John
Verum Serum
5/18/2010
A couple days ago I wrote a summary of the strange history of ShoreBank, a small but politically connected bank in Chicago. At the time, the President of Goldman Sachs had suddenly decided to make calls to insure it survived. Well, today GE announced a $20 billion commitment to ShoreBank which puts them over the threshold and makes the bank eligible for a further $75 billion in government bailout money:
Discussions that went into the wee hours last night finally produced an agreement among a who’s who of Wall Street banks and a group of local lenders that will provide about $140 million of private capital to rescue ShoreBank, a person familiar with the matter said.
Question: Why is GE, one of the Fortune 10, concerned about the failure of a community bank in Chicago?
Answer: GE’s Jeffrey Immelt sits on the President’s Economic Recovery Advisory Board and is a member of former President Clinton’s Global Initiative, a distinction he shares with Lloyd Blankfein, CEO of Goldman Sachs. Both Clinton and Obama have expressed concern about Shorebank’s future. QED.
I wonder if GE’s shareholders agree with using their company as a $20 billion backstop for a failing bank in Chicago?
Also at Verum Serum, Congressional Republicans Demand Probe of Shorebank Rescue.
From Conservative Blog Watch, Sachs + Schakowsky + Shorebank = Shakedown and ShoreBank: Too Green to Fail?
