone who takes out a loan by free will or by force to pay it back. We need the money.

TARP -Troubled Asset Relief Program (TARP):
Gov technical speak:
http://www.treas.gov/press/releases/hp12…

TARP - In English
http://en.wikipedia.org/wiki/TARP

TALF - Term Asset-Backed Securities Loan Facility (TALF)
Gov technical speak:
http://www.federalreserve.gov/newsevents…

TALF - In English
http://en.wikipedia.org/wiki/Term_Asset-…

Source(s):

--- Finance & Risk Management Consultant
--- 20 years in the markets (see bio for more. add me to view post history)

Answer 8

"Some financial experts say pricing the warrants at anything less than their market value amounts to a massive giveaway to the banks at taxpayers' expense. In addition, by selling the warrants now instead of waiting a few years, the government risks missing out on the upside once the financial crisis subsides and bank stocks recover.

"Taxpayers have incurred significant risk and so should get significant returns," said Sung Won Sohn, an economics professor at California State University, Channel Islands. "I think it's too early for the government to be cashing out today."

From your own source.

Answer 9

Probably because the govt. money put limits on how much money these executives can make. Not all banks needed the money but were forced to take it by bush's treasury sec. The logic was, if a list of banks that took money was published, it would show they were in trouble and create a "run" on the bank where everybody would withdraw their money. So everybody was forced to take it. That's funny, a free-market republican treasury secretary forcing banks to sell stock to the govt. Sounds like bushy was a socialist to me.

Answer 10

No. It is because they do not want the Government controling their private Business. Obama is trying to take over the private sector through lots of strings. "Oh you can't pay that money back, we the Government will take some stock instead." They have done this and now CONTROL may private businesses.

Obama is a liar and a thief and wants to overturn the US Constitution and become KING. I hope he get out of office sooner than 2012 before we no longer have a country.

Answer 11

many of them are in better standing already and showing positive growth..so probably

Answer 12

No, I think it's because they are starting to realize that Obama's agenda is to buy them out and take over control, and they're just giving him back his "deposit".

Answer 13

I think it's because they don't want to pay higher interests. Those bailouts all have to be paid back with interest. It's like credit card bills. The more outstanding debt you have, the more interest will accumulate.