This morning we began wondering how long it would take for JP Morgan Chase to require another bailout. Now we know: right now. It’s not a Citi sized whopper, but the bank is planning to tap into the FDIC’s Temporary Liquidity Guarantee Program to raise debt, according to reports.
What’s the heck is the TLGP? How do you pronounce it? Till-Gup?
The Tillgup is a huge government bailout of our banking industry, albeit one that has gotten very little attention. Under the Tillgup, the Federal Deposit Insurance Corp will guarantee new debt issued by a bank. JP Morgan plans to to issue three-year debt guaranteed under the program, Thomson Reuters’ IFR reported today.
JP Morgan will be the second Tillguppie. Yesterday Goldman Sachs became the first bank to take advantage of the program. It is offering $2 billion of new debt that is expected to price today.
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