Friday, March 27, 2009

Fonden, TARP, what's the difference? 

Recently some people have been having an apoplectic fit because they don't know down to the last Bolivar how much money is in Venezuela's National Development Fund. Of course, if they paid any attention at all, even to the very media sources that absolutely detest Chavez, they would know that at year end 2008 there was about $6 billion dollars in it and that another $12 billion was deposited to it in January. So it has roughly $18 billion dollars less what has been spent in the past couple of months.

Unfortunately, that just isn't good enough for some very demanding types who insist that because they don't have audited financial reports delivered to their doorsteps on it every week it must be some big Madoff like ponzi scheme where the money simply doesn't exits.

And of course, even if it probably does exist this not knowing up to the minute balances on it is very opaque and, well, banana republicish.

That may be true and in fact only serves to feed my suspicion that the United States is rapidly moving into banana republic territory. I mean, its one thing to lose track of a fund with a few tens of billions in it but losing track of a fund that has $700 billion in it?!?!? It takes the expertise of the U.S. government to do that:

WASHINGTON -- The Treasury has tried to revamp its $700 billion financial-rescue program, promising "a new era of accountability, transparency and conditions." But the Treasury isn't answering a key question: How much is left in the rescue fund?

Based on Dow Jones Newswires' reporting and calculations, it appears that Treasury has, at most, $52.6 billion left in its rescue fund. That would mean about 92% is already committed. That assumes the Treasury spends $100 billion in TARP funds to rid bank balance sheets of toxic assets.

The Treasury has yet to provide an official accounting.

On Wednesday, Treasury Secretary Timothy Geithner twice was asked to specify how much remains in the Troubled Asset Relief Program. The question arose amid the series of new programs the Obama administration has announced in the past several weeks to boost ailing financial markets. In both instances, the secretary avoided a direct answer.

The first time came after Mr. Geithner delivered remarks to the Council on Foreign Relations Wednesday morning. The moderator asked the basic question: How much is left in TARP? Mr. Geithner's reply: "Very, very reasonable amounts of money -- significant enough money."

Mr. Geithner gave a similar response a couple of hours later in a CNBC television interview.

Then again, maybe we are all just angsting too much. I mean do we really need to know if it is $2 billion or $200 billion left in any of these funds as long as we know its a "very reasonable" amount? After all, as long as it is "significant enough" what else matters?


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