President Obama has told US Banks, "We want our money back and we are going to get it". This new tax which will total about $90 billion will be collected from the top 50 banks over ten years. It will impact the top six financial institutions (JPM, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo) the most. The tax which is based on liabilities will cost each bank about 15 basis points on every loan that is written. Why isn't the goverment asking General Motors, Chrysler, Freddie Mac, and Fannie- Mae to pay this tax?
It seems to me that the Democratic President & Congress are trying to win votes by blaming Wall Street for the Great Recession of 2008-9. I can remember that all of these banks borrowed money from TARP and repaid it in full with interest prior to the end of 2009. The President feels that if the banks have enough money to pay huge bonuses, then they should pay this new tax. Are we going to tax Exxon for making too money on oil? I believe that populist laws like this will lead to a slower economy and potential disaster. I thought we were worried about banks' loaning more money and unemployment. This new bank tax program will not get us there.
Random thoughts...The January indicator for 2010 market performance is doing extremely well ...Earnings from Intel and JPM were excellent and will lead to higher prices later this year for those stocks...next week other financial companies like Goldman Sachs, Citi, Morgan Stanley & Bank of America report on 4Th Quarter 2009 Earnings.....the Big event next week may be the surprise election of a Republican Senator in Mass. to take the late Ted Kennedy's senate seat....
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