MarketSpeak

Last week, President Obama was on 60 Minutes and sent a message to Wall Street: no big bonuses when Main Street still has not seen its fair share of TARP support and no bonuses until all TARP borrowed is paid back in full.

A few days later, CNBC provides live coverage of the Wells Fargo issue of billions of dollars in bonds, allegedly to cover a portion of their TARP repayment to the government. Now this is interesting… and it somewhat worries me. We, the People, lent money to Wells Fargo so it could help borrowers through mortgage difficulties and help Main Street preserve jobs. Yet, Wells Fargo, like many other of its peers, only did this in part. At the same time, it benefitted from a 0% loan of billions of dollars and invested those dollars to reap easy interest. In such a situation, the longer they are permitted to sit on their TARP loan, the more money they make - all the while those who were supposed to benefit from this money also wait. There is no incentive for banks to trickle this money down to where it belongs.

So, President Obama’s message to Wall Street, last week, was to get moving on trickling this money down to where it belongs.

My impression is that Wall Street is VERY anxious to get the government out of its board rooms and wants to pay back TARP money as quickly as possible regardless of how it is done. So, a Wells Fargo, for example, will incur debt on the open market and possibly also dilute its shares in order to raise its “own” money to make the government go away.

Yet, Wall Street has not changed its ways. No policies have been implemented to avoid the errors of the past. Is this the time for government to go away? Furthermore, is this the right way to make it go away… by incurring more debt, and of a less secure and more costly nature? I’m confused. Maybe someone out there can explain to me why issuing bonds is a better idea than staying with TARP, financially?

In any case, President Obama’s message on 60 Minutes clearly designated entrepreneurs as that segment of society that is best positioned to enable the next phase of a turnaround by creating jobs. I have even heard that there is a program available that enables some small businesses to hire more employees and the government will pay their salaries as long as the employer pays the payroll taxes. I will look into this further and let everyone know what I find. In the meantime, if anyone out there has more information on this, please post a reply to this blog entry.

Now is a time where execution is key and money should be easier for entrepreneurs to obtain. Let’s see what happens over the next six months.