TARP funds are being repaid. The gov't is making a profit. Yes, I said profit.

[DealMonkey]

Ever since Team Bush announced the TARP program, there's been a gnashing of teeth about how many bazillions of dollars we're spending, and oh my gawd, how much debt we're getting into, and oh geeze, how we should let the financial system implode, great depression redux be damned.

But get this. The TARP funds are being repaid. AND, the gov't is making a tidy profit. The treasury has cleared $8 Billion in profit thus far.

So NOW what do you think of this program?

KAI RYSSDAL: Alisa mentioned that one of the drags on profits for Morgan Stanley was the cost of repaying TARP money. And it was, but there is more to it than just that. In addition to the billions in cash that Morgan and the other banks got and had to pay back, they also had to give the government stock warrants. Options, essentially, to buy company stock at a pre-determined price. Those warrant prices were way lower that what most bank shares are trading at now. Earlier today Goldman Sachs bought its warrants back from the Treasury Department. Cost 'em about a billion-and-a-half-dollars. For those of you keeping track at home, when you add up the interest on Goldman's $10 billion bailout, plus buying back the warrants, taxpayers got a 23 percent annualized rate of return. Marketplace's Steve Henn explains that presents Congress with an unexpected dilemma: What to do with the money.

STEVE HENN: OK, so not all of the Treasury's TARP investments are doing as well as Goldman Sachs but out of the banks that have paid us back, Treasury's already cleared close to $8 billion in profit.

JAMES CHESSEN: Taxpayers are getting a great return. It's over 12 percent.

James Chessen is the chief economist at the American Bankers Association. He admits that kind of return on investment might not hold up over the long haul but...

CHESSEN: This is a big success for the government.

Chessen says by passing the bailout last fall, Congress stabilized the markets and made some serious money doing it. But now politicians in Washington have a new problem. How should they spend their windfall?

http://marketplace.publicradio...eb/2009/07/22/pm-tarp/

Many big firms are exiting TARP and repaying their loans:

American Express received $3.39 billion from the Treasury Department under the program and paid back the government in June after it, along with other leading financial firms such as JPMorgan Chase (JPM, Fortune 500) and Goldman Sachs (GS, Fortune 500), was approved by regulators to exit TARP.

http://money.cnn.com/2009/07/2...postversion=2009072317

Hell, we, as in taxpayers, made a 23% annualized return on Goldman Sachs alone! Not bad, not bad at all. Stabilize the financial sector and make a profit while doing it. It's the American way!

 

[Hacp]

I'm guessing the preferred Citibank shares that were converted into common is considered profit also?

 

[charrison]

Will have to see what the final bill is.

My biggest problem with tarp is the with speed it was pushed though.

 

[DealMonkey]

Originally posted by: Hacp
I'm guessing the preferred Citibank shares that were converted into common is considered profit also?

It would be foolish NOT to convert your Citi preferred stock to common. Citigroup plans to cease paying dividends on the preferred, which also is expected to be delisted from the New York Stock Exchange. So, yeah, good luck with that.

 

[Engineer]

Originally posted by: charrison
Will have to see what the final bill is.

My biggest problem with all government legislation is the with speed it was pushed though.

Seems like when something needs to be done and done with thought, the above happens. TARP, Iraq War, Stimulus, Patriot Act, (Health Care???)...

 

[BoberFett]

GS is making record profits right now. How are the rest of the TARP banks doing? Until it all comes back in, there's no profit.

Edit: And does this mean now that Bush was right?

 

[Hacp]

Originally posted by: DealMonkey

Originally posted by: Hacp
I'm guessing the preferred Citibank shares that were converted into common is considered profit also?

It would be foolish NOT to convert your Citi preferred stock to common. Citigroup plans to cease paying dividends on the preferred, which also is expected to be delisted from the New York Stock Exchange. So, yeah, good luck with that.

If citi goes bankrupt, the taxpayer's common will be worthless.

 

[sandorski]

Originally posted by: charrison
Will have to see what the final bill is.

My biggest problem with tarp is the with speed it was pushed though.

Some things just need to get done, not tomorrow, not even today, but yesterday.

 

[sandorski]

Originally posted by: BoberFett
GS is making record profits right now. How are the rest of the TARP banks doing? Until it all comes back in, there's no profit.

Edit: And does this mean now that Bush was right?

Many of us thought he was on this issue.

 

[Chaotic42]

I'll wait until it's all over, but I'm skeptical about the whole thing. I've been wrong before though. What I would like though is for some of the people who were at the core of this thing to be punished.

For example, who said that banks could loan out that much money with so little cash in hand? Sounds like a prime candidate for some justice.

 

[EagleKeeper]

A taxpayer has to pay taxes on interest/profits.

So how does the taxes on the TARP funds profits get handled?

