Have you heard about the possible bailouts that government is doing to help financial banks and markets to recover? I bet you did, but how can you get that loan you need.

In short, you can’t. But wait, didn’t banks receive $25 billion? Yep, they did, but not to lend! Christmas came early for some banks with government infusion. What banks are doing is to buy out smaller banks. It is easier to use government money right now to use that money for something else that loan which cannot be resold to Wall Street.

With approaching global recession banks are staying away from lending. They are simply sitting on the $25 billion loans and doing nothing.

The Treasury wants banks to acquire each other as they want not to only stabilize the industry, but to reshape it as well. If banks are buying each other, where are the money to make loans? Treasury is adding more and more money to further encourage banks to buy each other and it put tax breaks, worth billions, to banking industry with one purpose, to encourage bank mergers. Continue reading →