Invest in Community Financial Institutions

[Joanne98]

Congress approved the release of the remaining $350 billion in TARP funds to address the financial meltdown. One has to assume that much of the money will follow the same trip into the void that the rest has. Money going into the financial markets has to go somewhere else than where it is currently going. If we are going to throw money into financial institutions, I say let's throw it into community banks and credit unions, and not into big finance.

On January 6th David Goldman calculated that thus far $8 trillion has been thrown into the maw of the so-called bailout. This includes Federal bailouts and investments, and Federal Reserve inputs and loans. Eight TRILLION dollars.

http://www.opednews.com/articles/Invest-in-Community-Financ-by-Rowan-Wolf-090117-141.html

[naaman fletcher]

1. If you throw the money into communicty

institutions, which I generally approve of, as I believe that any company that is too big to fail is therefore too big in the first place, you don't fix the problem. The community banks still use their deposits to buy assets in an attempt to earn money off the the yield. That is, you get in a deposit at let's say 1.5%, you make money by loaning that money out at a higher interest rate. You lend some to local businesses and consumers, but you also need liquid securities on hand. Many of the community banks bought the mortgage crap from wall street in their own greedy attempt to earn extra yield.

So while I still agree with you, just be forewarned that it doesn't prevent this from happening again.