Glad to see we are hearing about fraud in the TARP program. We put a massive amount of money go into many financial institutions and if history proves to repeat itself, fraud always happens in large government programs. The alleged transaction sounds very fishy and should be investigated.
Business Week - Charles Antonucci, the ex-president of the Park Avenue Bank in Manhattan, closed by regulators last week, was arrested and charged with lying in an application for federal bailout funds and scheming to gain control of the bank.
Well its a race to from under the “Pay Czar” and now Citibank is running as well so they can pay bonuses as well. I guess the bonus race is on these days. My question is if the government will be removing its $300 billion in guarantees for Citigroup loans and securities? If that is not withdrawn then is it clear that they are not from under the TARP program and they should still be under those pay constraints.
It is already bad enough that the U.S. taxpayers has bailed out and provided a backstop for our banking institution but now we are not seeing any real “thanks” for that gesture and more focus on getting clear of the rules that were setup so they can get paid before Christmas. Don’t be too dis-trot, this is greed working its magic, we setup the rules and they are following them so next time if we are satisfied with them, then we need to write better rules and that starts with people intelligently engaging their representatives so your voice and opinion is heard and taken seriously.
Education is the key in complex matters like finance and economics and that means you need to take some of your leisure time and dedicate it to learning about these matters if you want a different outcome than what we have gotten this far. That is a main reason I write this blog is to educate and force myself to be current by reading news on these subjects everyday.
This is good news as long as we see the programs fade. It is very hard for investors to gauge the real health of the economy with all of the intervention on the behalf of the government. It is smart that they are retracting the program but keeping it in place just in cause we do see another decline in economic health. If it does go well and we don’t need the assistance, we should use it to pay down the deficit being that we are generating debt at record levels.
Treasury Secretary Tim Geithner notified Congress Wednesday that he is extending the Troubled Asset Relief Program through Oct. 3, 2010.
“This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats,” Geithner wrote in a letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.
The Treasury Department will continue to use TARP funds to mitigate home foreclosures, provide capital to community banks and take additional steps to boost lending to small businesses, Geithner wrote. The department also may increase its commitment to efforts to improve the secondary markets for consumer loans, small business loans and commercial mortgages.
Beyond these programs, the department will not use any remaining TARP funds “unless necessary to respond to an immediate and substantial threat to the economy stemming from financial instability,” Geithner wrote. “As a nation we must maintain capacity to respond to such a threat. Banks are still experiencing significant new credit losses, and the pace of bank failures, which tend to lag economic cycles, remains elevated.”
Source: Ohio Business Journal
This is a good sign, I am glad to see these fund get repaid back. This is going to create pressure on the banks that do not have the ability to repay these government loans. In a sense, this has now separated the banks into two categories (TARPed and Non-TARPed) and one categoery is clearly stronger than the other. This should let the market now reward or punish the good and bad banks we have.
If you can not repay these loans then clearly you are currently in a weaker position than your rivals. In the business of banking, 95% of the business is based on “trust” and “confidence” and when you are in short supply of both, then you usually go out of business. I want too see only strong and prudent banks surviving. I love good banks and despise bad ones. In all my history on banking I have read, this is the way of the world and it should not change now.
JPMorgan Chase & Co. and four of the nation’s largest banks repaid $54.7 billion to the U.S. Treasury’s bailout fund in a step toward ridding themselves of government restrictions on lending and pay.
Not much longer that I published that last article then did I see this Reuters story come over the wire about a trucking company needing a bailout for its retirement pension because of bad investments in either CMBS (Real Estate) or CDS (Debt Insurance) type financial instruments.
The more these reports keep coming out, the more I can feel the coming bout of inflation coming because of the massive money printing that is taking place which will push our trading partners to increase their prices on wholesale goods to compensate for our reckless social policy of bailing out no matter if they were doing the right or wrong choices at the time. It is pretty sad the precedence this country has set for itself. I can just see the next crisis coming up once the dust settles and greed kicks in to find another way to exploit the system.
Struggling No. 1 U.S. trucking company YRC Worldwide Inc. plans to seek $1 billion in bailout money from the Troubled Asset Relief Program to help it cover pension obligations, a move analysts say is unlikely to succeed as the company has no financial charter.