Some good news_US makes a profit on TARP fund

[Thump553]

Remember TARP (Troubled Asset Relief Program)? The program that had Republicans in fits about government socialism, runaway spending, etc. and pretty much jumpstarted the whole tea party movement? Remember how it was going to bankrupt the US, that you better buy gold now and we will soon be reporting to our Chinese overlords? The program widely protrayed as a boondoogle and fiasco that probably single-handedly had the most to do with the GOP retaking the House in 2010?

It was reported today that the federal government has to date made a PROFIT on TARP to the tune of $6,000,000, and that profit is projected to grow to $20,000,000.

Sure was a dumb idea, huh? Even if it did save the economy from melting down, damn Obama and those Democrats for proving the government can do something right.

Stay tuned for Faux News' extensive coverage of this (yeah, right).

Source: http://www.housingwire.com/2011/03/30/tarp-in-the-black-turns-a-6-billion-profit

 

[sunzt]

Remember TARP (Troubled Asset Relief Program)? The program that had Republicans in fits about government socialism, runaway spending, etc. and pretty much jumpstarted the whole tea party movement? Remember how it was going to bankrupt the US, that you better buy gold now and we will soon be reporting to our Chinese overlords? The program widely protrayed as a boondoogle and fiasco that probably single-handedly had the most to do with the GOP retaking the House in 2010?

It was reported today that the federal government has to date made a PROFIT on TARP to the tune of $6,000,000, and that profit is projected to grow to $20,000,000.

Sure was a dumb idea, huh? Even if it did save the economy from melting down, damn Obama and those Democrats for proving the government can do something right.

Stay tuned for Faux News' extensive coverage of this (yeah, right).

Source: http://www.housingwire.com/2011/03/30/tarp-in-the-black-turns-a-6-billion-profit

So does this include ALL the TARPs and TARP like programs? I've read somewhere that TARP, without saying what was included, would profit, but overall the taxpayers lose around 10B bailing out banks and autos, which isn't too bad considering we put almost a trillion (if not more) into bailing everyone out.

 

[Fear No Evil]

Trillions in debt for 6 billion in profit (Might want to check your zeros), sounds like math I can support!

 

[werepossum]

Um, TARP was Bush's baby, not Obama's. It was passed in 2008. Republicans did complain about Obama using it to take over and run companies, though. Still, it's good news.

 

[Schadenfroh]

So, +1 for the Bush Admin, 0 for Tea Party?

 

[Doc Savage Fan]

TARP was a necessary evil to prevent imminent economic collapse...glad to hear this news. Looks like Bush did at least one thing right.

 

[werepossum]

So, +1 for the Bush Admin, 0 for Tea Party?

Probably +1 for both Bush and Obama, since the latter administered more of it. I didn't agree philosophically with some of his decisions, but he didn't screw it up. 0 for Tea Party definitely, since they had nothing to do with it and opposed it.

One scary thing though; the original intention of TARP was to buy up and dispose of the toxic assets. Obama did not do this (which could be because the toxic assets were far too extensive to buy up, or it could be because of Obama's philosophy) so those toxic assets are mostly still toxic. Hopefully the economy will remain on track and those assets will gradually detoxify or at least be swamped by good assets.

 

[her209]

Cue John Bohner crying on the House floor pleading for his Republican colleagues to vote for TARP.

 

[bfdd]

uh... so the fuck what? we're still up to our eyes in debt. this does NOTHING to fix any problem we actually had, it just propped up banks and insurance companies so they can keep doing what they've been doing. should have let it all burn imo.

 

[Patranus]

Ya, so the deficit for GWB last year in office is only 400 billion now that TART has been paid back with interest.

What is it 2 years later under Obama?

1.4 trillion you say?

 

[werepossum]

Ya, so the deficit for GWB last year in office is only 400 billion now that TART has been paid back with interest.

What is it 2 years later under Obama?

1.4 trillion you say?

We're talking about TARP; TART was a project under Clinton.

 

[Doc Savage Fan]

uh... so the fuck what? we're still up to our eyes in debt. this does NOTHING to fix any problem we actually had, it just propped up banks and insurance companies so they can keep doing what they've been doing. should have let it all burn imo.

If we didn't do TARP it would have been 10 times worse than what actually happened. I personally hated having to do it as we should never have been in these situations in the first place...but bottom line, our governance failed us miserably.

