The Man Who Knew Too Much

Michael Collins

Neil M. Barofsky wrote a devastating column for the New York Times on March 29, his last day as Special Inspector General for the Troubled Asset Relief Program (SIGTARP). The roles for his position were:

"to conduct, supervise, and coordinate audits and investigations of the purchase, management, and sale of assets under the Troubled Asset Relief Program ("TARP"). SIGTARP is required to report quarterly to Congress describing SIGTARP’s activities and providing certain information about TARP over that preceding quarter." April 21, 2009 (Image SIGTARP)

98 TARP Bank Recipients May Still Fail

The headlines are all a buzz over this Wall Street Journal article, declaring bailed out banks may fail. These 98 banks have received $4.2 billion in TARP funds, a token amount in comparison to the Banksters.

In Q2 2010, the number of TARP recipient banks who would fail anyway was 86. That said, every Friday at business close we get more bank failures. The tally for 2010 alone being 157.

Calculated Risk runs the unofficial problem bank list, currently outlining 919 problem banks. Most of these of the list did not get TARP funds.

There are also reports of the FDIC selling failed banks assets to TARP recipient banks, for pennies on the dollar and holds large amounts of seized failed bank assets.

The FDIC closed on the sale of $279 million of assets from nine failed bank receiverships. The winning bidder of the asset pool was Cache Valley Bank, Logan, Utah, with a purchase price of 22.2% of the unpaid principal balance of $279 million. The failed bank assets will be placed into a newly formed limited liability company (LLC) with the FDIC retaining a 60% stake and the balance owned by Cache Valley Bank.

SIGTARP Barofsky - Investigating New York Fed for Criminal & Civil Charges

Wow. Bloomberg has interviewed SIGTARP inspector General Neil Barofsky. Buried at the bottom of the story is this:

Barofsky says the question of whether the New York Fed engaged in a coverup will result in some sort of action.

“We’re either going to have criminal or civil charges against individuals or we’re going to have a report,” Barofsky says. “This is too important for us not to share our findings.”

He won’t say whether the investigation is targeting Geithner personally.

(h/t ZeroHedge)

That would be amazing is any of the architects of this disaster, including now Treasury Secretary Tim Geithner, would be held publicly accountable.

TARP costs revised to $89 billion

The Treasury revised the losses on TARP to $89 billion.

The March budget deficit was $65.4 billion.

The Wall Street Journal claims the TARP costs include Fannie Mae and Freddie Mac. That's simply not true, Fannie and Freddie received a separate, unlimited bail out. The last loss projection was $400 billion dollars. If one notices, Freddie Mac and Fannie Mae are woefully absent in any financial reform legislation as well.

In terms of the budget deficit, Mark Zandi of Moody's:

Elizabeth Warren video interview - 50% of CRE underwater by end of the year

Elizabeth Warren did an interview on CNBC. Of the tidbits we have: get rid of Fannie Mae and Freddie Mac, why is Citigroup growing when it should be shrinking and 50% of all Commercial Real Estate will have loans greater than the properties are worth by the end of 2010 and it's such a problem it's gonna hurt the overall economy. Watch to see if I summed that up correctly:


Is This Change We Can Believe In?

President Obama announced a new 'fee' or tax on possibly 50 of the largest financial conglomerates. Are they finally getting it? We will see. I admit I was very skeptical of this notion when the White House first floated this idea a few days ago. After all they have a good track record with protecting the financial oligarchy. Was this more of the same? Possible not. The administration is calling this tax a fee: “financial crisis responsibility fee”. Boy, that name is dripping with spin. Name aside, on paper this tax may actually work. Here are some of the details from Treasury Department Fact Sheet:

Bank Bail Outs Proved to be "inside job"

What a surprise, it's not what you know, but who you know especially if you want billions in free money to cover your screw up.

A new study from University of Michigan Professors Ran Duchin and Denis Sosyura found that the financial institutions who has the strongest political "ties" received the largest bail outs.

Duchin and Sosyura focused on the Capital Purchase Program, the largest TARP initiative in terms of the number of participants and the amount of expended capital. As of late September, nearly 700 financial institutions had received about $205 billion under the program.

TARP to be extended until 2010

The Obama administration is extending TARP to 2010.

Treasury Secretary Timothy Geithner plans to tell Congress that the Obama administration will extend the $700 billion financial-rescue program until next October, according to people familiar with the matter.

While the Troubled Asset Relief Program expires on Dec. 31, Geithner can extend it by notifying Congress. A letter notifying Congress of the extension could come as soon as today, said the people, who declined to be identified. Andrew Williams, a Treasury Department spokesman, declined to comment.