Criticism that “moral hazard” is the main legacy of U.S. taxpayer-funded bailouts is unfair, a Treasury Department official said. “We recognize that moral hazard is a real and significant concern” in the Troubled Asset Relief Program, Timothy Massad, acting assistant secretary for financial stability, said in a hearing before a House Oversight Committee panel today. “But to suggest that it is TARP’s main legacy is to ignore the facts, and to confuse the response to a crisis with the need to address the causes of the crisis.” Massad was responding to criticism from Neil Barofsky, special inspector general for TARP. Barofsky told the House panel’s TARP subcommittee today that the program’s “most significant legacy may be the exacerbation of the problems posed by ‘too big to fail,’ particularly given the manner in which Treasury executed the bailout.” [Bloomberg]
TARP
We are getting a bargain on this TARP business. Continue reading »
2 thumbs way up. Continue reading »
The Treasury Department said today it has lowered the projected cost of the Troubled Asset Relief Program by $11.4 billion to $105.4 billion. We’re still in the hole on the auto companies and AIG – and there’s that bailout of Fannie and Freddie – but we’ll take what we can get. Continue reading »
Remember, back in the day, when Kenneth Feinberg was named Comp Cop and everyone working at a bailed out company, who were told their asses were about to be capped, threatened to leave if he so much as dared to take a penny of their hard-earned money away? Sure you did, they wouldn’t shut up about it, or the fact that this–this!– was going to be the death of their otherwise phenomenally profitable firms? Anyway, apparently most people were just messing.
Of the 104 senior executives whose pay was set by the federal pay regulator in the last two years, 88 executives, or nearly 85 percent, are still with the companies even though their pay was drastically cut back, according to people briefed on the government data. The relative stability, at least within the executive suite, suggests that a soft job market, corporate loyalty and personal pride helped deter the feared management exodus at the companies hardest hit by the pay rules.
Sure, or maybe it was this. Continue reading »
Vikram Pandit: We Won’t Need Any More TARP, We’re Slimming Down And Moving On Up In The World
By Bess LevinYou can all stuff it! He’s not taking shit from any of you. Next question!
Elitzabeth Warren, the chair of the Congressional Oversight Panel for TARP, believes that the problems couldn’t be more obvious and solutions for financial regulation are as obvious but for some reason, “we can’t seem to put the two together.”
“Six months ago, I thought we were on brink of financial reform, I really did,” Liz told Bill Maher. “The reason we’re not changing things right now is that banks have lobbies in Washington in numbers I’ve never seen. They’re coming not just once a month, once a week or even once a day. These guys are coming two, three times a day. And they just keep slamming in the same direction over and over and over. It’s a David and Goliath story.”
SIGTARP’s Neil Barofsky released the agency’s quarterly report today and $700 billion later, this is where we stand: the program not only didn’t help anything but had an opposite effect; TARP money is being used to investigate banks’ TARP-related insider trading and Geithner is full of crap.
“Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car.”
Happy Monday.
Abu Dhabi’s isn’t the only government that doesn’t want to take a huge bath on its Citigroup investment. But fortunately for Little Tim Geithner and the Treasury Boys, they don’t have to go to court to keep that from happening. They just have to hold their breath (and their 34% stake in Citi).
Seems the Treasury forgot that when a company has to flood the market with more shares in order to repay its gigantic TARP loan, the value of everyone’s shares goes down. A lot. Including those of the people who made the gigantic TARP loan.
It’s been a profitable week for Little Tim Geithner and the Treasury boys. Hot on the heels of the news that it’s getting its money back from those deadbeats at Citigroup and Wells Fargo comes its successful sale of those zero-cost warrants it got from TCF Financial Corp., a Minnesota bank.
The Treasury turned a tidy $9.45 million profit on the TCF warrants, getting twice the minimum bid price of $1.50 apiece in a Dutch auction. The warrants don’t expire for another nine years, during which time TCF’s share price only has to rise $3.50 to make them worth exercising.
Yea, it’s a drop in the bucket. Yea, there’s still $60 billion in TARP money outstanding. But let’s give this one to the little guy. He’s already been overshadowed–not difficult, we understand–by Big Ben’s big win and fancy Time magazine cover. But for the first time in a long time, it hasn’t been a terrible, horrible, no good, very bad week for the Treasury Secretary. As of Wednesday morning, anyway.
