A four-person oversight panel for the Treasury's $700 billion bailout released a bewildered preliminary report this morning looking into how Treasury is spending its billions of dollars of taxpayer money.

U.S. stocks have declined 40 percent this year, 12 of the nation's largest financial institutions are teetering on the brink of bankruptcy, and 171 banks are on the Treasury's "problem list." Since Congress approved the bailout in October, the Treasury has allocated some $335 billion, but some of the most fundamental questions about where that money went remain unanswered.

"It is unclear" the report -- written by a panel led by Harvard Law professor and bankruptcy expert Elizabeth Warren -- says at one point, and it continues that way for some time, wondering "What is Treasury's Strategy?" "Is the Strategy Working?" What Have Financial Institutions Done with the Taxpayers' Money?" Or as Rep. Paul Kanjorski (D-PA) put it at a hearing of the House Financial Services Committee this morning: "We're like mad scientists in an economic laboratory trying to make the right potion to solve this problem."

The most strongly worded section appears on page 20, when the panel charges Treasury with administering "the TARP program without seeking to monitor the use of funds provided to specific financial institutions." It adds: "Treasury cannot simply trust that the financial institutions will act in the desired ways; it must verify."

The panel also raises questions about how Treasury is deciding which institutions get money.

Critics have repeatedly wondered how much power the Treasury's oversight mechanisms actually have -- and the report's inconclusiveness suggests that it's not sure either.

Take this excerpt, in which the panel says it will develop standards to measure the program's success, a request also put forward in the Government Accountability Office report from last week.

The Oversight panel intends over time to make its own assessment of the effectiveness of the TARP program in achieving the objectives set forth by Congress. The Oversight Panel would be greatly assisted in its effort if Treasury did the same.

Let's hope the next reports from the panel, due out Jan. 10 and 20, contain more teeth. In the meantime we await the new website for the congressional oversight panel (or in a moment of wishful thinking, COP for short) with baited breath.