Here’s an interesting new way to measure how much the government’s bailout is, or perhaps in this case isn’t, working:
The Ethisphere Institute, a non-partisan research think tank, has just set up an index to track the US Federal Government’s returns on its more than 400 investments through its Troubled Asset Recovery Program (TARP). The institute plans to put out weekly reports detailing the performance of the TARP investments at http://ethisphere.com/ethisphere-tarp-index-report/.
Last week’s returns weren’t pretty. While the benchmark Standard & Poor’s 500 index sagged 5%, the Ethisphere TARP Index plunged 44%. In other words, the government lost $86.5 billion of its original $195.5 billion investment, according to the institute’s calculations.
If investments made in the heat of the moment during the credit crisis in Bank of America, Citigroup, JP Morgan and Wells Fargo are excluded, the index fell about 29%, or $27.6 billion.
Interestingly, that’s because those banks weren’t last week’s worst performers: That dubious honor goes to US Bancorp for losing $3.7 billion in value and Huntington Banchshares, which tumbled 81.5%. SunTrust Banks also lost $3.6 billion, or 74.8% of its value.
Who did well? The government’s investment in Morgan Stanley increased 26.3%, or by $2.6 billion, while Central Valley Comunnity Bancorp gained 45.9%.