SIGTARP Calls Out Tim Geithner On Various Violations Including Data Manipulation, Lack Of Transparency, "Cruel" Cynicism, And Gross Incompetence

Tyler Durden's picture

SigTarp Neil Barofsky has just released the most scathing critique of all the idiots in the administration, with a particular soft spot for Tim Geithner.

On the failure of TARP to increase lending:

As these quarterly reports to congress have well chronicled and as Treasury itself recently conceded in its acknowledgement that "banks continue to report falling loan balances," TARP has failed to "increase lending" with small businesses in particular unable to secured badly needed credit. Indeed, even now, overall lending continues to contract, despite the hundreds of billions of TARP dollars provided to banks with the express purpose to increase lending.

On TARP's sole success of boosting Wall Street bonuses:

While large bonuses are returning to Wall Street, the nation's poverty rate increased from 13.2% in 2008 to 14.3% in 2009, and for far too many, the recession has ended in name only.

On TARP's failure in general:

Finally, the most specific of TARP's Main Street goals, "preserving homeownership" has so far fallen woefully short, with TARP's portion of the Administration's mortgage modification program yielding only approximately 207,000 ongoing permanent modifications since TARP's inception, a number that stands in stark contrast to the 5.5 million homes receiving foreclosure filings and more than 1.7 million homes that have been lost to foreclosure since January2009.

On the Treasury's scam in minimizing publicized AIG losses, and on Geithner as a Wall Street puppet whose actions are increasingly destroying public faith in the government:

While SIGTARP offers no opinion on the appropriateness or accuracy of the valuation contained in the Retrospective, we believe that the Retrospective fails to meet basic transparency standards by failing to disclose: (1) that the new lower estimate followed a change in the methodology that Treasury previously used to calculate expected losses on its AIG investment; and (2) that Treasury would be required by its auditors to use the older, and presumably less favorable, methodology in the official audited financials statements. To avoid potential confusion, Treasury should have disclosed that it had changed its valuation methodology and should have published a side-by-side comparison of its new numbers with what the projected losses would be under the auditor-approved methodology that Treasury had used previously and will use in the future. This conduct has left the Treasury vulnerable to charges it has manipulated its methodology for calculating losses to present two different numbers depending on its audience: one designed for release in early October as part of a multifaceted publicity campaign touting the positive aspects of TARP and emphasizing the reduction in anticipated losses, and one, audited by the GAO for release in November as part of a larger audited financial statement. Here again, Treasury's unfortunate insensitivity to the values of transparency has led it to engage in conduct that risks further damaging public trust in the Government.

On the perpetuation of moral hazard courtesy of TARP:

Increased moral hazard and concentration in the financial industry continue to be a TARP legacy. The biggest banks are bigger than ever, fueled by the Government support and taxpayer-assisted mergers and acquisitions. And the repeated statement that the Government would stand by these banks during the financial crisis has given a significant advantage to the larger "too big to fail" banks, as reflected in their enhanced credit ratings borner from a market perception the Government will still not let these institutions fails, although the impact of this cost may be blunted by recently enacted regulatory reform.

On the "cruel, false hope" provided by a "cynical" (if not much harsher word) Treasury Secretary:

While it may be true that many homeowners may benefit from temporarily reduced payments even though the modification ultimately fails, Treasury's claim that "every single person"  who participated in HAMP gets a "significant benefit" is either hopelessly out of touch with the real harm that has been inflicted on many families or a cynical attempt to define success as failure. Worse, Treasury's apparent belief that all failed trial modifications are successes may preclude it from seeking to make the meaningful changes necessary to provide the "sustainable" mortgage relief for struggling families it first promised. What Treasury deems a universal benefit, many homeowners, members of Congress, and a growing number of commentators describe as "cruel" and offering little more than "false hope."

On the Treasury's only real focus: bailing out Wall Street and letting Main Street to rot. Granted Hank Paulson is to be blamed here as well for being, what else, a former Goldman CEO, only intent on bailing out his cronies and receiving favorable quotes in books published by journalists known only for their legendary namedropping skills. In this case, it is also one Steve Rattner whose disastrous handling of the GM fiasco is finally coming back to haunt him:

At a time when the country was experiencing the worst economic downturn in generations and the Government was asking its taxpayers to support a $787 billion stimulus package designed primarily to preserve jobs, Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of more than 2,000 small businesses, thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls -all without sufficient consideration of the decisions' broader economic impact...That the automakers have offered reinstatement to hundreds of terminated dealerships in response to Congressional action without any apparent sacrifice of their ongoing viability further demonstrates the possibility that such dramatic and accelerated dealership closings may not have been necessary and underscores the need for Treasury to tread very carefully when considering such decisions in the future.

