Surprise: So far, TARP is a moneymaker

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If you had qualms about the federal government's decision to react to the financial crisis by taking billions of your tax dollars and handing them over to the highly compensated people who helped create the financial crisis, perhaps you can find solace in the news that we've actually made money on the deal. A new study reported on by Reuters today says the largest component of the TARP fund has netted the U.S. more than $10 billion in profit so far.

The $700 billion Troubled Asset Relief Program was originally intended to purchase, as the name implied, troubled assets. But it rapidly transformed itself into an all-purpose emergency fund. The largest component, the $205 billion Capital Purchase Program, used government money to shore up overleveraged banks. More than 700 banks, including Goldman Sachs and Citigroup, took the money, which was offered in the form of loans and stock warrants. And according to a new report from the research firm Keefe, Bruyette, & Woods, the U.S. Treasury invested wisely.

So far, 61 banks have completely repaid their debt under the program, and the U.S. earned a 10 percent return on those investments, totaling $13 billion. There's still $65 billion in debt outstanding, but Treasury has only taken a $2 billion loss on the program thus far, and a KBW analyst told Reuters that "unless the economy just craters, the bank portion of TARP will be profitable." In other words, the bank bailout was less of a bailout than a loan that's been unexpectedly repaid.

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http://news.yahoo.com/s/yblog_upshot...JwcmlzZXNvZmE-

This blogger about sums it up:

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Alas the poor Right Wingers: They so desperately want to hate President Obama. They attacked TARP with ferocity and much to their chagrin it has turned a $10 Billion Dollar Profit for the tax payers and promises to produce Billions more in profits. They must be sucking their gums to think up new expletives to hurl at the President, for the Right Wing this is horrible news.

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But then I'll wait for the usual spin masters to post up.:popcorn:

:evilgrin:

The objection to TARP, at least on my part, wasn't about a loss of money through the program but the existence of the program itself. Banks should be allowed to fail to encourage their management to avoid being reckless. By taking away the threat of failure, what TARP has done is set the stage for future bailouts. If a bank knows that it will be bailed out, where is the incentive to act prudently? And acting imprudently is what got us into this mess in the first place.

What TARP has done is ensure that taxpayers will again be forced to assume risk that should never have been contracted for in the first place. I don't consider it a success if they are eventually made whole because I don't think that taxpayers should be on the hook for reckless behavior by banks.

Furthermore, the manner in which the TARP funds were handled gives me vapors. The government forced these banks, through threat of harassment by bank regulatory agencies and the Federal Reserve, to allow the government a share in the management. The government turned itself into a protection racket at that point, so far as I'm concerned. It muscled its way in and then started calling the shots. Though not directly related, they even forced the GM of GM to resign. The President forced a corporate manager out? This is emphatically NOT what I want to have as the relationship between government and industry.

So the money is only a side issue for me. I see bigger fish to fry here.

I suggest that has a Foxoniun magnitude spin ratio applied:nono:

I'm not sure where they got their numbers (well I am--but I can't say it here) but they don't agree with anything I have seen.

You might want to compare those claims to this report.

My most optimistic outcome is a reduced level of pain but no profit.

However, keep in mind a program like this will be subject to infinite amounts of creative accounting---on both sides of the debate:whistle:

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Originally Posted by Dave Grubb

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However, keep in mind a program like this will be subject to infinite amounts of creative accounting---on both sides of the debate:whistle:

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Never said there wouldn't the debate, Dave.

Fred, Dave and Kevin debating, wow can I come in?

Lemme see if I got this straight ... the Gooberment is bragging they have made $10 billion , but still in the hole for $65 Billion ???? :nuts::2funny:

BTW ... "TARP" really stands for 'Tricky Azzholes Retirement Putz' :doh::2funny:

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Originally Posted by SBA

Lemme see if I got this straight ... the Gooberment is bragging they have made $10 billion , but still in the hole for $65 Billion ???? :nuts::2funny:

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And the lemmings fall for it hook line and sinker. They are so stupid they think we are.