Posted on 02/05/2009 10:17:26 AM PST by yoe
he U.S. Treasury may have significantly overpaid for its investments in financial institutions, a government watchdog said Thursday, as criticism of the $700 billion financial rescue continues to build.
"Treasury paid substantially more for the assets it purchased under the [ Troubled Asset Relief Program] than their then-current market value," Harvard Law School professor Elizabeth Warren told the U.S. Senate Banking Committee.
Warren, who chairs a five-person congressional oversight panel overseeing the Wall Street rescue plan, said a report being released Friday by the group includes an analysis of 10 TARP transactions. Extrapolating that analysis for all of the purchases made by the Treasury in 2008 suggests Treasury paid $254 billion for assets worth approximately $176 billion, a shortfall of $78 billion.
"They did not price for risk, that's what markets do," Warren said, suggesting the Treasury's lack of consistency had made the government funds a better deal for some institutions.
More broadly, both lawmakers and other government watchdogs were sharply critical about the way the program has been implemented, the ad hoc nature of the Treasury's efforts to stabilize individual financial firms, and the lack of transparency surrounding the program.
"For the sake of our economy and the public's confidence ... we must see a sharp change in the direction of the program," Senate Banking Chairman Christopher Dodd, D-Conn., said at the hearing.
The criticisms come as the Obama administration and new Treasury Secretary Timothy Geithner are drafting their plan for how to comprehensively address the credit crisis and restore confidence in the TARP program. Geithner is expected to announce the administration's plan next week, and various iterations of a " bad bank" to purchase toxic assets from bad banks and asset guarantees are widely reported to be in consideration.
(Excerpt) Read more at money.cnn.com ...
Elizabeth Warren for Sec. of the Treasury!!!!
As it is the nation is going down the tubes with this Pelosi Congress.
Now, now. These people are just pointing out how inept the Bush administration was in handling the TARP money.
Everything will be fine from now on.
“For the sake of our economy and the public’s confidence ... we must see a sharp change in the direction of the program”
Too late, Dodd. I’ve NO confidence in our government any longer.
Geithner’s baby.......and we just HAD to have THIS Tax Cheat to lead us.......
Our Founding Fathers wouldn’t be marching on Washington....they would be deport us all to France....
TARP = Taxpayer Ass-Rape Program.
“TARP = Taxpayer Ass-Rape Program”
ROTFL! You owe me a keyboard.
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