Friday Links: Under the TARP. WaPo Results, Shadow Space

The Wall Street Journal does some solid reporting on the machinations behind the TARP exits.

This is interesting:

Some Citigroup executives blame the Treasury for the flop, and say the government shouldn’t be surprised by the weak performance, say people close to the bank. Vice Chairman Ned Kelly on Monday evening placed a phone call to a top Treasury aide, irate that the government was letting Wells Fargo launch a simultaneous stock sale that could siphon off demand for Citi shares, according to people familiar with the call.

But this is important:

Bank regulators at the Federal Reserve and Federal Deposit Insurance Corp., meanwhile, have disagreed with other government officials about banks’ plans to repay government funds, and have privately complained that Treasury officials pushed them to allow banks to quickly leave TARP, according to people familiar with the matter.

Political interference?

The Washington Post gets some results for playing up the news others buried about the windfall Citigroup was due to get from the Treasury.

A House subcommittee will investigate why Treasury gave Citi a multi-billion-dollar tax break as part of its plan to pay back its TARP bailout.

“This committee is not going to rest until we’ve examined this last deal threadbare, until we have spoken to every individual associated with it, examined every communication related to it, with every person that may have had an interest in it, or who may have had some kind of a channel of influence,” (Rep. Dennis) Kucinich said.

The Los Angeles Times looks at so-called shadow inventory in the housing market. In real estate, shadow inventory is a term referring to property that’s not on the market and doesn’t show up in vacancy and rent statistics, but will either be put on the market soon or when the owner starts seeing something of a recovery.

The LAT reports that the shadow inventory is a humongous 1.7 million homes, up 55 percent from a year ago. That’s 3.3 months worth of shadow supply alone for the entire housing market at current trends.

Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate, laid out a troubling scenario that could play out if shadow properties do hit the market early next year: a contagion effect in which waves of foreclosures beget more, taking down the values of entire neighborhoods. Concern over such an outcome could cause sellers and lenders to act more cautiously, slowing the pace at which they take back troubled properties, he said.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.