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’Tarp exposes US to $23,700bn risk, watchdog says
Neil Barofsky, special inspector-general for the troubled asset relief programme, said that the various US schemes to shore up banks and restart lending exposed federal agencies to a risk of $23,700bn – a vast estimate that was immediately dismissed by the Treasury,
US Treasury pushes ahead with toxic asset plan
The US Treasury on Wednesday pushed ahead with scaled back plans for public- private partnerships to buy toxic assets, naming nine fund managers and allocating $30bn of public funds, but without securing any further backing from the Federal Reserve,
Ten US banks to repay Tarp funds
Ten financial groups including JPMorgan Chase and Goldman Sachs were on Tuesday allowed to repay a combined $68bn to the US Treasury. The groups, including Morgan Stanley and American Express, can now shed the pay and hiring restrictions that came with last year’s Tarp assistance.
US banks race to repay Tarp cash
US banks are vying to be in the first wave of lenders to repay US bail-out funds after Washington said it would allow five or six big financial groups to repay their Tarp loans before the rest of the industry to avoid a “rush for the exit”,
Goldman “if only we had some Tipp-ex” Sachs
Can we have $25bn, err.. sorry, actually we mean $10bn from the Tarp please? And no we’re not plucking these figures arbitrarily from our heads.
H/T to Clusterstock for pointing out the schoolboy error.
US to impose Tarp payback rules
US regulators plan to impose tough conditions on banks that want to repay bail-out funds, requiring proof that they can issue debt without government insurance. They may also be required to demonstrate ability to raise equity capital from private investors The new requirements could deter some banks from trying to repay funds early.
Cuomo confidential
In testimony leaked to the Wall Street Journal on Thursday, Bank of America chief Ken Lewis suggests that former US Treasury secretary Hank Paulson forced his hand on the Merrill deal.
Lewis had his doubts about the transaction,
Confessions of a Tarp bride
All the perfumes of Arabia will not sweeten this little hand.
Forget the opera. Cancel dinner at Bouley. How life has changed since my CEO husband went on the government dole. I am a Tarp wife.
If you can stomach the whole thing,
The TARP cop report
The acronym SIGTARP has a military air about it. And, to be sure, Neil Barofsky at the Office of the Special Inspector General for the Troubled Asset Relief Program sees serious dangers in the operation of the US Treasury’s umbrella bailout plan.
Fannie Mae chief to head TARP
The Obama administration is expected to name Fannie Mae CEO Herb Allison to head the US government’s $700bn TARP financial rescue program, reports Reuters. The announcement is expected “in coming days,”
Terp-gate, revisited
Remember this – former Treasury secretary Hank Paulson’s dramatic November U-turn on the Tarp?
Paulson abandoned his original Tarp plan to snap up toxic assets in favour of buying (toxic) bank shares.
Breaking Neel down, inter alia
Fox News has heard back from the US Treasury – which has complied with the television network’s freedom of information request and released some 10,000 pages of documents relating to the US government’s bank bailout initiatives.
Citigroup burns hedgies
That’s the recent price action in Citigroup.
Undoubtedly, the Pandit memo, which talked of Citi enjoying a great start to 2009, has played part in that move.
But so has a painfull short squeeze,
What price a warrant? The unaccountable TARP…
On the 20th October 2008, TARP warrant guidelines specified:
In all cases, the Treasury also must obtain warrants for common stock of the applicant. The terms of the warrants are explained in the Treasury agreements available on the Treasury web site.
Why letting Lehman go did crush the financial markets
For some time now, the folks over at Clusterstock – notably John Carney – have led a challenge to a particularly virulent piece of received wisdom: that the failure of Lehman was necessarily an inflection point that took the severity of the financial crisis to a whole new level.
Returned to TARP
From the Reformed Broker:
Iberiabank (IBKC) has become the first financial institution out of over 440 to return TARP funds back to the federal government. Iberiabank basically said, “Look, you told us all to participate and take the money,
TALF goes live
About time. The Treasury has finally set a launch date for its much anticipated Term Asset Backed Securities Loan Facility, or “TALF”.
A reminder: the scheme was originally announced in November with the aim of going live in February.
Application for capital assistance
More detail on the Treasury’s planned stress tests and newest bank capital replenishing programme emerged yesterday.
As a reminder, the stress tests will be applied to roughly 20 US banks (those with assets over $100bn),
Stressing the stress tests
The US banking stress tests are set to begin today. We’re still awaiting details but here’s what we know so far.
The tests are part of US Treasury Sec Tim Geithner’s financial stability program and involve assessing the ability of America’s biggest banks to withstand “stress”
S&P to kill banks?
CNBC is running an interesting piece of analysis by Michelle Caruso-Cabrera, titled “The Unintended Consequences of Gov’t Intervention”
Here’s the basic premise. Included in the recent American Recovery and Reinvestment Act of 2009 was this line,
Off to the deleveraging races
Rolfe Winkler at Option ARMageddon provides us with an update on US bank leverage.
The latest table is at the top, the older one at the bottom. (Go here and here for details of the calculations).
In the banking deleveraging races then,
The Kanjorski meme and the end of the world, redux
It looked on Wednesday last week like Felix Salmon had had the last word on what he earlier dubbed the Kanjorski meme – a little piece of web flotsam alighted upon by a number of blogs, among them FT Alphaville – the gist of which went something like this:
Hire American, or, no foreign bankers for you
Remember the Buy American clause of the proposed economic stimulus?
Meet Hire American.
Apart from the Buy American provisions restricting government spending to US companies, other items in the bill could also give cause for alarm.
Wall Street: not impressed
A financial stability plan – $2 trillion
An economic stimulus – $838bn
Watching Wall Street’s reaction – priceless
Geithner’s plan has not impressed. Light on detail and loaded with caveats, it’s also managed to circumvent the thorny issue of pricing toxic assets.
‘Financial stability’ unveiled
The factsheet, selected highlights in bold.
The Financial Stability Plan: Deploying our Full Arsenal to Attack the Credit Crisis on All Fronts. Today, our nation faces the most severe financial crisis since the Great Depression.
“Within 24 hours the world economy would have collapsed”
Michael Panzner’s choice of name for his blog, it turns out, could not be more apt.
Panzner points us in the direction of this post from Zero Hedge, which in turn links to an overlooked C span video of Democratic Representative Paul Kanjorski.
Rescuing banks, then Treasuries
Yields on US Treasuries are continuing to rise — despite the best efforts of the US to keep them down.
Monument Securities’ Stephen Lewis has this to say about it today:
US policymakers need to take the Treasuries market’s behaviour seriously.
Super Treasuries!
Spotted by Alea, the below is from the minutes of the latest released report of the (US) Treasury Borrowing Advisory Committee:
…members discussed the potential to issue other securities if needed including a reintroduction of a 4-year note,
How to solve a ‘balance sheet recession’
Solving a “balance sheet recession” (eg. one started by deteriorating assets sitting on IB balance sheets), is all about slowing the deleveraging process. That at least is the view of Morgan Stanley’s interest rate strategy team.