 

[IceBergSLiM]

How is this info any way reliable when fed refuses to identify who received the trillions of dollars in bailout funds?

Are these people brokering a deal for the brooklyn bridge too?

 

[werepossum]

How is this info any way reliable when fed refuses to identify who received the trillions of dollars in bailout funds?

Are these people brokering a deal for the brooklyn bridge too?

Good point.

 

[Craig234]

The problem with TARP isn't that it didn't actually help prevent a meltdown, or that the money was all lost.

The problem was the situation that led to TARP being needed - an out of control Wall Street raping the nation of its fortune and so powerful that it could use the public's government and treasury to let itself make those fortunes by betting recklessly on huge leverage while having an unofficial bailout guarantee.

The problem included all the increases in costs to the rest of the country for things to pay for finance to take 40% of the profits of the entire economy.

The problem included not fixing any of the problems, almost, with the industry when bailing them out, allowing the industry itself to allocate the bailouts.

Leading to things like highly speculative crap 'securities' being bought out at 100% of face value, at ensuring companies like Goldman Sachs - who was the trigger for the crisis in the first place, calling in all of its loans while every other institution was willing to cooperate with a plan to avoid a crash - had their exposure bailed out most.

Too big to fail - i.e., big enough to blackmail and dominate the government - has gotten *worse*, with the wrongdoing corporations bigger than before.

 

[werepossum]

The problem with TARP isn't that it didn't actually help prevent a meltdown, or that the money was all lost.

The problem was the situation that led to TARP being needed - an out of control Wall Street raping the nation of its fortune and so powerful that it could use the public's government and treasury to let itself make those fortunes by betting recklessly on huge leverage while having an unofficial bailout guarantee.

The problem included all the increases in costs to the rest of the country for things to pay for finance to take 40% of the profits of the entire economy.

The problem included not fixing any of the problems, almost, with the industry when bailing them out, allowing the industry itself to allocate the bailouts.

Leading to things like highly speculative crap 'securities' being bought out at 100% of face value, at ensuring companies like Goldman Sachs - who was the trigger for the crisis in the first place, calling in all of its loans while every other institution was willing to cooperate with a plan to avoid a crash - had their exposure bailed out most.

Too big to fail - i.e., big enough to blackmail and dominate the government - has gotten *worse*, with the wrongdoing corporations bigger than before.

This is one of the rare occasions when I find myself agreeing with much of what you say. Securitized crap should never have been bought up at 100%; too big to fail does not mean too big to miss our quarterly bonuses, and if structured bankruptcies were required to stop those bonuses, so be it. Your department didn't lose money? Tough shit, neither did most of the companies and individuals whose taxes paid to keep YOUR company afloat so that you'd have a job. And any company truly too big to fail should have been busted up into smaller components that aren't too big to fail as a condition of the bail-out. Most of the companies that were judged too big to fail are indeed even bigger now, and trained to the concept of your risk, my profit.

I think TARP was necessary and successful, but also very badly structured and administered.

 

[bfdd]

If we didn't do TARP it would have been 10 times worse than what actually happened. I personally hated having to do it as we should never have been in these situations in the first place...but bottom line, our governance failed us miserably.

It didn't do anything for the long term. It was a short term feel good shit that really did nothing but to prop back up the failed shit. Like every other bullshit we added to our debt as a form of bail out. The death spiral is inevitable, wasting mine and everyone elses time because they don't want to lose wealth/power is bullshit.

 

[Fern]

How is this info any way reliable when fed refuses to identify who received the trillions of dollars in bailout funds?

Are these people brokering a deal for the brooklyn bridge too?

I'm gonna go with this^

We've heard before about this or that turning a profit only to find out it wasn't true.

And if any of our gov institutions (including Fanny, Freddie etc) have bought CDO's (toxic assets) from these banks, there damn sure isn't any profit. Oh, the banks can use the money they received from the sale of the toxic assets to hand back over to the gov, but that 'loss' is now sitting on our books as a purchased toxic asset. Just creative book keeping.

Fern

 

[JeffreyLebowski]

The problem with TARP isn't that it didn't actually help prevent a meltdown, or that the money was all lost.

The problem was the situation that led to TARP being needed - an out of control Wall Street raping the nation of its fortune and so powerful that it could use the public's government and treasury to let itself make those fortunes by betting recklessly on huge leverage while having an unofficial bailout guarantee.

The problem included all the increases in costs to the rest of the country for things to pay for finance to take 40% of the profits of the entire economy.

