Tags: trump | banks | laughing

Trump: Banks Laughing at Us Borrowers

By    |   Thursday, 16 Apr 2009 08:34 AM

Billionaire real-estate investor Donald Trump says that banks are "laughing" at loan applicants who come in for a mortgage — no matter how good their credit rating is — even though the federal government has completely recapitalized the financial industry.

Banks and Wall Street received "billions and billions" of dollars and this made them solvent once again, yet some now scurry to pay back the funds right away, said Trump. These financial institutions instead should lend to boost the economy, said Trump.

"The banks are not lending money. There's no money out there, no matter how strong you are, no matter how good your deal is, if you go to a bank today they virtually laugh at you if you're asking for money. They don't have money or they're hoarding money," Trump told CNBC.

"The policymakers have to make the banks loan the money that they're giving to the banks. I don't know what they do with the money, but they don't have any money to lend."

Financial industry observers have said that banks may be using the cash they get to cover holes in their balance sheets caused by the so-called toxic assets, largely backed by declining home mortgages.

"It's going to be very interesting what the toxic assets will sell for... if they sell," Trump said.

Trump also said he was buying commercial real estate, but admitted that there were clouds of uncertainty hanging above the sector.

There are risks in commercial real estate as, "unless you signed leases 2 years ago you're going to have trouble renting space or you'll rent it very low," he said.

"I'm a buyer of commercial real estate," Trump said. "The only problem with buying is you just don't know how low is low. The only positive I see frankly is that the stock market is going up, but I just don't know why the stock market is going up."

Professional economists agree with Trump’s off-the-cuff assessment, and, apparently the protestors at the tea party tax protests across the U.S. on Wednesday did as well.

"Increased government spending does not increase economic growth in the near term because Congress cannot create purchasing power out of thin air," writes economist Curtis Dubay of the Heritage Foundation.

"Before it can spend, it must first take money out of the economy through taxes or borrowing. No new spending power is created; it is merely redistributed from one group of people to another."

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Billionaire real-estate investor Donald Trump says that banks are "laughing" at loan applicants who come in for a mortgage — no matter how good their credit rating is — even though the federal government has completely recapitalized the financial industry. Banks and Wall...
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Thursday, 16 Apr 2009 08:34 AM
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