TARP Has Lost 40% Since Inception

by: Tyler Durden

Or Zombie Banks 1, Taxpayers 0.

In reality was looking for a minus infinity symbol but blogspot is woefully inadequate when expressing involuntary taxpayer performance. The latest shock to the U.S. taxpayer came last Friday when the Ethisphere TARP index recorded a $21 billion drop in value. The TARP Index, created by the Ethisphere Institute, tracks the U.S. Federal Government's return under its TARP investments. Out of the $306.1 billion so far handed out under TARP since its inception, there has been an unrealized loss of $123 billion, compliments mostly of the big 4: C, BAC, WFC and JPM. In other words, the U.S. Government (and its taxpaying funders) has lost over 40% of their investment. This translates into a loss of $1,082 per every US household, roughly double the proposed stimulus tax credit.

Hank Paulson and Bush's administration have already received earfuls for failing to ensure the initial $350 billion of funds was spent properly, as critics point out such wasteful transgressions as Citi's $8 billion loan to Duai's government, JPM's $1 billion investment in India, and Bank of America's $7 billion investment in China Construction Bank Corp.

This past week marked the largest downward slide of the Ethisphere TARP Index since its creation, losing just under $21 billion in value. Ethisphere estimates that more than a third of the TARP companies have lost at least 25 percent of their value to date," said Stefan Linssen, Managing Editor of Ethisphere Magazine and one of the lead research analysts behind the Ethisphere TARP Index. “More rumors surfaced that Bank of America would take the path of Citigroup and have the Treasury convert a substantial amount of its preferred shares to common stock, though CEO Ken Lewis continues to adamantly deny that the bank will need any more infusion of capital of any kind. Aside from Citigroup, Ethisphere estimates that the rest of the calamity investments were relatively stable this past week.

And just so taxpayers know who to direct their righteous indignation at, here are the winners and losers, or zombie banks as the latter are better known.

The largest estimated losses to date under TARP are:
1. Citigroup (NYSE:C) – with an estimated loss of $35.9 billion
2. Wells Fargo (NYSE:WFC) – with an estimated loss of $12.5 billion
3. Bank of America (NYSE:BAC) – with an estimated loss of $11.3 billion
4. JP Morgan (NYSE:JPM) – with an estimated loss of $6.3 billion
The largest estimated gains to date under TARP are:
1. Great Southern Bancorp (NASDAQ:GSBC) – with an estimated gain of $11.1 million
2. Community Bankers Trust Corp (BTC) – with an estimated gain of $2.0 million
3. First Citizens Banc Corp (NASDAQ:FCZA) – with an estimated gain of $1.5 million

About this article:

Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here