I have so many problems with the narrative that TARP and the bank bailouts in general were an unqualified success that I don’t know where to begin sometimes, but a few articles out today should provide a good place.

First, it’s clear that the Federal Reserve nursed banks back to health far more effectively and with far more resources than anything from TARP. TARP was the way that Congress could get implicated in the bailouts, so they wouldn’t have the ability to press the Federal Reserve over their trillions of lending. But the Fed didn’t just bestow this gift on banks that received TARP money; they became the central banker to the world by lending to multiple non-US banks. This wasn’t just a token amount of lending – more than HALF of the term auction facility, or TAF, the largest Fed emergency lending fund, went to foreign banks. And it went to healthy foreign banks with triple-A credit ratings, in addition to the sick ones. There was a procedure in TARP that everyone takes the money blind so the market cannot tell which banks are in trouble, but lending to banks with solid-gold credit ratings at ultra-cheap rates and accepting junk collateral in return? You might as well give the banks a machine to print money.

Ed Clark, TD chief executive, said that using Taf was logical even though his bank never had a liquidity problem. “That wasn’t how we made a lot of money. But you make a dollar here, you make a dollar there. What’s the spread you make on a billion dollars?” he said.

In the summer of 2008, TD was borrowing $1bn from TAF at rates of between 2 and 2.5 per cent. For that borrowing it used the lowest quality – and hence highest yielding – collateral acceptable to the Fed.

More than 80 per cent of its collateral had a triple B credit rating at a time when such bonds yielded about 7 per cent. TD could therefore have made a notional gross spread of about $4m a month during 2008.

Now, the purpose of TARP and these other lending programs were to nurse the banks back to solvency. Why, then, have so many of these banks failed anyway, or are on the verge of failure?

Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.

The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.

Seven bailed-out banks have already failed. Most of them, and the failing banks, only had access to TARP, and not the other emergency lending programs on which the biggest banks relied. TARP, this gentle salting of the banking sector, provided the illusion of help for those smaller banks, while they couldn’t compete with banks that became basically wards of the state (those banks have essentially repaid TARP with Federal Reserve money). So in response to extreme market concentration, the result of the TARP was more market concentration, as the smaller banks fell by the wayside.

Then you have another 100-plus deadbeat banks which are routinely missing TARP payments promised to the government. The failing banks and the deadbeat banks probably overlap a bit, but more banks are simply skipping out on the payments. These are also community banks which can’t really compete.

The picture you see, then, of the government’s extraordinary support of the financial sector, is one of consolidation. Crumbs were handed out to community banks who bore a major brunt, without complete responsibility, of the financial crisis, while the real money was reserved for the biggest banks, at home and abroad. The bailouts essentially inflated the too big to fail banks, allowing them to hold even greater dominion over the world. The problem with this scenario is that it still wasn’t enough to keep them solvent, as the financial crisis is basically not over.