The Troubled Asset Relief Program (TARP ) program love for the rich
By Snuff Magee
BNW YOUR MONEY The Troubled Asset Relief Program (TARP ) was first presented by then Treasury Secretary Henry Paulson in September of 2008, and was another give away to the rich in this country, who just keep on getting richer. What happened was that most of the companies that got the money didnt need the money in the first place, but held the money long enough to make millions in interest off the money. That was love for you, baby! Thats why they were able to pay the money back so quickly.
The troubled assets relief program was designed to take bad mortgages off the books of financial institutions in America, and onto the books of the federal government. Some refer to it as the troubled asset relief program 2008 or mortgage bailout bill. To a point thats true for companies like Goldman Sachs, JP Morgan and AIG, but most of the pay-out went to companies that didnt need the money. If Means Testing was applied to the TARP bailout, very few American companies would have gotten paid. A means test is a determination of whether an individual or company is eligible for help from the government.
On October third 2008, the troubled asset relief program passed by the House, thus reversing its Sept. 29 rejection of the bailout. This represented the governments largest step into the financial markets since Franklin Roosevelts New Deal. In hindsight, this money could have been better allocated to the maximum effect, but most of the money went to companies that were well connected with the democrats.
The Treasury Department's $700 billion bailout plan, also known as the Troubled Asset Relief Program (TARP), is one of the main U.S. tools to address the financial crisis .On October14 they set aside $250 billion of the program to buy senior preferred shares and warrants in banks, thrifts and other financial institutions. Half that money was allocated to nine big banks, the Treasury Department has said. Another $38 billion has since been earmarked for regional or small banks, according to statements from individual banks. These regional or small banks were the ones who got paid!
From the get-go, Treasury Department announced its single-biggest TARP investment $40 billion in American International Group (AIG) , which the government said, would not come from the $250 billion bank capital program. AIG didnt need all that money; they were claiming that they lost more money than they had.
The American people are suckers for every trick that comes down the pick, and will fall for anything and stand for nothing.
The TARP has so far committed the following funding:
AIG $40 billion
JP Morgan $25 billion
Citigroup $25 billion
Wells Fargo $25 billion
Bank of America $15 billion
Merrill Lynch $10 billion
Goldman Sachs $10 billion
Morgan Stanley $10 billion
PNC Financial Services $7.7 billion
Bank of New York Mellon $3 billion
State Street Corp $2 billion
Capital One Financial $3.55 billion
Fifth Third Bancorp $3.45 billion
Regions Financial $3.5 billion
SunTrust Banks $3.5 billion
BB&T Corp $3.1 billion
KeyCorp $2.5 billion
Comerica $2.25 billion
Marshall & Ilsley Corp $1.7 billion
Northern Trust Corp $1.5 billion
Huntington Bancshares $1.4 billion
Zions Bancorp $1.4 billion
First Horizon National $866 million
City National Corp $395 million
Valley National Bancorp $330 million
UCBH Holdings Inc $298 million
Umpqua Holdings Corp $214 million
Washington Federal $200 million
First Niagara Financial $186 million
HF Financial Corp $25 million
Bank of Commerce $17 million
TOTAL: $203.08 billion
In addition to the TARP program's $40 billion capital injection into AIG, the Federal Reserve is providing the company with up to $112.5 billion in separate loans and funds for asset purchases. Aid to the huge insurance company came after counterparties and rating downgrades forced AIG to post large amounts of collateral for its credit derivatives positions.
Some other insurers are interested in cash infusions, but must own a thrift or bank in order to qualify under the terms of Treasury's current capital injection program.
The TARP program set a November 14 deadline for smaller banks to apply for capital injection funds remaining in the pool of $250 billion. The deadline will be extended for non-publicly traded banks.
The government's preferred shares will pay dividends of 5 percent annually for the first five years and 9 percent after that until the institution repurchases them. Participating banks must comply with Treasury restrictions on executive compensation, which limit tax deductibility of senior executive pay to $500,000. They require bonuses to be "clawed back" if earnings statements or gains are later proven to be materially inaccurate and prohibit "golden parachute" payments to senior executives.
Struggling automakers General Motors Corp, Ford Motor Co and Chrysler LLC have requested tens of billions of dollars in Treasury aid under TARP. However, the Bush administration says the TARP program was designed by Congress to help the financial service sector, not the auto industry.
REMAINING TARP MONEY
The remaining $350 billion in TARP funding can be accessed only after the White House formally notifies Congress. U.S. House Financial Services Chairman Barney Frank has said that if the initial banks participating in the program do not use the money for lending, Congress could block authorization of the final funding.