Friday, October 24, 2008
Giant companies are using YOUR money to buy their competitors.
For example, Bloomberg writes today:
PNC Financial Services Group Inc., Pennsylvania's biggest bank, plans to buy National City Corp. for about $5.2 billion in stock after receiving U.S. Treasury funds.
The $7.7 billion of Treasury funding, part of the government's $250 billion plan to recapitalize banks, "put this transaction on a very solid footing,'' PNC said.
Remember that the $250 billion is part of the $700 bailout which taxpayers are paying for.
This confirms CNBC's report that the feds were using the bailout to push bank mergers.
Update: Bloomberg posted a second article entitled "PNC's $5.2 Billion National City Purchase Is Takeover Template for Paulson" after I wrote this essay, which says:
PNC Financial Services Group Inc.'s taxpayer-backed $5.2 billion purchase of National City Corp. is a blueprint for regional bank takeovers pressed for by U.S. Treasury Secretary Henry Paulson, investors said.
Update 2: See also this New York Times article.