Eyebrows were raised in June when ABC News wrote about an inquiry by the Treasury Department to the Department of Justice as to whether the Special Inspector General for TARP (SIGTARP) was under the thumb of supervised and directed by the Treasury Secretary.

It looks like government-sponsored Citigroup has ambled back to the racetrack, cash in hand, ready to put big bucks down on Long Nose in the third.

In a ploy to recapitalize Citigroup, Inc., the Department of Treasury converted last month a portion of its investment in the bank from preferred stock, which would have given Treasury an 8% return on its "investment" annually, to common stock (i.e. what is traded in the stock market), which guarantee nothing. So far, the gamble has paid off as Citi's shares have increased considerably in value since its purchase.

The Treasury Department released its June Monthly Bank Lending Survey, and the results are...mixed. Overall, outstanding loan balances for the 22 banks receiving TARP funds fell by 1 percent in June, but the new loan originations increased by 13 percent. Looking closer at the data reveals that outstanding loans to consumers fell by 1 percent, while new loans to consumers increased by 9.7 percent in the same period.