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UPDATE 3:
The Fed accepted CCC-or-lower collateral under the Primary Dealer Credit Facility from September 15, 2008 until May 12, 2009. A total of $490.9576 billion in such collateral was accepted. That's billion, with a "b." And you thought TARP was a bailout.
...UPDATE 5:
The Fed accepted a total of $1.31 trillion in junk-rated collateral between Sept. 15, 2008 and May 12, 2009 through the Primary Dealer Credit Facility. TARP was nothing compared to this.
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UPDATE 8:
This Fed Audit data should shame all of the conventional-wisdom Democrats out there declaring TARP a success because of the recent CBO score. To put it mildly, these folks are totally missing the point. TARP was a "success" in large part because of the Fed's no-strings-attached efforts. And we now know that the Fed was willing to accept junk-- literally junk bonds-- as collateral for its no-strings-attached loans.
TARP and the stress tests only "worked" insofar as they convinced banks that the government would shoulder infinite future losses from the banking sector. We're now paying the price for that commitment in the form of massive foreclosure fraud, in which untold numbers of borrowers are being improperly kicked out of their homes in the name of bank profits.
TARP failed. Its losses are so low because the Fed stood behind the banks, allowing them to play one arm of the government against the other. Even if we had "turned a profit" on TARP at its formal interest rate without Fed malfeasance, look what we got in return. In the Depression, FDR secured massive national foreclosure relief and still turned a profit. Today, we have a predatory program called HAMP.
The Economist's Democracy in America blog has an equally excellent analysis:
The careerists scattered about the world in America's intelligence agencies, military, and consular offices largely operate behind a veil of secrecy executing policy which is itself largely secret. American citizens mostly have no idea what they are doing, or whether what they are doing is working out well. The actually-existing structure and strategy of the American empire remains a near-total mystery to those who foot the bill and whose children fight its wars. And that is the way the elite of America's unelected permanent state, perhaps the most powerful class of people on Earth, like it.
