Thursday, November 12, 2009

TARP Inspector General: Taxpayers to suffer Losses

by Bill McBride on 11/12/2009 08:17:00 PM

From Bloomberg: Barofsky Says TARP ‘Almost Certainly’ Will Bring Loss (ht jb)

Neil Barofsky ... said the [TARP] will “almost certainly” result in a loss to U.S. taxpayers.
...
“Tens of billions of dollars are likely to be lost on the automotive bailout,” Barofsky said. In addition, some banks that received TARP money are failing, so the aid they received will be wiped out.
The TARP lost $2.33 billion on CIT and another $299 b million on the failure of UCBH Holdings (United Commercial Bank) last week.

And there are a growing number of banks not paying their TARP dividends (33 banks as of August - not all will fail, but that is a bad sign).

And this is the quote of the day:
“When I first took office, I can’t tell you how many times I’d be having a sit-down and warning about potential fraud in the program and I would hear a response basically saying, ‘Oh, they’re bankers, and they wouldn’t put their reputations at risk by committing fraud,’” he said.

“I think we’ve done a good job of instilling a greater degree of skepticism that what comes from Wall Street isn’t necessarily the Holy Grail,” he said.

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