4 Years After TARP - Winners, Losers, Bubbles, And Troubles

Tyler Durden's picture

Four years ago today, the Troubled Asset Relief Program was signed into law. We thought it timely to take stock of different asset price levels with respect to that magnificent day in the history of our country as well as how a broad cross-section of global asset markets have performed relative to their pre-crisis peaks. Of the major US banks, Wells Fargo has done the best (-2.3%) while BofA and Citi are worst (down ~80%). As Goldman notes, two features stand out when we look at the broad markets: asset markets that have outperformed and are closer to pre-crisis peaks are either ‘defensive’ in some way, or have benefited inadvertently from the ‘Great Easing’ in response to the crisis. From precious metals and Swedish and Canadian house prices at the top to European bank stocks and US Growth at the bottom; 'hard assets' and 'defensives' combined with central bank yield compression has, as we would expect, dominated performance.

 

US major financials...since TARP (10/3/08)

 

Cross-asset-class retracement of pre-crisis peak...

 

and drilling down...

Equities - DM Defensive and Smaller EMs have surpassed pre-crisis peaks, and Majors nearing those peaks...

 

Bonds & FX - well above their pre-crisis peaks...

 

In the case of some of these nominal recoveries, it's as if the crisis had never happened - just how the central planners had 'planned' it - though the evidence of newly forming bubbles is clear.

 

Source: Goldman Sachs