Crisis A-Z

TARP – Troubled Asset Relief Program:
Established under the EESA aka Emergency Economic Stabilization Act with the specific goal of stabilizing the United States financial system and preventing a systemic collapse. The U.S. Treasury has established several programs under the TARP to stabilize the financial system and has now created the Financial Stability Program will additional measures to stabilize the financial system, restoring the flow of credit to consumers and businesses, and tackle the foreclosure crisis to keep millions of Americans in their homes.

The Special Inspector General for the Troubled Asset Relief Program ("SIGTARP") Neil M. Barofsky, was confirmed by the Senate on December 8, 2008, and was sworn into office on December 15, 2008.

Another component of the EESA is the Capital Purchase Program aka CPP, a voluntary program in which the U.S. Government, through the Department of Treasury, invests in preferred equity securities issued by qualified financial institutions. Participation is reserved for viable institutions that are recommended by their federal banking regulator. Treasury's intent is to provide immediate capital to stabilize the financial and banking system, and to support the economy.

The Emergency Economic Stabilization Act of 2008 EESA was signed into law on October 3, 2008.

Tech Stocks:
Stock in a technology sector, such as software, semiconductors, networking, or biotechnology; anything from semiconductor chipmakers like Intel to online or software companies such as Microsoft.

Thain, John:
Merrill Lynch & Co's last Chairman and Chief Executive Officer before the firm merged with Bank of America on September 15, 2008. Before his tenure at Merrill Lynch, Thain had been the Chief Executive Officer of the New York Stock Exchange since January, 2004. He assumed his post at Merrill Lynch on December, 2007.

Thain was born on May 26, 1955 in Antioch, Illinois. He attended MIT and earned a bachelor's degree in electrical engineering in 1977. He went on to continue his studies at Harvard University, where he received an MBA in 1979. From there, he has had an impressive career in Wall Street, including prominent positions at Goldman Sachs, where he was CFO since 1994 and went on to become President and COO until January 2004. After his career at Goldman Sachs, he was the CEO of the NYSE until December 2007, when he became the CEO of Merrill Lynch.

After the merger with Bank of America, Thain was to become President of Global Banking at the new venue. However, he resigned on January 22, 2009 after Merrill Lynch reported significant losses.

Thain lives with his wife, Carmen, and they have two daughters and a son.

Thompson, Ken:
Former CEO, President, and Chairman of Wachovia. He first assumed the position in 2000, when the bank was known as First Union Corporation. He lasted in the position until June 2, 2008 after he was pushed out from the company as the U.S housing market's situation deteriorated. He had been with the company for 32 years.

Thompson was born in Clarksville, Virginal on November 25, 1950 and moved early on to Rocky Mount, North Carolina. He earned a degree in American Studies from the University of North Carolina at Chapel Hill in 1973 and then obtained a Masters in Business Administration degree from Wake Forest University in 1975.

Thompson and his wife, Kathylee, have three children.

Three C's, aka Credit, Collateral, Character:
Three things creditors examine to determine creditworthiness: credit, collateral and character.

Credit is a borrower's ability to repay based on income and current debt. Lenders want to see current income that is high enough to cover current debts with money left over. They want to know that a consumer earns more than they owe, known as positive net worth.

Collateral can be property or other valuables used as security to guarantee the repayment of a loan, something of value that could be sold in case the consumer defaults on the loan.

Character is defined as the responsible handling of past debt as well as stability in keeping a job and a residence, typically at least a year, the longer the better, without foreclosure or bankruptcy.

Tillman, Vickie:
Executive Vice President of Standard & Poor's, a position she's had since 1999. Before becoming EVP, Tillman was the executive managing director of Standard & Poor's Structured Finance Ratings. She has been with the firm since 1977.

Tillman attended the University of Pittsburgh and earned a bachelor's degree in 1973. She then obtained an MPA from the University of Pittsburgh's Graduate School of Public and International Affairs in 1976. A year later she became a municipal analyst at Standard & Poor's. She held different important managerial positions at the company until she was appointed executive managing director in 1994, a position she held until her appointment as EVP in 1999.

Toxic Assets:
Troubled loans and securities at the heart of the financial crisis, which the U.S. Treasury planned to remove from the nation's bankrolls through a $1 trillion public-private investment of funds from the Troubled Asset Relief Program. Banks lent money to consumers who couldn't pay them back. That mortgage is one example of a "toxic asset".

Treasury Department:
On June 22, 1775 -- only a few days after the Battle of Bunker Hill, Congress issued $2 million in bills. On July 29, 1775, the Second Continental Congress assigned the responsibility for the administration of the revolutionary government's finances to Joint Continental Treasurers, George Clymer and Michael Hillegas. The Congress stipulated that each of the colonies contribute to the Continental government's funds.

To ensure proper and efficient handling of the growing national debt in the face of weak economic and political ties between the colonies, the Congress, on February 17, 1776, designated a committee of five to superintend the Treasury, settle the accounts, and report periodically to the Congress. With the signing of the Declaration of Independence on July 4, 1776, the new-born republic as a sovereign nation was able to secure loans from abroad.

Despite the infusion of foreign and domestic loans to pay for a war of independence, the United Colonies were unable to establish a well-organized agency for financial administration. Michael Hillegas was first called Treasurer of the United States on May 14, 1777.

Alexander Hamilton took the oath of office as the first Secretary of the Treasury on September 11, 1789. Hamilton had served as George Washington's aide-de-camp during the Revolution, and was of great importance in the ratification of the Constitution. Because of his financial and managerial acumen, Hamilton was a logical choice for solving the problem of the new nation's heavy war debt.

Hamilton's first official act was to submit a report to Congress in which he laid the foundation for the nation's financial health. To the surprise of many legislators, he insisted upon federal assumption and dollar-for-dollar repayment of the country's war debt of $75 million in order to revitalize the public credit. Hamilton foresaw the development of industry and trade in the United States, and suggested that government revenues be based upon customs duties. His sound financial policies also inspired investment in the Bank of the United States, which acted as the government's fiscal agent.

The 75th Secretary of the Treasury, Timothy Geithner, has the unenviable job of helping President Barack Obama tamp down expectations of a quick recovery from the worst financial crisis so far this century.