Friday, January 27, 2012

Special Inspector General: "TARP's Not Over"

As part of our 2012 mission to show CI readers some of the 1300 feeds we read, here's another one of the good ones.
From Securities Law Prof blog:
The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) released its most recent Quarterly Report to Congress on Jan. 26, 2012 (Download SIGTARP.January_26_2012_Report_to_Congress[1]), and it makes for interesting reading.  From the executive summary:
TARP will continue to exist for years. TARP programs that support the housing market and certain securities markets are scheduled to last until as late as 2017, and Treasury can spend an additional $51 billion on these programs during those years. Taxpayers are still owed $132.9 billion in TARP funds, and taxpayers will never get back some of these funds. Some programs were designed as a Government subsidy with no return to taxpayers. Treasury has already written off or realized losses of $12 billion and Treasury predicts losses on other TARP investments. The Congressional Budget Office recently increased its estimated cost of TARP to $34 billion. One fallout of slow economic recovery is that it slows Treasury’s progress in recouping outstanding TARP funds. Unwinding Treasury investments in 458 institutions, including American International Group, Inc. (“AIG”), General Motors Corp. (“GM”), Ally Financial Inc. (“Ally Financial”), and community banks, in the near term could prove challenging as markets remain volatile and banks struggle to stay on their feet. Financial stress continues to pose obstacles to economic recovery, in part due to an 8.5% unemployment rate, decreased consumer confidence, nonperforming mortgages, and job cuts and asset sales by some of the nation’s largest institutions.
The U.S. Government continues to own 77% of AIG, 32% of GM and 74% of Ally.  Unwinding these investments is "likely to take several years."...MORE
Also at SLPB:
SEC Charges Latvian Trader with Hacking into Customers' Accounts