The problem included not fixing any of the problems, almost, with the industry when bailing them out, allowing the industry itself to allocate the bailouts.

Leading to things like highly speculative crap 'securities' being bought out at 100% of face value, at ensuring companies like Goldman Sachs - who was the trigger for the crisis in the first place, calling in all of its loans while every other institution was willing to cooperate with a plan to avoid a crash - had their exposure bailed out most.

Too big to fail - i.e., big enough to blackmail and dominate the government - has gotten *worse*, with the wrongdoing corporations bigger than before.

I know it was slightly below average temp today, but did Hell freeze over, because I have to agree with you mostly. And I'm proud of you. You didn't mention politics once in your reply.

 

[LegendKiller]

I'm gonna go with this^

We've heard before about this or that turning a profit only to find out it wasn't true.

And if any of our gov institutions (including Fanny, Freddie etc) have bought CDO's (toxic assets) from these banks, there damn sure isn't any profit. Oh, the banks can use the money they received from the sale of the toxic assets to hand back over to the gov, but that 'loss' is now sitting on our books as a purchased toxic asset. Just creative book keeping.

Fern

CDOs aren't toxic by themselves. In fact, many CDOs are doing just fine. Just like securitization in general has gone a lot for borrowing, but it, like anything else, can be abused.

 

[Fern]

CDOs aren't toxic by themselves. In fact, many CDOs are doing just fine. Just like securitization in general has gone a lot for borrowing, but it, like anything else, can be abused.

I've never thought they were worthless.

But the question here would be, assuming we bought them from the banks, is how much did we pay? Given the housing market, forclosures and underperforming loans, surely some have lost value. And how you would identify which CDO's and how much value strikes me as damn near impossible.

----------------

But overall, this whole thing strikes me as Washington dumbfvker-y to the max. We make a new rule, at least partially motivated by the Enron situation, imposing mark-to-maket for these securtites, that makes little sense unless you're holding it as short-term investment. This predictably results in a cascading mark down/loss of value (paper anyway) resulting in a liquidity problem requiring Washinton to step in a buy them.

I forgotten so much about this; did they change the mark-to-market rule when tyhis was happening? If not, why not?

If not, they used a huge amount of cash and jumped through all types of hoops instead of just acknowleging the rule was faulty.

Fern

 

[manimal]

I just wish tarp had much bigger strings attached with specific ties to compensation and reorganization..


can we get Glass-Steagall back please...

 

[Fern]

I just wish tarp had much bigger strings attached with specific ties to compensation and reorganization..


can we get Glass-Steagall back please...

Speaking of Glass-Steagall, I thought this article was dang interesting (swiped from Zebo in another thread)

The irony of Bob Rubin: He’s an unapologetic arch-capitalist demagogue whose very career is proof that a free-market meritocracy is a myth. Much like Alan Greenspan, a staggeringly incompetent economic forecaster who was worshipped by four decades of politicians because he once dated Barbara Walters, Rubin has been held in awe by the American political elite for nearly 20 years despite having fucked up virtually every project he ever got his hands on. He went from running Goldman Sachs (1990-1992) to the Clinton White House (1993-1999) to Citigroup (1999-2009), leaving behind a trail of historic gaffes that somehow boosted his stature every step of the way.

As Treasury secretary under Clinton, Rubin was the driving force behind two monstrous deregulatory actions that would be primary causes of last year’s financial crisis: the repeal of the Glass-Steagall Act (passed specifically to legalize the Citigroup megamerger) and the deregulation of the derivatives market. Having set that time bomb, Rubin left government to join Citi, which promptly expressed its gratitude by giving him $126 million in compensation over the next eight years (they don’t call it bribery in this country when they give you the money post factum). After urging management to amp up its risky investments in toxic vehicles, a strategy that very nearly destroyed the company, Rubin blamed Citi’s board for his screw-ups and complained that he had been underpaid to boot. “I bet there’s not a single year where I couldn’t have gone somewhere else and made more,” he said.

There's more, lots more. Our government is pathetically disgusting.

Fern

 

[manimal]

Speaking of Glass-Steagall, I thought this article was dang interesting (swiped from Zebo in another thread)



There's more, lots more. Our government is pathetically disgusting.

Fern

I had visions of City being pulled apart like Ma bell after the burn down but alas money buys WAY too much influence...


I am still dumbfounded that the shadow markets are allowed to this day...