Do the profits get plowed back into the economy via stimulus or pork or used to reduce debt?

 

[Perknose]

Profitable enlightened socialism. Suck on it, caveman ideologues. Even if all we end up with is the interest as profit on most of the remainder, the real cost was in doing nothing, and even George Leroy Bush understood that.

 

[theeedude]

The only reason many of these banks are repaying these funds and making a "profit" is that the government bailed out AIG and absorbed those bank's counter party risks. So they are taking money from AIG, which is taking it from the government, and repaying it to the government.

 

[Phokus]

Originally posted by: Perknose
Profitable enlightened socialism. Suck on it, caveman ideologues. Even if all we end up with is the interest as profit on most of the remainder, the real cost was in doing nothing, and even George Leroy Bush understood that.

Oh you mean glenn beck and all the conservatives who were screaming at the bailout were doing so FOR NO FUCKING REASON?

 

[charrison]

Originally posted by: Perknose
Profitable enlightened socialism. Suck on it, caveman ideologues. Even if all we end up with is the interest as profit on most of the remainder, the real cost was in doing nothing, and even George Leroy Bush understood that.

Very few advocated doing nothing. Quite a few wanted to make sure it was done right, rather than rammed though.

 

[GrGr]

Originally posted by: senseamp
The only reason many of these banks are repaying these funds and making a "profit" is that the government bailed out AIG and absorbed those bank's counter party risks. So they are taking money from AIG, which is taking it from the government, and repaying it to the government.

And of course (since GS and JPM rigged this game to begin with) they are making record profits off it too. Not bad in this down economy eh? Without the US government (ie US taxpayer) underwriting all the speculation these investment banks would no longer exist. These banks are just leeching off a thoroughly corrupt system, but since they are in charge of it they win and everybody else loses.

 

[Phokus]

Glenn Beck can go to hell: http://www.youtube.com/watch?v=p84v5QggYnE

 

[Chaotic42]

Originally posted by: Phokus
Oh you mean glenn beck and all the conservatives who were screaming at the bailout were doing so FOR NO FUCKING REASON?


Dear conservatives: go to hell.

That's not very friendly.

One of us is going to have to find a new word for the fiscally liberal "neocons". As someone who considers himself an actual fiscal conservative, I don't like them giving me a bad name. I can do that on my own.

 

[JS80]

Taxpayers got ripped off. 23% return on that type of risk is absolute horseshit. GS ripped off the Treasury and they know it. Goldman stock has more than doubled since the TARP infusion. 23% return is absolute bullshit.

 

[ebaycj]

Originally posted by: JS80
Taxpayers got ripped off. 23% return on that type of risk is absolute horseshit. GS ripped off the Treasury and they know it. Goldman stock has more than doubled since the TARP infusion. 23% return is absolute bullshit.

Agreed.

 

[Darwin333]

Isn't it like revolving credit though? Does the money go into the general fund of get loaned right back out?

 

[Vic]

Originally posted by: Perknose
Profitable enlightened socialism. Suck on it, caveman ideologues. Even if all we end up with is the interest as profit on most of the remainder, the real cost was in doing nothing, and even George Leroy Bush understood that.

An issue I have with your post is that TARP isn't socialism. More like 'collectivist capitalism' is how I would describe it. Govt doesn't own the means of production, instead the means of production own govt and have used it as a hedge/insurer against its losses.

 

[ahurtt]

What kinda crap logic is this? That's like saying my stock portfolio is worth more today than it was in September of 2008 just because some stocks I bought back when the DOW was around 7900 have appreciated 15-20% although my portfolio as a whole is still down over 30% compared to what it was worth back in September '08. . .So yeah, I'm in the hole less today than I was a couple months ago but I'm still in a hole. And until ALL the TARP money is paid back in full WITH interest we haven't made a damn nickel. And unless I'm mistaken, the total economic stimulus was something between $700-800 Billion. . . explain to me please. . .how is it we've cleared a profit at this point?

 

[alchemize]

AIG got $70 billion, what do you expect back from them?

 

[Vic]

Originally posted by: ahurtt
What kinda crap logic is this? That's like saying my stock portfolio is worth more today than it was in September of 2008 just because some stocks I bought back when the DOW was around 7900 have appreciated 15-20% although my portfolio as a whole is still down over 30% compared to what it was worth back in September '08. . .So yeah, I'm in the hole less today than I was a couple months ago but I'm still in a hole. And until ALL the TARP money is paid back in full WITH interest we haven't made a damn nickel. And unless I'm mistaken, the total economic stimulus was something between $700-800 Billion. . . explain to me please. . .how is it we've cleared a profit at this point?

Because we bought in after Sept 08 and the DOW broke 9k today?

Don't take up day trading, guy.