The End Is Nigh For TARP


Well, maybe not all that nigh. But when Lil' Tim climbs high atop the Treasury Dept. building and stands on his tippy-toes, he can almost see something that somewhat resembles the end of the $700 billion government bailout program.
"We are close to the point where we can wind down this program and stop making new commitments," Geithner told a skeptical Senate panel today.
How close? "We're not quite there yet." And certainly not in the next couple of weeks, when TARP is set to expire.

Still, just the thought of TARP's demise has visions of sugar-plum fairies in the mind of the ever-imaginative, if diminutive, TreaSec. He told Sen. Grinch (R-S.D.) that all he wants for Christmas is for TARP to go away forever.
"Nothing would make me happier," he said. Not even the appearance of Jamie Dimon's goons, with a message from the president and a loaded Beretta.
Geithner Says TARP Is Winding Down, but Date Not Set [WSJ]


Bill Gross: The End Is Nigh

Bill Gross wrote about death in his latest Investment Outlook; hopefully next month he'll return to his regularly scheduled programming of sartorial advice and vivid accounts of the first time he played 7 Minutes in Heaven.

TARP Charts!

The Federal Reserve has this new paper out about TARP that does a bit of highly suggestive eyebrow raising about some banks that shall remain nameless. They start from the awkward fact that TARP wanted everything in one bag but didn't want the bag to be heavy, or as they put it: The conflicted nature of the TARP objectives reflects the tension between different approaches to the financial crisis. While recapitalization was directed at returning banks to a position of financial stability, these banks were also expected to provide macro-stabilization by converting their new cash into risky loans. TARP was a use of public tax-payer funds and some public opinion argued that the funds should be used to make loans, so that the benefit of the funds would be passed through directly to consumers and businesses. So you might reasonably ask: were TARP funds locked in the vault to return the recipient banks to financial health, or blown on loans to risky ventures, or other? Well, here is Figure 1 (aggregate commercial and industrial loans from commercial banks in the U.S.): So ... not loaned then. But that's not important! The authors are actually looking not primarily at aggregate amounts of loans but at riskiness of loans and here's what they get: