Not quite.
I have spoken before that TARP was a joke. We all know this. But whats a bigger gag on the tax payer is the TLGP - Treasury Loan Guarantee Program.
http://tradersutra.blogspot.com/2009/06/real-tarp-story.html
http://tradersutra.blogspot.com/2009/04/benedict-geithner-speaks.html
Even though big banks and non bank financial have paid back TARP, they still over $300 Billion in TLGP debt backed by the FDIC outstanding. When will this be paid back? Why are these outfits allowed to pay out bonus money when these huge obligation is weighing in on the FDIC?
What is surprising to me is that General Electric has some $88B in TLGP debt outstanding. This is just simply unacceptable coming from the light bulb. You telling me that the bluest of the bluest chips can only raise debt when its backed by the FDIC? Not only that these companies all raised money through this window because it was cheaper for them to do so. They gain the interest rate spread while they are able to refinance their trading books. All at the expense of Joe Tax Payer.
I cannot agree more...
ReplyDeleteHere's more bad news:
Some banks were not going through with loan modification because the FDIC essentially PAID them to kick people out of their homes with these loss-sharing agreements:
"So, OneWest puts $101,760 in their pocket, thanks to the FDIC. Folks, that is over $100k of our hard-earned tax dollars... The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc.
This entire agreement between the FDIC and OneWest can be found here, on the FDIC website. It's all there, for the world to see! They have it all layed out. All of the formulas, worksheets, etc."
http://activerain.com/blogsview/1243528/is-the-fdic-killing-short-sales
And no, the FDIC was not funded only by bank premiums because what insurance corporation could guarantee trillions of deposits with a few billions without implicit tax dollar guarantee?
If the head of the FDIC really wanted to keep people in their homes, why sign loss-sharing agreements that encouraged foreclosure? This was very similar to her outcries against Wall Street bonus but then deciding to back over $300 billion of bonds, with no restriction on executive compensation or how the money raised must be used for lending, as we watched GS, JPM, etc hand out billions in bonuses when the FDIC didn't even have enough money to back our deposits.
*imho*