BB&T embraces socialism
Scratch that idea, the Feds picked off BB&T too:
BB&T Corp. said Monday said the Treasury Department gave preliminary approval for it to receive financing as part of the government's $700 billion bailout of the nation's troubled financial institutions.What is worse, John Allison has abandon capitalism:The Winston-Salem, N.C., bank said it will receive $3.1 billion. In return, the government will get preferred shares that will pay a 5 percent annual dividend rate for the first five years. The payout will increase to 9 percent in the subsequent five years, unless the government redeems the stock. The Treasury will also get 10-year warrants to buy BB&T common shares.
The financing will boost the bank's capital ratio, which is a measure of its stability. Many banks have seen that ratio fall sharply as the value of loans on their books declines.
The government program aims to give banks enough money so they will increase lending to each other and to other businesses, unlocking the credit markets that have slowed economic activity.
CEO John Allison said he supports the government’s efforts to stabilize credit markets and restore confidence in the financial system by injecting new capital into banks. Allison has said BB&T may use part of its new capital to fund acquisitions.That is the most disappointing news I've read in a long time. BB&T had put up money in the past to promote capitalism, thanks in large part to the efforts of John Allison.“For us, the additional capital will not only extend and strengthen our lending capacity, but provide other strategic options as well,” Allison said.
Allison just spit on Ayn Rand's grave.
Comments
These companies may not have a choice. I know during the first round of these bank purchases, Paulson called in the management of the largest banks, spread out a sheet of paper for them to sign, and said that if they didn't voluntarily sell shares in their banks to the U.S. government, then the government was going to nationalize them.
Here's a column from the Wall Street Journal criticizing the first round of these "voluntary" stock sales.
Posted by: Doug | October 27, 2008 05:28 PM
True, but Allison says he supports it.
Posted by: Jason | October 27, 2008 05:32 PM
Jason,
Lemme put a gun to your head, I bet I can get a newspaper quote of you endorsing Saxby.
Even if they didn't want nor need the money, they might be subject to a shareholder's lawsuit for not taking advantage of such a large pile of easy money.
Posted by: Chris Farris | October 27, 2008 07:38 PM
I could have understood it if he made a statement expressing disappointment the bailout.
I understand that it was by force, but he did not have to agree with it.
And the more I read into it, it seems that BB&T sought the funding.
Posted by: Jason | October 27, 2008 07:40 PM
You better believe they wanted the money. The banks are not going to pass this one up. An old friend of mine told me one time to follow the money. And that is exactly what these big financial institutions are doing.
Artie
Posted by: Artie Gray | October 28, 2008 12:13 AM
Credit union, Jason. All the way.
Posted by: Brett @ ReclaimYourRepublic | October 28, 2008 10:42 AM
I'm sorry... did you not do your homework before writing this post? Allison wrote to congress urging them NOT to pass the bailout ... Once it WAS passed and all of his competition was getting free money... what could he do but accept?
A copy of the letter:
http://media.gatewaync.com/wsj/pdfs/2008/09/allison.pdf
Posted by: Raquel | February 22, 2009 02:38 PM
The principled stand, the capitalist stand and the stand other banks have taken, would be not to pursue the money.
Take your smartassery somewhere else.
Posted by: Jason | February 22, 2009 02:48 PM
What makes you think the funds were pursued? Have you read some of current CEO Kelly King's comments on the TARP funds?
Posted by: Raquel | April 20, 2009 04:10 PM