NPR logo Morning Report: TARP Costs Down; Dubai Stocks Fall Again

Morning Report: TARP Costs Down; Dubai Stocks Fall Again

The Obama administration expects the long term cost of the Troubled Asset Relief Program to be $200 billion less than projected, a development that could reduce the size of the budget deficit and open up funds for a new jobs program, a Treasury Department report concluded Monday.

The Treasury now estimates that over the next the next decade TARP will cost $141 billion at most, down from the $341 billion the White House projected in August. The reduction stems in large part because the larger figure anticipated more financial troubles requiring intervention.

Overall, the Treasury Department now expects to recover all but $42 billion of the $370 billion it has lent to ailing companies since the crisis began last year, with the portion lent to banks actually showing a slight profit, according to the Treasury report.

Meanwhile, the stock market in Dubai fell sharply on Monday, led by a 10% drop in shares of Emaar, the property developer behind Burj Dubai, the world's tallest tower, which is scheduled to open next month.

The DFM index, the benchmark for the Dubai Financial Market, closed 5.84% lower at 1,744.83.

Markets in the Arab states have been roiled in the past two weeks since Dubai World, the emirate-controlled conglomerate, said it was seeking a six-month standstill on payments under $60 billion of debt. The company is currently trying to restructure $26 billion of debt.

On Monday, Dubai World executives said the company might sell some of its foreign assets to meet its obligations, but that the Dubai government won't sell any assets for that purpose.

Other Middle-East investors reported much better financial news over the weekend. On Sunday, Kuwait's sovereign wealth fund said it has sold a $4.1 billion stake in Citigroup.

The Kuwait Investment Authority said it made a profit of $1.1 billion from the sale, or a 36.7% return on the investment, the firm said.

The KIA invested $3 billion in Citibank and another $2 billion in Merrill Lynch at the beginning of 2008. The fund's investment the banks was criticized domestically as some U.S. lawmakers worried about such a large Kuwaiti investment in American banks.