Treasury Secretary Timothy Geithner is “sensibly laying out pretty strict criteria” for when banks can pay back their TARP bailout money, said Felix Salmon in Reuters. That’s good: It isn’t enough that an individual bank is healthy, when the broader financial system and credit flow are not. But the TARP legislation is “pretty unambiguous” that Geithner can’t stop banks from paying the Treasury back, so this will be a test of Geithner’s power.
You’d think Geithner would welcome some money flowing back into the TARP coffers, said Dwight Cass in BreakingViews.com (via Fortune), and the markets would certainly cheer banks able to survive on private capital. Besides, who can blame “relatively strong” banks such as Goldman Sachs and JPMorgan for wanting to “shuck off” the TARP “scarlet letter”?
The problem is that those banks are mostly strong on paper, said Andrew Ross Sorkin in The New York Times. In reality, each bank is busy pulling an accounting “bunny out of the hat” to wow investors with better-than-expected—and better-than-merited—earnings. So far, investors aren’t buying the “amateur hour” magic.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- How I lost all my money
- Diagnosing the Home Alone burglars' injuries: A professional weighs in
- How academia's liberal bias is killing social science
- How to make the ultimate grilled cheese
- 43 TV shows to watch in 2014
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- Why Pakistan won't hunt down the terrorists within its borders
- 10 things you need to know today: December 21, 2014
- The age of miracles is over — even for the religious
- A brief history of the Christmas present
Subscribe to the Week