T*A*R*P ….Troubled Assets Relief Program… designed to dig the country out of the financial crisis that began in late 2008 has reached a milestone. The amount of funds paid back has actually exceeded all that is currently outstanding! Wow…I am impressed a government bail out that is actually working like they said it would???! According to an article in Pacific Business News recently, by the end of May a total of $194 billion in TARP funds have been repaid compared the $190 billion still outstanding. The completion of the Treasury Department’s sale of 1.5 billion shares of Citigroup garnered $6.2 billion in recaptured funds to American taxpayers helping tip the scale favorably in the report. Taxpayers have also received $23 billion from dividends, interest and other income through TARP which was created to bail out the financial system but is being used to prop up General Motors and Chrysler as well.
The adjusted estimate on what TARP will end up costing the taxpayers is now $105 billion compared to the estimate of last August which was a whopping $341 billion. “Repayments have continued to exceed expectations, substantially reducing the cost to taxpayers” according to Herb Allison, the Treasury’s Assistant Secretary for financial stability. Eighteen months after the financial services industry pledged to pay back every dime, we are now seeing them make good on that pledge. While this is welcome news in the middle of what most still feel was an ill-conceived plan thrust upon the country’s taxpayers, out of 707 institutions who have received TARP funds, nearly 100 banks have failed to make their dividend payments due last quarter and 25 have actually missed the last four quarterly repayments. In Hawaii, Central Pacific Bank received $135 million in exchange for CPFC preferred stock and has yet to make any payments, according to Wayne Kirihara, the CPFC spokesperson.
To the credit of the Hawaii based participants, it did take some time to gain momentum and 18 months into the program, the Hawaii market is just now seeing things sort themselves out. In the beginning it seemed almost impossible to simply wrap arms around the extent of the crisis, blindly dive in and get to the clean up work. Now from the outside looking in as we do, real estate agents are experiencing a lot less chaos when helping distressed borrowers deal with their mortgagees and are making some productive progress towards resolving all the toxic loans, secure properties and get them off the books. As this process continues throughout the state, perhaps we can look more optimistically to those who have yet to make good on their repayment obligations as simply a part of the extended ripple?
As one who usually focuses on the glass as half full, I would like to think we are looking at the light at the tunnel’s end and the greater good shall prevail….but go ahead all you devils advocates!….lets hear your side!