Tuesday, October 14, 2008

The American People Now Own Shares in 9 Banks

It seems that we are now the proud owners of shares in 9 different US Banks.

The nine initial banks participating are Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase, Bank of America Corp, including the soon-to-acquired Merrill Lynch, Citgroup Inc., Wells Fargo & Co, Bank of New York Mellon and State Street Corp.

At a briefing, Treasury officials said that the first purchases of stock from the nine major banks will begin within days and will total $125 billion. The government expects to spend the entire $250 billion slated for the bank stock purchase program by the end of the year.

They seem like pretty good organizations and hopefully we will get a decent dividend on the shares we just bought. I'm just glad it wasn't a rogues gallery of junky, nearly dead regional banks or some other risky bet. Plus it seems the FDIC got into the loan insurance business as well. Now we need to get into the credit ratings business and we would have a clean sweep.

In addition to the stock purchases, the Federal Deposit Insurance Corp. will temporarily provide insurance for loans between banks, charging the banks a premium for doing so.

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