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TARP didn't save banks, it ruined them: Kovacevich (video at link)
CNBC ^ | Published: Friday, 13 Sep 2013 | 11:08 AM ET | By: Matthew J. Belvedere | Producer, CNBC's "Squawk Box"

Posted on 09/13/2013 11:28:06 AM PDT by Perdogg

TARP was one of the "worst decisions in the history of the United States," former Wells Fargo boss Richard Kovacevich told CNBC on Friday.

Kovacevich has never been known to mince words.

He was in the room five years ago when the financial world was blowing up and then-Treasury Secretary Hank Paulson was pitching the $700 billion Troubled Asset Relief Program, known as TARP, to the banking industry.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Extended News
KEYWORDS:

1 posted on 09/13/2013 11:28:06 AM PDT by Perdogg
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To: xzins; Wyatt's Torch; SeekAndFind; John W

ping


2 posted on 09/13/2013 11:35:12 AM PDT by Perdogg (Cruz-Paul 2016)
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To: Perdogg

Meanwhile, the Congress services each other?


3 posted on 09/13/2013 11:37:31 AM PDT by ExTexasRedhead
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To: Perdogg

TARP tried to keep customers in the dark about which banks needed to be bailed out (or sent into bankruptcy) and which didn’t. On of the tenets of capitalism is information, while that of government is secrecy.


4 posted on 09/13/2013 11:41:58 AM PDT by KarlInOhio (Why is our military going to be used as Al Qaeda's air force in Syria?)
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To: Perdogg

bttt


5 posted on 09/13/2013 11:43:01 AM PDT by SoFloFreeper
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To: SoFloFreeper

bump


6 posted on 09/13/2013 11:53:16 AM PDT by Lorianne (fedgov, taxporkmoney)
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To: Perdogg

Tarp wasn’t intended to save banks. It was created to use the power of government for stealing from the working class to give to the elites.


7 posted on 09/13/2013 12:44:50 PM PDT by freedomfiter2 (Brutal acts of commission and yawning acts of omission both strengthen the hand of the devil.)
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To: Lorianne

I don’t know who is right, Paulson or Kovacevich, but I do know this; if Tarp was undertaken to save the currency, it was the right thing to do. If it was undertaken to save a few banks it was the wrong thing to do. Let’s face it, our money has no backing other than people’s willingness to accept it as payment. You can’t exchange it for anything. If you introduce a risk premium for every dollar transaction you reduce its value accordingly and that would have been a spiraling disaster. But a few banks and their stock go under, well, that life in capital(ism) city. I know it was the government that coerced them into making bad loans, but I didn’t see them objecting once they found a way to make some money and shift the risk.


8 posted on 09/13/2013 12:44:54 PM PDT by Old North State
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To: Perdogg

I was thinking about how Greenspan at least keyed on oil prices......but how he saw a “conundrum” about long term interest rates. Remember when Greenspan stated his belief that he “lost control over long term interest rates because of globalization”???? Bernanke believes he has direct, complete control over long term interest rates.
Both were WRONG. Long term rates at tied to inflation & economic outlook.
No matter what the Federal Reserve does, it can make businesses hire workers if there is no work for the workers to do....it can’t force people to lend money or borrow money—no matter what interest rates are-—if people are afraid of risk & might not be able to pay back the money....
Also, the FED cannot trick people into buying by causing prices to rise because people know the difference between prices rising because of money & inflation-—and price increases because of shortages.
A supply side Fed hurts demand if it drives up prices of anything-—but especially if it drives up gas and food prices. High gas prices make people PESSIMISTIC and takes away discretionary dollars from the economy.
Bernanke has tried to cause a “wealth effect”...but doesn’t that mistake cause and effect??? It’s an “effect” of optimism...& 1990s optimism of a balanced budget, great economy, great stock market——caused a wealth “effect” that cannot be replicated by the FED. You get a wealth “effect” from optimism.......but most people are still pessimistic about the economy and budget.


9 posted on 09/13/2013 12:56:59 PM PDT by Beowulf9
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To: Perdogg

Correction:

“No matter what the Federal Reserve does, it can make businesses hire workers if there is no work for the workers to do”

should read CANNOT...make businesses...


10 posted on 09/13/2013 12:59:44 PM PDT by Beowulf9
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To: freedomfiter2
Tarp wasn’t intended to save banks. It was created to use the power of government for stealing from the working class to give to the elites.

The banks are the elite. The money had already been stolen one mortgage at a time, one crappy mortgage-based-security at a time. TARP was the sting part of the scam, when the government had to create money to cover up the original theft - and the bankers got most of that too.

The direct effect was to appear to save the banks from the bust, the indirect effect was to cover up the regulators' and legislators' malfeasance in setting up the boom. That the dollar will be trashed is an unfortunate side effect. Luckily, the elite now have the means to cope with the falling dollar.

So, I agree with you, just differ on the wording.

11 posted on 09/13/2013 1:05:40 PM PDT by slowhandluke (It's hard to be cynical enough in this age.)
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To: slowhandluke
I don't believe a effing thing Wells Fargo says. They tried to take my house because they can't keep record straight or they are crooks. You chose which you want to believe of the two. Had to spend 2.5 hours on the phone with the comptroller of the currency to get it taken care of. This was after months of fighting with Wells Fargo. We had every record going back over 17 years to prove we were right.

WELLS FARGO ARE CROOKS. That's my belief. That said I think they the government is just as bad.

12 posted on 09/13/2013 1:16:19 PM PDT by jimpick
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To: slowhandluke

Paulson said TARP was the best option at the time, and the proof of that is that the “money has come back; all that, plus $32 billion.”
That ‘Profit’ is the argument given by TARP supporters. But to me, it just shows their ignorance. WHO paid the fees and interest to the institutions that made the profit to be given ‘back’? Like you so rightly said, ‘TARP was the sting part of the scam’.


13 posted on 09/13/2013 3:38:21 PM PDT by griswold3
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To: Old North State
if Tarp was undertaken to save the currency, it was the right thing to do. If it was undertaken to save a few banks it was the wrong thing to do.

It wasn't undertaken to save the currency. It was passed by economic ignoramuses who believe that the finance industry is the underpinning of the American economy. It isn't. Americans who make things drive the economy.

The financial sector has grown so big only because the Fed has been debasing the dollar for fifty some years now. When a currency is constantly being cheapened then economic activity turns from producing goods to betting on money.

The banks in trouble should have been allowed to go under. We'd be out of this mess by now if they had. We did just what the Japanese did in the early nineties -- and we all know how well that worked out.

14 posted on 09/13/2013 4:38:07 PM PDT by BfloGuy (People who know what they’re talking about don’t need PowerPoint.)
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