Bailout Nation: Was TARP Just a Ruse to Protect Citigroup?

Bailout Nation: Was TARP Just a Ruse to Protect Citigroup?

http://finance.yahoo.com/tech-ticker/article/264931/Bailout-Nation-Was-TARP-Just-a-Ruse-to-Protect-Citigroup?tickers=MS,JPM,C,BAC,XLF,FAS,FAZ,

With JPMorgan, Morgan Stanley and other big banks reportedly set to start repaying TARP funds as early as tomorrow, many are ready to turn the page on this sordid chapter in our nation's financial history.

But Barry Ritholtz, CEO of Fusion IQ and author of Bailout Nation, is still trying to figure out why we went through the whole exercise in the first place.

In his new book Bailout Nation, Ritholtz discusses the possibility that TARP was all a giant ruse, "a Hank Paulson engineered scam to cover up the simple fact that Citigroup was teetering on the brink of implosion," has he writes in his popular blog The Big Picture. "A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks."

We delve further into this theory in the accompanying video. While it can never be fully proven, Ritholtz's "just a ruse to protect Citi" idea seems plausible given:

* The reaction of many other banks forced to take TARP funds;
* The extraordinary level of bailouts and debt guarantees aimed specifically at Citi;
* Regulators' fears last fall about the "systemic risk" if a big bank were allowed to fail.

UP AND DOWN WALL STREET DAILY The Market's Formula: A Square-Root Rally

UP AND DOWN WALL STREET DAILY
The Market's Formula: A Square-Root Rally

(Source BARRONS)By RANDALL W. FORSYTH
After nailing a 40% surge since early March, Doug Kass sees "potholes" in the road ahead.
LONG-TIME SHORT-SELLER Doug Kass shocked many of his followers by turning bullish at the beginning of March -- just before the stock market took off on a 40% tear.

Now, with the major averages up sharply from what he called at the time "generational lows," the skipper of Seabreeze Partners sees the road ahead to higher ground strewn with potholes.
Speaking at a conference presented by Barry Ritholtz, the money manager and author of the popular Big Picture blog, Kass recalled that when he made his bullish call in early March, stocks had been through their second-worst bear market ever in terms of price and multiple compression.
Price-earnings multiples had fallen to levels consistent with 6% inflation, while 46% of the Standard & Poor's 500 stocks paid dividend yields exceeding the Treasury 10-year note. Other valuation measures also were rock-bottom; stocks traded at 90% of replacement value while the market's capitalization was just 78% of gross-domestic product. Read Article...
http://online.barrons.com/article/SB124404271987981539.html