The whole bailout issue has been considered in terms of dollars and cents (mostly dollars), and has also been considered in terms of politics.
But the bailout issue could also be considered in marketing terms, independent of the dollars and cents (mostly dollars) generated by bailout funds themselves, or the political ramifications.
Local Inland Empire, California real estate blog Housing Kaboom has understandably taken a negative view toward the Inland Empire real estate market. But it recently expanded its negative view by taking a look at other parts of the economy.
In the process, it printed a telling quote from this Los Angeles Times article:
"It was supposed to be a badge of honor if you were able to get this money, but now it's a badge of honor if you didn't take it, with all the bad publicity it has attracted," said Alan Rothenberg, chairman of 1st Century Bank in Century City.
Rothenberg's bank took a look at the Treasury program and decided to avoid it.
Another bank official was quoted:
"The TARP money is tainted and we don't want it," said Jason Korstange, a spokesman for Minnesota-based TCF Financial Corp., which received $361 million and announced this month that it wanted to pay it back. "The perception is that any bank that took this money is weak. Well, that isn't our case. We were asked to take this money."
The bank issued a toughly worded statement earlier this year, saying that the money had put the financially strong banking chain at a "competitive disadvantage" and that the bank now believed it was "in the best interest of shareholders" to return it.
Now I'll grant that there are additional factors at work, such as the increased public scrutiny of firms that accept the bailout money and then perform actions that anger taxpayers. But in some cases, the mere perception of taking bailout money has become more toxic than the "toxic" loans that the banks themselves may be holding.
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