[tomder55]

So who benefits from the plan the Treasury initiated that would spend $40 billion tax payer dollars to purchase toxic (ooops I mean "legacy")assets from zombie banks in cooperation with private partners ( PPIP... Public-Private Investment Program)?

Neal Barofsky, the special inspector general for the banking rescue program, says the program can wind up enriching the people who put it into effect.

controversial $40-billion government program to buy toxic securities from ailing banks has a flaw that law enforcement and financial experts say could allow traders to illegally profit from inside information. … The danger is that traders in the government program could wield enormous influence in the market — and there are no explicit restrictions on how they could use that influence to profit inside deals of their own.
For example, a trader could privately buy up groups of toxic mortgages on the cheap then later drive up the price by purchasing similar mortgages using government money. The practice, known as “front running,” could be technically illegal, but the firms are not barred from coming into the program with such securities and then trading them, Barofsky said.

Loophole in government program to buy toxic securities could cost taxpayers -- latimes.com

Of course the Turbotaxers at Treasury assure us that their vigilance will prevent any such activity . But that doesn't reassure Barofsky .

The Treasury cannot possibly match wits with the innovation and aggressiveness of Wall Street … If you give them a set of rules and there are technicalities and legal loopholes and things we haven't thought of, they are going to find that out, not because they are bad, but because that is what they are supposed to do. They are supposed to seek out profits at all costs.”

The cool thing for them is the risks they take will not be with investors money... it will be with ours. And last month Neal Barofsky predicted that the total bill to the taxpayers could be $23.7 trillion.
Neil Barofsky Says It's Possible Govt. Could Spend $23.7 Trillion to Fix Financial System - ABC News

These are inconvenient truths that the President and Turbotax Timmy don't want exposed . Barofsky has been acting the part of whistle-blower here and they are not pleased. Best guess is that this unresolved issue is fly in the ointment to their narrative that the recession is over.

Barofsky told us that the Treasury Department “is not being transparent with respect to the TARP,” the $700 billion in funds (and more) the government is using as loans and bailouts to help stabilize the financial markets. “They've failed to adopt some very basic recommendations we've had toward transparency,” he said.

Podcast Interview with Inspector General for TARP: Treasury Department Is Not Being Transparent - Political Punch

The issue of transparency is at the core of the conflict between Barofsky and the administration. As Glenn Greenwald at Salon puts it :

A career prosecutor, Barofsky is a life-long Democrat who donated money to Obama's presidential campaign. But ever since he was appointed to head the oversight office created by Congress when it enacted TARP -- an office designed to ensure transparency and accountability at the Treasury Department and in the banking industry -- he has repeatedly clashed with Obama's Treasury officials over their lack of transparency in how the trillions of dollars in TARP-related funds are being sent to and used by the banking industry...

... the Obama administration is now attempting to induce the Justice Department to issue a ruling that Barofsky's office is not independent at all -- but rather, is subject to, and under the supervision of, the authority of Treasury Secretary Tim Geithner. By design, such a ruling would completely gut Barofsky's ability to compel transparency and exercise real oversight over how Treasury is administering TARP, since it would make him subordinate to one of the very officials whose actions Congress wanted him to oversee: the Treasury Secretary's. Barofsky has, quite rightly, protested the administration's efforts to destroy his independence, and has done so with increasing assertiveness as the administration's war on his oversight activities has increased. Why would an administration vowing a New Era of Transparency wage war on a watchdog whose only mission is to ensure transparency and accountability in these massive financial programs?

http://www.salon.com/opinion/greenwa...sky/index.html

[speechlesstx]

Now why am I not surprised the most transparent, most ethical administration ever is trying to silence another IG? I think it's about time for Congress to back off their witch hunt on the Bush administration attorney firings and focus on the present administration's war on independent watch dogs doing their jobs.

Best guess is that this unresolved issue is fly in the ointment to their narrative that the recession is over.

That was a short-lived recovery. Darn it, reality just keeps getting in Obama's way.