TARP is working! Critics lambasted Obama’s administration’s Troubled asset Relief Program some months ago. It was not only a political risk for President Obama but also the taxpayers. It was not a small sum either, it was US$700bn. Yet, various signs have indicated that these concerns are very pessimistic.
Recently, bank of America decided to repay US$45bn to the federal government, leaving Citi Bank to be the last largest financial institution to repay its debt. There were also signs that TARP- the biggest and first use of taxpayer money may break even, as the loan to banks come in dividends and interests.
On the side note, US economy has two pieces of good news, lower than expected unemployment (10%) and evaluation of the US dollar (perhaps not good news for traders).
While these indicate that the economy is recovering, they create uncertainty as well. We can only aver “we’re out of recession” after a few months of observation. During this period, we’ll expect speculations.
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