The government bought up a whole lot of stuff with TARP. So now the government owns a whole lot of stuff that it doesn't really want to own.
Christy Romero, special investigator general for the Troubled Asset Relief Program—TARP is one of the big bailouts you remember from 2008, in which the government bought up a bunch of stuff with the goal of stabilizing the financial sector—gave an interview worth reading to MarketWatch, in which she addressed the headline-making plans for the U.S. Treasury to sell off more than half of its interest in insurance giant, AIG, then moved on to discussing other aspects of TARP.
Here's what she said about the government's 74 percent stake in Ally Financial, a huge bank formerly known as General Motors Acceptance Corporation in which the government invested $5 billion:
I’m very concerned. This is one where there is truly no exit plan to get out of TARP. The common stock that Treasury holds is not public. It needs an IPO. They filed to do an IPO and then its residential mortgage unit filed for bankruptcy and Treasury came out with a statement saying that filing of the bankruptcy put off the IPO, so it’s not at all clear that the plan is.
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What she's saying: The government bought up a whole lot of stuff with TARP. So now the government owns a whole lot of stuff that it doesn't really want to own. She's saying there's not really a clear next step planned out, let alone a clear, full plan. In the case of Ally, she's talking about that $5 billion investment.
If you read the interview, she says the same thing about other TARP investments, too.
Read the whole thing here. If you'd like to make a drinking game out of it, take a drink every time she says she's "concerned." Just don't make any significant business decisions after that.
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