Posts Tagged
‘Neil Barofsky’
by ilene - October 26th, 2010 1:53 am
Courtesy of Tyler Durden
SigTarp Neil Barofsky has just released the most scathing critique of all the idiots in the administration, with a particular soft spot for Tim Geithner.
On the failure of TARP to increase lending:
As these quarterly reports to congress have well chronicled and as Treasury itself recently conceded in its acknowledgement that "banks continue to report falling loan balances," TARP has failed to "increase lending" with small businesses in particular unable to secured badly needed credit. Indeed, even now, overall lending continues to contract, despite the hundreds of billions of TARP dollars provided to banks with the express purpose to increase lending.
On TARP’s sole success of boosting Wall Street bonuses:
While large bonuses are returning to Wall Street, the nation’s poverty rate increased from 13.2% in 2008 to 14.3% in 2009, and for far too many, the recession has ended in name only.
On TARP’s failure in general:
Finally, the most specific of TARP’s Main Street goals, "preserving homeownership" has so far fallen woefully short, with TARP’s portion of the Administration’s mortgage modification program yielding only approximately 207,000 ongoing permanent modifications since TARP’s inception, a number that stands in stark contrast to the 5.5 million homes receiving foreclosure filings and more than 1.7 million homes that have been lost to foreclosure since January 2009.
On the Treasury’s scam in minimizing publicized AIG losses, and on Geithner as a Wall Street puppet whose actions are increasingly destroying public faith in the government:
While SIGTARP offers no opinion on the appropriateness or accuracy of the valuation contained in the Retrospective, we believe that the Retrospective fails to meet basic transparency standards by failing to disclose: (1) that the new lower estimate followed a change in the methodology that Treasury previously used to calculate expected losses on its AIG investment; and (2) that Treasury would be required by its auditors to use the older, and presumably less favorable, methodology in the official audited financials statements. To avoid potential confusion, Treasury should have disclosed that it had changed its valuation methodology and should have published a side-by-side comparison of its new numbers with what the projected losses would be under the auditor-approved methodology that Treasury had used previously and will
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Tags: AIG, American International Group, Automakers, Bank bailouts, Banks, Barney Frank, bonuses, Chris Dodd, Fraud, Hank Paulson, lending, Main Street, Moral Hazard, Neil Barofsky, Recession, Sigtarp, Steve Rattner, TARP, Tim Geithner, too-big-to-fail, transparency, unemployment, Wall Street
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by ilene - February 2nd, 2010 10:00 am
By Yves Smith at Naked Capitalism
You have to love it. If the allegations prove true, it provides further evidence that the banksters cannot contain themselves. Here they get their bacon saved by the TARP (which was way too cheaply priced relative to the risk involved) and a host of hidden subsidies and supports. Yet the employees cannot stand to let an opportunity for personal enrichment go to waste, legal or not.
The Financial Times appears to have broken the story that the Office of the Special Inspector General is investigating reports of insider trading in connection with the TARP. And what makes this probe potentially serious (aside from the brazenness of it) is that the suspects include executives as well as foot soldiers:
Eight of the largest banks in the US received between $2bn and $25bn in October 2008 under a programme to prop up the financial system led by Hank Paulson, then Treasury secretary.
Dozens more institutions followed and Mr Barofsky, who examines the troubled asset relief programme, is looking into whether information improperly made its way to trading rooms during a feverish period in which the government and banks were frequently exchanging information.
“We have pending investigations looking into that – typically into insider trading,” he said. “Once upon a time getting Tarp funds actually meant your stock price would go up and we are looking at specific trading around Tarp announcements by insiders or looking at potential tips from insiders.”
Yves here. With the notable exception of the network surrounding Raj Rajaratnam, nearly all insider trading scandals have involved junior employees as the ones leaking confidential information, usually on corporate mergers. While most M&A deals involve lots of junior level support, knowledge of pending TARP financings at a particular firm would presumably be limited to comparatively few people, and then largely the very top officers… continue here.>>
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Be sure to watch this one also, via Mish
Neil Barofsky Says Handcuffs Are Coming
Tags: insider trading, Neil Barofsky, Sigtarp, TARP
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by ilene - November 18th, 2009 8:28 pm
The Huffington Post has a couple articles on the highly critical SIGTARP report discussed previously by The Epicurean Dealmaker. - Ilene
A brutal report issued Monday by a government watchdog holds Timothy Geithner — then the head of the Federal Reserve Bank of New York and now the nation’s Treasury Secretary — responsible for overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.
The authoritative new narrative describes how, while bailing out insurance giant AIG last fall, a team led by Geithner failed nearly every step of the way.
Instead of bargaining with AIG’s numerous counterparties to resolve its billions of dollars in souring derivatives contracts, Geithner’s team ended up paying top dollar for toxic assets — "an amount far above their market value at the time," the report notes.
"There is no question that the effect of FRBNY’s decisions — indeed, the very design of the federal assistance to AIG — was that tens of billions of dollars of Government money was funneled inexorably and directly to AIG’s counterparties," the Office of the Special Inspector General for the Troubled Asset Relief Program said.
Wall Street firms like Goldman Sachs, Merrill Lynch and Wachovia got full value for their derivatives contracts with AIG, and taxpayers got the bill. In total, $27.1 billion of public money was transferred to companies that did business with AIG…
Read more here.
As Goldman Sachs put it in a press release last March, the bank had "no material direct economic exposure" to AIG.
Well, it depends on what you mean by "material direct economic exposure."
