TARP Bailouts Make a Profit.

Filed in National by on June 11, 2010

They actually turned out to be a money maker for the federal government. From the Wall Street Journal:

The Treasury Department on Friday said the money repaid to taxpayers for government funds used to bail out U.S. companies has for the first time surpassed the amount of loans. The Treasury, in its May report to Congress on the Troubled Asset Relief Program, said TARP repayments reached $194 billion, $4 billion more than the outstanding debt of $190 billion.

Indeed, the program generated at least $23 billion in revenue for taxpayers. For our conservative friends who do not understand math, that means two things 1) all the taxpayer money spent to bailout the banks repaid, and 2) based on the interest we were charging them, and the sale price of the stocks we took in each bank, we are making a profit (or a surplus) of at least $23 billion.

How do you like them apples?

UPDATE And I am a liberal who does not understand math, as I initially read the WSJ article to mean that the bailouts had been fully repaid. So I edited the title and the bold words above. My apologies.

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  1. Gee, you never look into what the Fed has outlayed as an part of the bailout? Get real.

  2. a.price says:

    wait…. we invested in something risky and made a profit? SOCIALIST!!!!!

  3. anonone says:

    They are not fully repaid. They are slightly more than half repaid. $190 billion is still owed to the Federal Government.

  4. anon says:

    They are not fully repaid. They are slightly more than half repaid. $190 billion is still owed to the Federal Government.

    If A1 is correct, that is even better news. They are only half repaid and the principal is already recovered. Assuming the balance is collectible, that is a profit of 100%. Charlie Cawley would blush at that interest rate.

  5. anon says:

    Gee, you never look into what the Fed has outlayed as an part of the bailout?

    How much money did Congress appropriate for the Fed?

    Alright then.

  6. I read this morning that the cost of TARP has gone from $700B –> $350B –> $105B.

  7. a.price says:

    i dont see how this is anything other than good news….. unless you of course are a Republican who needs the country to get worse so you can say Obama failed and re-take power. Or a LefTeaBag who has decided Obama has failed and any sign of good news messes with your new narrative….

  8. Delaware Dem says:

    It is good news all around, A.Price. It reduces the deficit! And if you are a Teabagger angry at government bailouts using your taxpayer money, well, you really have no reason to be angry anymore then (unless of course your reason for being angry has nothing to do with bailouts and everything to do with a Democrat and/or a black man being President).

    For the Firebaggers like A1 and to a certain extent Nancy Willing, they are just purists, and much like the Teabaggers, cannot comprehend information that does not fit into their preordained narrative about the President.

  9. PBaumbach says:

    I think that the WSJ article notes that $394B was loaned/invested out, and more than half has thus far been repaid (the first time the 50% level was broached).

    As a.price says, “i dont see how this is anything other than good news.”

    This shows that our federal government can work. Here, it took a step that no other entity (public/private) could/would, and helped avert a global Armaggedon, and in the process shared some of the benefit as these firms recovered.

    Warren Buffett via Berkshire Hathaway has often served a similar, albeit smaller, role, and in the process has shared some of the good fortune that his efforts permitted. The strings attached to the TARP money (preferred securities, interest/dividend rates) ensured that the ‘moral hazard’ was reduced.

    We stand together or we fall together. Thanks to all who voted for the TARP program, we stood together. To those who voted against the TARP program–you harmed our country and should be voted out of office this November.

  10. anonone says:

    Dear DD,

    It is kind of silly to publish a blog post that is indisputably factually incorrect and then flame a commenter that points it out. It is still good news that the TARP funds are more than half paid off – but we still need to collect another $190 billion to get it all back.

    Your friend,

    anonone

  11. anonone says:

    If you subtract the $23 billion from the $190 billion that is still outstanding, then we need to get at least $167 billion back to break even on TARP. So, celebrations of a “profit” on TARP investments are a bit premature.

  12. Delaware Dem says:

    You are correct, A1. I did misread the article. And I offer my apologies to you.

  13. anonone says:

    No problem, DD, and thanks. It is still good news even if it is only 1/2 of the good news! I hope that we can get the rest back, with a profit, too.

    Your friend,

    anonone

  14. anon says:

    I don’t think much of it would be paid back if not for the threat of bonus caps. TARP belongs to Bush, but the bonus caps are Obama’s.

  15. Good for Bush. He was right again. I did point that TARP was not a gift, but a loan back in 2008. I still do not like the fact that it was not used to clean up the mess as we were originally sold. It was important to stablize the financial system. In the years 1998 and 1999 went spent most of a trillion dollars buying new technology and fixing the Y2k problem across the economy. We were successful. A lot of people then assumed that Y2k was not real issue because not much happened and it really was not a problem. That is idiotic. A lot of people say the same about the Federal Reserve efforts to keep the economy from collasping. Bush and company did a alot.

  16. Geezer says:

    What a tool. If you’ll recall it was a bipartisan group that worked on it, and both parties voted for it. Jerk.

  17. jason330 says:

    David gives Bush credit for agreeing to allow firefighters to put out a fire he started. Lowering the bar is a vital wingnut skill.

  18. anonone says:

    “Bush On TARP: ‘Why Did I Sign On To This Proposal If I Don’t Understand What It Does?’”

    “But former Bush speechwriter Matt Latimer wrote in an upcoming book (excerpted by GQ) that, even hours before he gave an address promoting the TARP, Bush fundamentally misunderstood what the program was all about…”

    http://wonkroom.thinkprogress.org/2009/09/15/bush-tarp/

  19. I remember the original Paulson proposal as practically making Paulson the president of the U.S. Bush had the good sense to get out of the way and luckily the Democrats were there to turn the proposal better that it was (though it was still awful). TARP created a huge moral hazard, which we’re still seeing the bankers today acting like kings of the universe. They weren’t punished enough, IMO.

  20. jason330 says:

    Getting billions in interest free, taxpayer backed loans to cover their gambling losses is not punishment?

  21. fightingbluehen says:

    If you believe that, I have a bridge you may want to buy.

  22. Ishmael says:

    More Than 90 Banks Miss TARP Payments
    Reuters June 17, 2010

    More than 90 U.S. banks and thrifts missed making a May 17 payment to the U.S. government under its main bank bailout program, signaling a rising number of lenders are struggling to meet their obligations. The statistics, compiled by SNL Financial from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss. The number of banks missing their TARP payments rose for the third straight quarter. In February,…