Comments on: Is the bailout partially responsible for destroying my industry? http://ethxbiz.com/is-the-bailout-partially-responsible-for-destroying-my-industry Ethical Resources For Ethical Small Business Owners Sun, 08 Jan 2012 00:00:29 -0600 http://wordpress.org/?v=2.9.2 hourly 1 By: simplicitus http://ethxbiz.com/is-the-bailout-partially-responsible-for-destroying-my-industry/comment-page-1#comment-2920 simplicitus Sun, 20 Dec 2009 04:12:36 +0000 http://ethxbiz.com/is-the-bailout-partially-responsible-for-destroying-my-industry#comment-2920 I wouldn't say say so. Banks aren't liquidating distressed properties because there is no benefit in their doing so. If they sell at $.10 on the dollar, they don't get much back and they have to recognize the loss on their books. That would make them all bankrupt. As long as the banks don't actually sell the assets, they can pretend they are worth more than what the market is willing to pay. That makes them look solvent on paper. So the banks can't afford to dispose of the assets at current market value. That's why the assets have been termed 'toxic" As for no loans meaning no business, it isn't just you. That's why the Fed and the Treasury Dept have been doing everything they can to get banks lending, without all that much success. http://www.nytimes.com/2009/12/13/business/economy/13rates.html In fact, even with the increased government borrowing, total borrowing is down. http://economix.blogs.nytimes.com/2009/11/17/summers-the-chinese-and-the-deficit/ http://www.federalreserve.gov/releases/z1/Current/z1.pdf I wouldn’t say say so.

Banks aren’t liquidating distressed properties because there is no benefit in their doing so. If they sell at $.10 on the dollar, they don’t get much back and they have to recognize the loss on their books. That would make them all bankrupt.

As long as the banks don’t actually sell the assets, they can pretend they are worth more than what the market is willing to pay. That makes them look solvent on paper. So the banks can’t afford to dispose of the assets at current market value. That’s why the assets have been termed ‘toxic"

As for no loans meaning no business, it isn’t just you. That’s why the Fed and the Treasury Dept have been doing everything they can to get banks lending, without all that much success.
http://www.nytimes.com/2009/12/13/business/economy/13rates.html
In fact, even with the increased government borrowing, total borrowing is down.
http://economix.blogs.nytimes.com/2009/11/17/summers-the-chinese-and-the-deficit/
http://www.federalreserve.gov/releases/z1/Current/z1.pdf

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