Nomi Prins has little respect for Timid Tim calling the banks repayment of TARP funds a step in the right direction when the banks are simply using other funds they borrowed from the government to make the repayments:

Banks can also borrow cheaply if they have an FDIC guarantee—and then use that cheap money to do things like pay TARP back, which explains why their stocks have gone up. The government opened this door on October 14, 2008, with the FDIC’s Temporary Liquidity Guarantee Program. The idea was that it would prompt banks to start lending to their customers again. But that didn’t happen. Instead, cunning institutions used the new program to raise cheap capital for their own needs. By changing its status to a bank holding company, Goldman Sachs was able to secure $29 billion of that FDIC-backed debt; Morgan Stanley raised nearly $24 billion.

Considering the true size of the bailout, the continued loan deterioration, and the weakness in the overall economy and job market, the economic signs simply aren’t that positive. For Geithner to pretend that a few banks paying back federal money with other federal money is an encouraging sign is to miss all of them.

It’s a shame the American people don’t see through this sham.