TARP Repayment; An Indicator of Higher Rates Coming

The Fed gave many banks the option to borrow some money (some were basically forced to take these funds called TARP (Troubled Asset Relief Program). This gave the Government an ownership/equity stake in these banks (Government owning bank = scary). Now, after "stress tests" on several banks to see if they can "survive" (liquidity, operations, assets, leverage, debt) many banks have been given the Green Light to "refund" their TARP money to the Government (and when I say Government, this is your Federal tax money at work). Several of the banks that have passed the stress test and applied to refund TARP include American Express, BB&T Corp, Cap One, US Bancorp, JPMorgan and Goldman-Sacks. Note that American Express wasn't even a bank prior to the offering of TARP money; they created the entity just to get TARP funds. Conversely, other banks ran and hid from TARP. So the repayment begins, meaning stronger banks are emerging. If they have money, you can bet that rate increases will be seen across the board in terms of increased deposit rates and HIGHER MORTGAGE RATES. This is a sign of things to come. If you're hoping for LOWER RATES, you ship is about to sail; Lock in now; I'll tell you how. Pat Townsley: 415-485-1776. www.PTRE.net