A Recurring TARP Nightmare
While the deployment of the second iteration of TARP is being discussed on Capitol Hill, there were a couple of very distressing 
pieces of news that I read today. The first piece from the Wall Street Journal showed that based on banks own reports, 10 of the 13 largest beneficiaries of TARP are lending less now that they have $148 billion in TARP funds (see the WSJ chart). Amazingly, with more than $90 billion dollars in TARP funding between them, Citi (C) and Bank of America (BAC) are keeping those funds in reserve as they are more risk averse in this environment. We are not advocating loosening lending standards, but perhaps it is a scary picture of the fact that there isn’t anywhere to put these funds to use. However, the article quotes a finance professor from Duke University, whose study claims that 59% of U.S.
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