In a report issued earlier this week, TARP special inspector general Neil Barofsky took a shot at Goldman’s claim that it was insulated against AIG’s demise. While, the report’s language is arcane, the message is simple: if AIG had gone under, Goldman Sachs would have had significant difficulty trying to collect on the the derivatives bets it placed with other banks in order to offset potential AIG losses.
Full article here.
Tags: American International Group, Bailout, Federal Reserve, Federal Reserve Bank Of New York, Financial Crisis, Goldman Sachs, Merrill Lynch, Neil Barofsky, Sigtarp, TARP, Tim Geithner, Troubled Asset Relief Program
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by ilene - November 18th, 2009 7:29 pm
The release of the Special Inspector General of the TARP’s (SIGTARP) report on the Federal Reserve’s bailout of AIG’s counterparties to the tune of 100 cents on the dollar has triggered some debate among commentators. It seems clear that the Fed had the leverage to negotiate a better deal on behalf of the taxpayers, but utterly failed to do so. But just how horrendous was the Fed’s failure? - Ilene
Courtesy of The Epicurean Dealmaker
"No matter how many times you save the world, it always manages to get back in jeopardy again. Sometimes I just want it to stay saved, you know? For a little bit? I feel like the maid: ‘I just cleaned up this mess! Can we keep it clean for … for ten minutes?!’"
— The Incredibles
I don’t know about you, Dear and Long-Suffering Readers, but I am beginning to worry about Yves Smith. [See Yves's Very Abbreviated Takedown on SIGTARP Report on AIG CDS Payouts]
The indefatigable blogger and soon-to-be-published author is really showing the strain of commenting from the front lines of the global financial crisis, as she has done, admirably, from the very beginning. Today, she lit into Neil Barofsky’s SIGTARP post mortem on the New York Fed’s disbursement of billions of taxpayer dollars to cancel credit default swaps written by the pathetic boobs at AIG. AIG sold those swaps, you may remember, under the cheerfully naive assumption that, as long as you hold a AAA credit rating and employ a bunch of overpaid financial engineers in a fancy office on Curzon Street, you can write as many naked puts on as much toxic crap as you like with no consequences. Much as I would be delighted to learn otherwise, I believe we may safely consider that presumption to be dead, buried, decayed, mixed into topsoil, and completely absorbed into the Earth’s mantle via tectonic subduction by now.
In the meantime, however, the rest of us continue to live with the consequences of AIG’s tomfoolery, and Ms Smith remains understandably upset about this state of affairs. So much so, in fact, I think she rather unfairly pans Mr. Baroksky’s report as unacceptably timid and mealy-mouthed. I read her to say she would rather have the report blast the Fed’s mishandling of the AIG crisis in no uncertain terms, not sugarcoat its…
Tags: AIG CDS Payouts, Geithner, Naked Capitalism, Neil Barofsky, New York Fed, SIGTARP Report, taxpayer, THE EPICUREAN DEALMAKER, the Federal Reserve
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by ilene - October 8th, 2009 12:48 pm
Courtesy of Edward Harrison at Credit Writedowns
Hank Paulson and Ben Bernanke told us when the Troubled Asset Relief Program (TARP) was launched that they were not concerned about the health of our banking system. In fact, this was not the case. They were concerned about specific institutions and the overall health of the system. The U.S. financial system was much weaker than we were led to believe as I indicated at the time.
Now the TARP Special Inspector Neil Barofsky is telling the American people what many of us knew all along. Listen to what he says in the video below with MSNBC’s Dylan Ratigan. His contention that these false premises undermined the credibility of TARP and subsequent government economic policy rings true. Even today, we don’t know what the banks are doing with their TARP funds. If they are loaning it out, why is the unemployment rate 9.8%?
By the way, I love D-Rat. This is a guy who likes to talk – god bless him. Sometimes he goes on way too much, but I like his approach.
Tags: Ben Bernanke, Dylan Ratigan, Economy, false pretense, Financial System, Hank Paulson, Neil Barofsky, TARP
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by ilene - July 21st, 2009 3:38 am
More on the $23.7 Trillion Bailout, courtesy of Mish.
Some numbers are so large they simply become incomprehensible.
Remember when costs of the bailout were projected to be $0.5 Trillion, then $1 Trillion, then $3 Trillion.
Now, Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program says U.S. Rescue May Reach $23.7 Trillion.
U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.
“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.
Costs include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs, he said.
Barofsky offered criticism in a separate quarterly report of Treasury’s implementation of TARP, saying the department has “repeatedly failed to adopt recommendations” needed to provide transparency and fulfill the administration’s goal to implement TARP “with the highest degree of accountability.”
As a result, taxpayers don’t know how TARP recipients are using the money or the value of the investments, he said in the report.
Banks Fail to Make Adequate Loan-Loss Provisions
Moody’s says Banks Fail to Make Adequate Loan-Loss Provisions.
Banks have failed to make adequate provision for the losses on loans and securities they face before the end of next year, Moody’s Investors Service said.
U.S. banks may incur about $470 billion of losses and writedowns by the end of 2010, which may cause the banks to be unprofitable in the period, the ratings company said in a report published today. “Large loan losses have yet to be recognized in the banking system,” Moody’s said. “We expect to see rising provisioning needs well into 2010.”
Banks and financial firms worldwide have reported losses and writedowns of $1.5 trillion since the
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Tags: $23.7 Trillion, Neil Barofsky, TARP Special Investigator
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.