The Spectacle Blog

ShoreBank Bailout in Doubt

Despite $140 million in commitments from deep-pocketed monsters of the TARP (Goldman Sachs, Citigroup, JP Morgan, GE Capital) that would have helped it access its own asset-relief funds, the Federal Reserve says Obama-connected Chicago lender ShoreBank still falls far short of the funding it needs to avoid a FDIC slicing-and-dicing.

By on 6.23.10 | 5:00PM

Despite $140 million in commitments from deep-pocketed monsters of the TARP (Goldman Sachs, Citigroup, JP Morgan, GE Capital) that would have helped it access its own asset-relief funds, the Federal Reserve says Obama-connected Chicago lender ShoreBank still falls far short of the cash it needs to avoid a FDIC slicing-and-dicing. Charlie Gasparino of Fox Business reports:

People with knowledge of the analysis say the Fed believes in order to remain solvent, ShoreBank would need much more money — at least $300 million and probably more because of the toxic nature of ShoreBank’s balance sheet.

Gee, what could be so toxic?

The banks had trouble cobbling together the $140 million to make the initial plan work because of doubts that ShoreBank’s business model of funding “green” businesses and making subprime loans could be sustained.

What could all these carbon-trading pushers (the big financial institutions noted above) possibly find wrong with a "green" business funding model? And the government has only guaranteed continued backing of loans for people who can't repay them. Is there something they aren't telling us?

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