TARP is a Revolving Fund - Turds and T-Bones

TARP is a Revolving Fund.  That statement is not an opinion, guess, or anything that has some degree of accuracy because it is the way I think I see it.  It is a flat out undeniable, indisputable fact that you can take to the bank (maybe the wrong metaphor?  -- it used to mean something.)

Troubled Asset Relief Program (TARP) is a program that establishes the Tarp Revolving Fund.  That fund is a Treasury Fund. 

While it is out of date and poorly written it is still the best statement on TARP I could find which is a sad situation.  Wikipedia explains it.

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

That link explains this about TARP:

TARP will operate as a "revolving purchase facility". (Pathetic Euphemism)

A Revolving Fund by any other name is still a Revolving Fund! 

The TARP Revolving Fund buys and sells some thing.  The thing it buys and sells is a "Troubled Asset".   This is funny because what is bought must be sold to replenish the cash in the fund used to buy it.  That means for the fund to continue to operate as a revolving fund the total amount in dollars of purchases over time must equal the total amount of dollar sales.  Buying a turd and paying for it at its original price when it in the form of a T-Bone steak takes a shit load lot of polishing or hocus-pocus, flim-flam promotion to sell at the original T-Bone Steak price.

A Revolving Fund is a Working fund that funds the on hand inventory of what it is created to buy.  It is the money available to work with to make and inventory of things to buy and sell.  Normally, intelligent decision is used to select the things to buy and sell.  The simple decision is to buy what sells and the object of selling is at the bottom line have the dollar amount of total sales of things out of the Revolving Funded inventory made to be greater than the dollar amount of total purchases that bring things into the Inventory.  For a non-profit objective, all that is necessary is to break even.

TARP Program objective was to buy things from an owner that would not sell them on the market because they would have to sell at a great loss.  They could have sold them at a great loss but then they would be out of business.  The derivatives of the underlying assets could not be sold without a great loss either and because they could not be sold the insurance policies that promised to pay for any loss in value of the derivatives had to paid off.  The insurer did not have enough money to pay.

TARP Revolving Fund buys turds at their original T-Bone price.  Then it expects to sell what it bought when there is no market for turds priced as T-Bones to sell into.    The market has to be created.  Something, probably something more than polishing the turd or putting lip-stick on the pig has to be done to revalue the turd.  The Market of Buyers is sophisticated.  Otherwise the Revolving fund has to sell to unsophisticated buyers that don't see the difference between a T-Bone and a Turd in order to get back money into the Revolving Fund at least equal in the gross analysis to what it spent to but the turd in the first place.

Buying Turds and making money on selling them as T-Bone Steaks is an entrepreneurial fete worthy of Donald Trump.

How Does the TARP revolving fund do it?  That requires an analysis of what the Revolving Fund bought and what it sold.  The whole thing has a stink to it.  One of the ways to sell Turds at T-Bone prices is Fraud.  Might there be some fraud involved.  That entails value added by illegitimate means to make something out of what it is not.  Perhaps there is a legitimate way to give it true value added and sell it in an honest deal?

Either way, how was it done?  If there is fraud then is the fraud linked to what was sold or is the fraud linked to the accounting manipulation of what was sold when it was actually sold at the commodity price of market for turds but by accounting chicanery the cooked books make it look like it turds were sold for T-Bone prices.

If so, somebody is going to ultimately eat shit.

or

The shit will hit the fan and splatter all over those that sold it as T-Bones.

Never underestimate the American Public.  That is a two edge sword statement.

This entry is in the Looking at the Swamp category and it has a peculiar stink to it.

Hey, it is not a Swamp, Rube, it is Beach Front Property!  That smell is the clean ocean air!  Oh, there is a mansion that goes along with the property too.  You get to see it after I sell you the property.

Trust me, you will love it!

By the way, my name is "The Donald".

Later I found this to add.  Niel Barofsky said it here about TARP as a revolving fund:

How does Treasury receive the paid-back TARP funds and where do they actually go when they’re paid back? 
When principal is retained it goes back to pay down the debt temporarily. But they view it as a revolving fund so principal can be reused. So, for example, when Goldman paid back the $10 billion, physically the money goes back to general funds but Treasury views that they can reuse or relend that money in TARP up to the $700 billion cap. Interest payments, dividend payments, profits from the sale of warrants – all that isn’t reusable. That just goes straight into Treasury to pay that debt.