Did TARP 1.0 Get it Right?

Some good comments from Robert Baird (and follow the links to Yves Smith) regarding the emerging view that TARP 1.0 was the right solution.

For those (like Joe Nocera, NYT) "First Bailout Formula Had It Right" who believe that the intent of the original TARP program was nationalization of bad banks -- or at least bad bank loans -- I say let's deconstruct the words. Someone spent more than a few minutes picking "TARP" among the various pronounceable acronyms that could've been created so there must be some subtext worth examining.

"TARP" stands for "Troubled Asset Relief Program". At the time, these assets were thought to be merely "troubled". Not distressed, not underwater; just a little anxious or, like teenage boys, a bit undisciplined and prone to mischief. The thought was that the government could take them into its custody, perhaps let them spend some time at the spa or in rehab and maybe in a few years they would be restored to perfect health with nary a care in the world.

Now, the growing consensus is that maybe some of these assets are more than a little "troubled" and let's face it, "impaired".

If, as widely expected, the Obama administration comes out with a new program next week, they'll need a new acronym. I suggest "Commercial bank Recapitalization and Assistance Program" or CRAP. The assets acquired by the taxpayers will be known, quite sensibly, as the CRAP assets. That should be easy to remember.


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BTW, Can anyone shed some light on "TARP"?

Was it meant to suggest a tarpaulin, perhaps in the sense of a being spread UNDER the assets as a sort of safety net? Dictionary.com defines "tarpaulin" as "a protective covering of canvas or other material waterproofed with tar, paint, or wax", which reminds me more of the sheet they pull OVER dead bodies at a crime scene.

Maybe the acronym was more apt than its creators intended.

(Comments on) What the Facebook is Going On Here?

Hilarious article on Facebook by Peter Madden over at AdAge (subscription may be required.)

"What the Facebook is Going on Here? - AdAge.com"

Is there really a fan page for Lysol?

Mostly, I'm surprised by the "Peter, you just don't get it" comments in the subsequent thread. I think Peter gets it perfectly.

Yes, Facebook has proven to be a mobilizing force for good causes. And, holy cow, consumers are out there providing all sorts of information about themselves that may *someday* be useful for marketing purposes. (As an aside, I find the current advertising on Facebook amusing. I am listed as having an MBA degree, yet one-third of the advertising presented to me seems predicated on the notion that I might want to get a second one... I click on them to ensure that stupidity is penalized. Another ad that appears incessantly is an invitation to buy a Spinal Tap-themed tee shirt since that is listed among my favorite movies. Note to 6dollarshirts.com: Thanks, but I have plenty of tee shirts already.)

Facebook, like any form of social interaction, faces the risk that the overall tone of the conversation is dominated by the lowest form of discourse. A steady news feed from your 600 closest "friends" is pretty random and (I imagine) quickly becomes tiresome. An endless stream of requests to join various noble causes is about as welcome as a telephone solicitor at dinner-time. And a conversation consisting of "Peter is getting on a plane in Las Vegas... Brittany is having french toast for breakfast... Gary has the sniffles" is a bore in ANY medium.

We need a neologism for this latter phenomenon. I submit "blackberrhea" but I'm sure the creatives who read AdAge can do better.