I was very clear in warning about the "everyman for himself" phenomenon back when the first US bailout package was announced in the US. All of the money given banks are going straight to the bank's coffers and nowhere else. It is a farce  to believe that banks will act against their own self interest when given money. PNC took the money and bought a bank with a risky loan portfolio to boost deposits, AIG is paying margin calls with its taxpayer money, JP Morgan and Merrill chiefs flat out said, "No, I will not lend the new money out", and the Euro banks are also designing special textual diagrams to display their views on handling the new low interest rates they are benifititing from by way of the UK government. See what I just pulled off of the memorandum of understanding between HSBC and the government:

…………………../´¯/)
………………..,/¯../
………………./…./
…………./´¯/’…’/´¯¯`·¸
………./’/…/…./……./¨¯\
……..(’(…´…´…. ¯~~/’…’)
………\……………..’…../
……….”…\………. _.·´
…………\…………..(
…………..\………….\

  HSBC Defies Brown, Signals It Won't Pass On All of Rate Cuts to Customers

From Bloomberg:

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"The Company also announced that it has recently come to the attention of the Board that an affiliate of a Bucksbaum family trust advanced unsecured loans to Mr. Michaels and Bernard Freibaum, the company’s former director and CFO, for the purpose of repaying personal margin debt relating to company stock. The loan to Mr. Michaels, which totaled $10 million, has been repaid in full. The loan to Mr. Freibaum, whose employment was terminated prior to the Board’s knowledge of these loans, totaled $90 million and has $80 million presently outstanding.
A review by the Company’s independent directors concluded that, while the failure to disclose the loans to the Company’s Board of Directors did not follow internal company policy, no company assets or resources were involved in the loans and that no laws or Securities and Exchange Commission rules were violated as a result of the loans."

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The Guys From ‘Government Sachs’

A most interesting article in the NY Times . Here's an excerpt...

Treasury faces, from left: Steve Shafran (formerly of Goldman), Kendrick Wilson III (ditto), Henry Paulson Jr. (you guessed it), Edward Forst (yep) and Neel Kashkari (see a trend?).

THIS summer, when the Treasury secretary, Henry M. Paulson Jr., sought help navigating the Wall Street meltdown, he turned to his old firm, Goldman Sachs, snagging a handful of former bankers and other experts in corporate restructurings.

In September, after the government bailed out the American International Group, the faltering insurance giant, for $85 billion, Mr. Paulson helped select a director from Goldman’s own board to lead A.I.G.

And earlier this month, when Mr. Paulson needed someone to oversee the government’s proposed $700 billion bailout fund, he again recruited someone with a Goldman pedigree, giving the post to a 35-year-old former investment banker who, before coming to the Treasury Department, had little background in housing finance.

 

I recommend reading the whole thing.