Is the Obama Admin really prohibiting repayment of TARP funds?

[Egalitariat]

I've read this in many places but can't believe it is true. They seem to imply the Obama administration would rather have the control over private sector companies than have the taxpayers' money repaid.

Is this real?

[NYCGirl]

1. Which "many places"? You have any links for that? NT

[Skittles]

2. can't say how the source is but

this is all I could find

http://www.tickerforum.org/cgi-ticker/akcs-www?post=90052&ord=1123070

[NYCGirl]

4. And that's from Fox's Stuart Varney. NT

[Skittles]

7. that about says it all

[ColbertWatcher]

3. I doubt it's real.

It sounds like more GOP-controlled media-generated lies.

Unless you hear it out of Obama's mouth, it's not likely he actually said it.

[BlooInBloo]

5. Name those places.

[Wickerman]

6. Yes, and he's gonna take your guns, give aid and comfort to terrorists

and spread dandelions in your lawn. If you don't have a lawn he's surely already pissed in your cornflakes.

[Renew Deal]

8. I think they're doing it on purpose.

So they can make sure it all doesn't go to hell. It was started by Paulson. Paulson forced a bunch of banks to take money whether they needed it or not.

[MarjorieG]

9. I heard concern by banks more about regulations, and our advising difficulty of giving again. R

[On the Road]

10. I Hate to Say It,

but that is actually a sensible inference to draw. If Bush did something like that, I certainly would question it.

I believe the truth, however, is more mundane, and already in the public record. The TARP funds were offered to all qualifying instutions, some of whom were healthy and some who may have been technically insolvent. It was considered important to hide the weakest institutions, since any hint of bank failure can be a self-fulfilling prophecy. So even healthy institutions were pressed to take the loans in order to hide the culprits. It's the same reason the Fed still won't identify the recipient of the emergency $2T in loans on Sep 15.

Firms that want to return the TARP funds are likewise being pressured to keep suspicions diffused. (Personally I think JP Morgan is the worst off, but who knows?)

[Hawkowl]

11. Exactly true!

I think you hit the nail on the head. If the solvent banks are allowed to return the money, the truly insolvent banks will be revealed, and then there would be a "run" on these banks, forcing them into receivership. This, ironically, WOULD allow Obama to control the banks. He'd have no choice then.