Posts Tagged: Troubled Asset Relief Program

Our own private TARP

TARP is on its last legs, but 37 Chicago-area banks have more in problem loans and foreclosed property than they do capital. This means that more successful Chicago banks could start to make Treasury Dept.-like deals and provide equity to struggling banks. Steve Daniels of Crain’s Chicago Business profiles Ed Wehmer, CEO of Lake Forest-based Wintrust Financial Corp., which has weathered the financial meltdown fairly well. Wehmer saw the success the Treasury Dept. had in buying common stock from large financial outfits like Bank of America. (more…)

Congress kills TARP…long live TARP

In order to pay for financial regulatory reform, Congress transferred what funds remain from the Troubled Asset Relief Program a/k/a TARP (a/k/a the $700 billion bailout of Wall Street marked by its unpopularity — and success in stabilizing the financial market). Paul Merrion of Crain’s Chicago Business reports that this is unlikely to affect banks that have applied for TARP money, such as Chicago’s ShoreBank. (more…)

Even GM Recovering Faster Than the Labor Market

There’s been a lot of coverage the past day of formerly bailed out banks posting huge first-quarter profits — Citigroup made $4.4 billion, Goldman Sachs got $3.5 billion. On the auto bailout front, General Motors isn’t doing quite that well — but its fortunes are also changing for the better. (more…)

Time For Another Foreclosure Moratorium?

Building off Ned’s post this morning on increased national home foreclosures . . . the Washington Post’s Renae DeMarle reports that the increase is specifically due to the winding down of direct government interventions in the mortgage market: (more…)

Fixing The Foreclosure Prevention Program

TARP’s main mortgage-modification program has not helped enough homeowners avoid foreclosure. Moreover, the homeowners who have been helped are disproportionately white. (more…)

More News On The Pay Czar Beat

Kenneth Feinberg, Barack Obama’s pay czar, took a big step today to getting the federal government more involved in executive pay. (more…)

TARP Not Working For The Little Guys

The Washington Post’s Binyamin Appelbaum and David Cho report that while the nine huge banks that took part in the Treasury Department’s Troubled Asset Relief Program have repaid their loans, “hundreds of community banks” have not returned their TARP money. Some of these community banks are “struggling with losses on real estate development loans,” while others were dubiously selected as bailout recipients.

This news about community banks is a disquieting plot twist in the narrative that TARP is a surprise success. The quick return to profits by the biggest banks (Goldman Sachs, J.P. Morgan, etc.) coupled with the failure of community banks could lead to greater consolidation in the banking industry. If dozens of community banks go under, consumers must go to a big banks, that likely do both commercial and investment banking. So financial firms “too big to fail” will become even bigger. Perhaps the final legislative outcome of Chris Dodd’s financial regulatory reforms will address this problem.

AIG’s Shockingly Responsible Stewardship of Taxpayer Money

Slate’s Daniel Gross points out that the Troubled Asset Relief Program has been so successful in getting bailed out companies to pay back their loans that even AIG is returning their money:

When you look at the financial markets as a whole, the post-crisis bailout efforts have worked out better than expected. Many of the financial market guarantees were lifted without having been used, and the Treasury is turning a profit on the central component of the TARP. But AIG has so far loomed as a gigantic rebuttal to the optimists, a symbol of everything that went wrong.

But it turns out that the efforts to prop up AIG are also working out much better than expected. AIG still owes the Fed and the Treasury a combined $127 billion. But—surprise!—AIG is paying a lot of its debts back. And there’s a not too far-fetched scenario in which we come close to breaking even on our reluctant investment in the company. (more…)

What Now For Tim Geithner

John Cassidy’s New Yorker profile of Tim Geithner mostly makes a single argument, with that argument contained in the  sub-head: “Timothy Geithner’s financial plan is working — and making him very unpopular.” This has become the prevailing wisdom on the Geithner beat — summarized equally well a few weeks ago by the Wall Street Journal’s Deborah Solomon. This part of Cassidy’s conclusion, though, is fresh and interesting: (more…)