The GAO released their TARP Report: June 2009 Status of Efforts to Address Transparency and Accountability Issues.

Some main points:

• $330B "dispersed"
• $69.2B repaid by end of month
• still buying preferred shares
• no disclosure from Treasury/Fed on criteria to purchase shares
• no disclosure from Treasury on warrant repurchase
• no disclosure on recapitalization on stress test results
• "difficulties" in measuring TARP effectiveness
• no set of determinate indicators to measure TARP impact

Most interesting is the criteria for those stress tests to determine additional needed capitalization. The unemployment rate, which many of us have shown, is much worst than forecast by the economists' consensus.

The required capital buffer was sized based on the more adverse scenario. While the forecast for the three economic indicators—GDP growth, unemployment rates, and home price changes—were considered quite severe at the time they were formulated in February, subsequent data indicated that the probability of the more adverse scenario was likely higher than previously thought, particularly with respect to the unemployment rate. According to Federal Reserve officials, house prices are at least as important as the unemployment rate in determining estimated losses at banks over the next 2 years because many of the estimated losses are related to real estate values.

Under the more adverse scenario of the stress tests the 19 banks were projected to lose $950 Billion dollars.