(Reader note 1: posting will be light through the weekend….taking a few days off)
Volcker criticizes bankers (Dealbook) “Wake up gentlemen.” Indeed.
Geithner extends TARP to next October (Treasury) He buries the lead near the bottom of his letter. It had been scheduled to expire in December. Nothing so permanent as a temporary government program….
Update from this morning: Neel Kashkari joins PIMCO (Ishmael, Alphaville)
TARP cost estimate falls $200 billion (Somerville, Reuters) Even after this latest reduction, the administration still estimates TARP will cost $141 billion. We may be getting more back than we though, but we’re not making money. Remember, the Fed still has north of $1.0 trillion or mortgage-backed securities on its balance sheet, the value of which is not clear.
This is a fun story: The $700 billion man (Laura Blumenfeld, WaPo)
It all began as it ended, abruptly. [Neel] Kashkari was a 35-year-old business school graduate from a suburb of Akron, Ohio, who had gone to Washington in 2006 to learn how government worked. Then came the recession, and through a freakish set of circumstances, mixing pluck, cataclysm and luck, he was appointed by Treasury Secretary Hank Paulson as the federal bailout chief.
From Deborah Solomon and Jonathan Weisman at WSJ:
The administration wants to keep some of the unspent [TARP] funds available for emergencies, but is considering setting aside a chunk for debt reduction, according to people familiar with the matter. It is also expected to lower the projected long-term cost of the program — the amount it expects to lose — to as little as $200 billion from $341 billion estimated in August.
Tim Geithner testified before the Congressional Oversight Panel for TARP this afternoon. A few interesting comments with respect to Treasury’s bailout initiatives:
Charging a bank for an implicit government guarantee to absorb losses? According to the Wall Street Journal, the Federal Reserve and Treasury are demanding that Bank of America pay $500 million to exit a bailout deal that was never actually signed.