How TARP Paybacks Expose Weakest Banks

The government has finally acknowledged something it wanted to keep secret six months ago: Which banks are in the worst financial health.
It’s now obvious that Citigroup (C), GMAC, Bank of America (BAC) and perhaps a dozen other large banks are in rough shape, but when the Troubled Assets Relief Program went into effect last October, the idea was to mask problems at sick banks by flooding the whole financial system with liquidity. President Bush’s Treasury Secretary, Henry Paulson, famously imposed TARP bailout funds on big banks like Goldman Sachs (GS) and JPMorgan Chase (JPM), which took the money even though they said they didn’t need it.
Paulson was trying to prevent a repeat of the runs on Bear Stearns and Lehman Brothers that occurred when big, institutional clients, worried that those banks could fail, decided to pull their money out. All at once. Pumping some healthy banks with money, Paulson reasoned, would distract attention from the sickest banks, and buy time until the risk of panic receded. (learn more at)

"87 Percent of [Chinese] Respondents Believe China’s Dollar-Assets are Unsafe"

Remember how the Chinese laughed at Geithner when he said their American investments were safe? The laughter was not just the opinion of those sitting in the audience listening to Geithner's speech. One of China's official newspapers, The Global Times, reports that an online poll of Chinese citizens found that 87 percent of respondents believe China’s dollar-assets are unsafe.
The paper concluded, “Ordinary Chinese people are discontent with the declining value of China’s huge foreign exchange reserves denominated in U.S. dollars.”