$700 Billion Bailout Pocket Lining

Are you wondering when all those billions of dollars will make it from the pockets of the financial institutions suckling at the state’s teat to the street in the form of loans?  Possibly never, as the following question and answer, from a JP Morgan Chase conference call, illustrates.  The question.

“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?”

The answer.

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

From a New York Times article written by Joe Nocera titled So When Will Banks Give Loans?

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