That's ok. There were record Wall Street bonuses to be paid in 2008, 2009, and, now, in 2010. Thank you TARP.

If after all this disclosure Geithner does not resign, well, America truly will have the Treasury Secretary, not to mention administration, it deserves. And while Timmy is packing his office, can Chris Dodd and Barney Frank please exit by the back door (no pun intended) as well, so this country can finally rid itself of the corrupt oligarchy that does everything to benefit banking and nothing to boost actual economic growth.

There is much more in the 388 page report, which we are combing through right now

Full report here

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greased up deaf guy's picture

too bad nothing will come of it...

janchup's picture

The ballooning police state has other preoccupations, like being granted access to every privately owned computer in America.

macholatte's picture

Said of Google, “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”

Attitude_Check's picture

While interesting -- how is this related to the article?

blindfaith's picture

Guess I will change to Bing, and dump this tool bar from Google ( Chrome is a bust).  How come all the people I know that own Google shares are stock brokers?

No good for research anymore, all roads lead to eBay.

Bob's picture

I've been deeply disappointed in the FBI for its absence in this mess. 

Everybody's seen Goodfellows.  I saw The Seige last weekend.  The FBI used to mean something that people believed in, Hoover notwithstanding. 

We know and even sort of understand the SEC's hands-off policy wrt the guys on the other side of The Street--but what about the FBI?

How about  FBI Director Mueller?????

These guys were "warning" of "widespread fraud" in mortgage originations years ago.  WTF have they been doing with that information since then?

Let us not forget that these are the same guys who dropped the ball with advance knowledge of 9-11 . . .

With friends like these protecting us from threats both foreign and domestic, who needs enemies?

Whose side is the FBI on?

Troy Ounce's picture


According to the FBI, mortgage fraud is fraud commited by the lender, cannot possibly be the mortgage company:

More on this and the incestious relationship between the Mortgage Bankers Association (MBA) and the FBI, Department Comedy Capers:

Bob's picture

So they're nothing but publicly funded goons for the banksters? 

Used to be that corporate warfare required private police forces like the Pinkerton Boyz:

So far it would appear that they've blown it on the largest orgy of organized crime in the history of mankind, after dropping the ball on the the largest incident of terrorism ever. 

Thing is, you know that agents go into that work burning to do the right thing.  Looks to me like they're being misdirected from the top.  Anybody know how morale is among the agents these days?


Bob's picture Prof. William K Black on dereliction of duty by FBI

JHC!  I just got to this, TO.  Dated two days ago.  Looks like I'm in damn good company on this one. 

Looks like even HuffPo is all over it (courtesy of our own Geo Washington):

unum mountaineer's picture

Let us not forget that these are the same guys who dropped the ball with advance knowledge of 9-11 . . .

i look at it like a dog you raise from a pup. maybe you teach it commands in another language that a would-be attacker would not have any knowledge about....your dog who obeys your commands no matter how much they want to go after that obvious aggressor.."sit boy".."stay".."down boy"..easy, no?

blindfaith's picture

The Motion Picture Industry of America and The record companies.  24 armed agents bust into a church senoir center showing a film to 13 alzheimers suffers.  No money paid. 

This is important work and it has time honored priority over Wall Street messes.

SheepDog-One's picture

Something will come of everything, on a long enough timeline! And this timeline is very short now, I just checked in on all the canaries, theyre lying on the bottom of their cages with their feet sticking up.

Jake Lamotta's picture

Sheep you can be a real cunt!

Crab Cake's picture

Nothing will come of it because you refuse to do anything to stop it; except bitch on ZH.

When is enough enough? Need they literally rape you and your family before you stand?

Goldilocks's picture

The “catalyst” … gold & silver is money.

Do something. Get some.'s picture

i got so G A N G  raped three years ago. not just one rape but multiply times and multiply men. i tell you to read this article just makes you utterly sick to your stomach. who can possibly take down this type of mafia? i don't think it can be human.

nope-1004's picture

Send the jerk to jail.



ZeroPower's picture

Your avatar is but a mere pipe dream.

Don't you know big gov rules all?

Bill Lumbergh's picture

He is a CFR member...if he goes they just plug another one in and the circus continues.

faustian bargain's picture

They should put in Angelina least she'd be easy to look at.

Problem Is's picture

What does my avatar tell you?

Timmay needs a comb?

ZeroPower's picture

Ha, larger image was key.

Rahm's picture

Jail?   All he's done is enhanced his resume in the political world.  You have got it backwards, Jail is for the private sector  /sarc (but in reality, that's how it is now-a-days)

PeterSchump's picture

This is the "New America".  Only Neil Barofsky will be jailed.

Silverhog's picture

Sorry, but Gross Incompetence should be first on this list.

Turd Ferguson's picture

Holy smokes! "Scathing" is an understatement!

