Well, now we know the real reasons as to why Bernanke, Summers and Emanuel were all over the Sunday talk shows telling us why they won't be needing any more TARP (Troubled Asset Relief Program) money. It's simple, really. After today's report hits the Hill from Bailout Inspector General Neil Barofsky's office, the administration doesn't stand a snowball's chance in hell of getting another cent.
I'd even go as far as to say that some heads are gonna' roll.
In what may only be described as a scathing, brutal indictment of the Federal Reserve's and the Treasury Department's management of the Wall Street bailout to date, the New York Times front page for Tuesday tells us how Bailout Inspector General Neil Barofsky's latest report, scheduled for release later today, no less than slams U.S. government bailout efforts, especially with regard to the "public-private investment partnerships," (i.e.: "TALF") calling them: "...inherently vulnerable to fraud and should not be started without stronger safeguards."
Concerning ongoing bailouts for AIG:
"...not only (would it) be a failure of oversight, but (it) could call into question the credibility of the government's efforts..."
Here's the whole story. It's a must-read, IMHO: Programs to Help Banks Are Seen as Open to Fraud.
Frankly, I don't see how Secretary Geithner and Fed Chair Bernanke are going to be able to defend their job performance after this story circulates. Meanwhile, Geithner's due up on the Hill for testimony today, too. Should be quite a circus.
Programs to Help Banks Are Seen as Open to Fraud
By EDMUND L. ANDREWS
Published: April 21, 2009
WASHINGTON -- The Treasury Department's most ambitious plans to rescue troubled banks -- partnerships between the government and private investors, backed by the Federal Reserve -- are inherently vulnerable to fraud and should not be started without stronger safeguards, a top government investigator warned in a report to be released Tuesday.
The report also warned that the Treasury's $700 billion Troubled Asset Relief Program has evolved into a $3 trillion effort of "unprecedented scope, scale and complexity" and comes with too little oversight and too little information about what companies are doing with the taxpayer money they are getting.
--SNIP--
Noting the widespread public outrage unleashed over the Treasury's huge payments to the American International Group, the failing insurance conglomerate, Mr. Barofsky warned that Treasury officials were jeopardizing the credibility of their efforts by not requiring companies to disclose far more about their use of taxpayer money.
"Failure to impose this requirement with respect to the injection of yet another $30 billion into A.I.G. would not only be a failure of oversight, but could call into question the credibility of the government's efforts..."
First, TARP Oversight Committee Chair Elizabeth Warren tells us of how poorly everything's being managed. Now, Bailout I.G. Neil Barofsky's report says it's even worse than what we first heard from Ms. Warren.
Need I say anything else?
What do you say?