Treasury Secretary Henry Paulson has finally conceded the obvious: There is no longer a toxic asset relief program, or TARP as it was originally called. Toxic assets are not being purchased from financial services company at below market, market, above market, or even supermarket prices, for that matter. It just isnâ€™t happening.
Why not? Partly because it wasnâ€™t the best first thing to do anyway. While it was a cool markets uber alles exercise â€“ weâ€™ll let the market solve the marketâ€™s problem! â€“ and a neat grad school thesis project, it was wildly impractical, and it never seemed any less so no matter how many times it was explained.
Instead, there is a $350-$700b Treasury slush fund for doing â€¦ stuff to get credit markets working. Mostly consumer credit. Now, thatâ€™s not a terrible idea, but it also requires immense trust in the person/people doing the spending. It also creates a very high transparency and procedural hurdle to be cleared by the those same people. After all, the opportunities for abuse and scope creep were always large, and they have now become immense and palpable.
Letâ€™s stop talking about TARP. It doesnâ€™t exist. Call it the PKFKATARP, at best â€“ or if itâ€™s to be all about consumers, maybe just CARP. Either way, it would be nice to know more about what the hell is going on and why. Iâ€™m just saying.
[Update] GE is now newly on the list of The Saved. No surprise, as this had been chattered for some time, but we really need to make clearer to people â€“ taxpayer â€“ what separates the saved from the damned.