However, no outrage will ensue, no changes will be made.

Business as usual continues on Wall Street and "K" Street.

BearOfNH's picture

Hopefully in 8 days the American people will express their outrage at the polls. And a Republican House will start holding hearings on this whole mess. Strictly for political points, mind you, but I think some changes will ensue. Not enough, not soon enough, but it's a start.

SRV - ES339's picture

a Republican House will start holding hearings on this whole mess.

May I assume you mean the mess 10 years of GOP policy got us into? At least the GOP majority in the house, courtesy of millions of $s pumped into key races by "black pools" of anonymous corporate contributors (thank you Justice Roberts), will give Boehner and Cantor an opportunity to prove they know how to say anything other than no... if you think these clowns are going to clean up this mess, I suspect you live in CA and will vote yes on Prop 19!

tmosley's picture

Not ten years of Republican policy, 100 years of Republicrat policy.

It's just about the worst policy there is, and it took us from an industrial superpower to a nation of economic cannibals in just a few brief decades.

NotApplicable's picture

Dude, you need to lay of the hopium. That shit's fatal.

Crab Cake's picture

I wish I could summon fairer words, but fuck the Democrats and the Republicans. I have vowed never to vote for either ever again. Two sides of the same debased coin. I refuse to participate in virtual disenfranchisement. I would literally rather be shot than vote for, or have a hand in, the criminal monopolistic actions of the two headed syndicate.

mrhonkytonk1948's picture

Ha ha ha ha ha ha ha ha ha.  Funniest thing I've heard all week.

blindfaith's picture


Mark my works, regardless of which bunch get in the real winners will be the corporations, not political parties, the FED, Timmy, or America.

What all these saviors of the people haven't caught on to yet, is their UNPRESENTED liability to corporation who shoved the checks under the door.

On Zerohedge we have all read how the corporation own government, the FED, Timmy etc.  But, the real hidden meaning to all this is that now, thanks to our Supreme Court, corporations can elect congressmen, be it state or federal, to wage WAR on their competitors.    Think about what that means,  take the oil companies...they can now use full force to defeat any green movement by LAW.  Could Version get a law through that makes CDMA the only approved cell phone transmission standard?  How about a law that makes any school not offering Coke vending machines in schools ineligible.  How about FOX and the Wall Street Journal the only media that has access to government information for distribution.   How about patent and copywrite changes that make it possible for a company to userp inventions in the "name of GDP prosperty and the national good".

Not possible you say...stay tuned, corporations are just learning to walk.

Think I am kidding?

SRV - ES339's picture

... Guillotines for $100 Turd!

sweet ebony diamond's picture

I think we are not giving Obama enough credit.

He put Geithner in that place in order to take the focus off of him.


Ned Zeppelin's picture

Our Janitorial President had nothing to do with the decision about Geithner in the Treasury post.  The immediately preceding cabal had to ensure one of its own was in  in that post so they decided to stick Dumbass Timmah in there.  Obama was never asked, since under his employment contract  - same as his predecessor Bush - he had no right to appoint anyone other than Undersecretary to Excremental Affairs. 

Cleanup in Aisle 4, Mr. President. Bring the bucket. 

Anybody else notice the secret, unscheduled visit to China by Mr. Dumbass yesterday to go kiss some Chinese ass, in advance of the unveiling of QE 2.0. 

Pick me up some dim sum, dickweed. 


LongSoupLine's picture

Give Barofsky a bonus.  Give Geithner the big bone.

eatthebanksters's picture

too bad Timmy and the big "O' are double dutch rudder buddies...O will never let go!

jesus_quintana's picture

POW! Right in the kisser.

Mad Max's picture

Newsflash: Neil Barofsky found dead of apparent heart attack / drowning / self-inflicted papercuts.  Foul play is not suspected.

liberal sodomy's picture

small aircraft malfunction/shot from behind with rat pellet gun.

Problem Is's picture

Heart attack while drowning in hot tub, bitchez...

Waterfallsparkles's picture

Yes, Homeowners were given Modifications which most faithfully paid every month with the hope of keeping their homes.  Then after 3 to 6 months they were told they no longer qualify and have to come up the the total amount due or the Bank would forclose ASAP.  Once in Forbearance the Foreclosure process is excellerated.  To the Banks advantage.

It was like the Banks were renting to the people until they decided the time was right to Foreclose and put the house on the Market.

If the people were paying on time with the Modification why wip the rug out from under them to sell the house to someone else for less?

NumberNone's picture

But you will be happy to know that the banks did collect their HAMP $1,500 in up front payments from taxpayer dollars before kicking the homeowners to the curb.  

NOTW777's picture

when do they cancel the summer of recovery

TuesdayBen's picture

Obama changes the vision to: One-thousand Points of Fright.