http://www.foxbusiness.com/story/ma...wont-ask-second-half-tarp-unless-obama-wants/
Members of Obama’s economic team, including Timothy Geithner, who has been nominated to be Treasury Secretary, are proposing the funds to be used for new things like preventing foreclosures and placing tougher conditions on companies that get TARP funding.
The majority of the first half of TARP money has gone to bail out banks and to get them to start lending again, with little focus on foreclosures. Credit remains tight, which has upset lawmakers.
I hate to say this but I believe it will be too late as the damage has been done. I think bailing out the banks was a mistake. Yes credit remains tight. I read one car dealers break down of approvals, last year at this time there was an 80% approval for a car loan, now you are lucky if it is 50%.
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The problem is that the banks in question haven't used the TARP funds nearly enough for what was meant to be an important part of their intended use- to stimulate economic growth through loans. Car loans, mortgage loans, etc. remain somewhat stagnant as a result. Overnight lending in the interbank system is less stifled as compared to previous months, as confirmed by the significant lowering of the LIBOR rates.
It's kind of amazing the the banking sector is, accross the board, refusing to account for how they actually spent the TARP money. Look at the stock market today- BOA getting hammered, Citigroup down what, 25% in 2 days? Between the riduclous, unmonitored leveraging of the financial sector via CDOs, SIV's and credit default swaps, banks have to recapitalize their balance sheets to remain solvent- if they can. I don't think that Citigroup- now back under $5/share, can remain solvent. One of the banks, UBS or HSBC, can't remember, needs to come up with $30 billion, and quick. The TARP allocation of $700 billion is a stop gap drop in the bucket- this is a global, $550 TRILLION problem. That's how far out of hand it is.
Some good commentary on the subject has been written by Nouriel Roubini, Meredith Whitney, and Sanjayit Das. Cheers.