As Biggest Banks Repay Bailout Money, the U.S. Sees a Profit

Aug 30, 2009 Full story: www.nytimes.com 85

Nearly a year after the federal rescue of the nation's biggest banks, taxpayers have begun seeing profits from the hundreds of billions of dollars in aid that many critics thought might never be seen again.

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Lance Winslow

San Jose, CA

#1 Aug 30, 2009
Blame Obama for the payback, no?

“Truth to Power!”

Since: Apr 07

Niceville, FL

#2 Aug 30, 2009
Did Bush get something right or is there more to the story????

Hmmmmmmm.
http://www.subsidyscope.com/projects/bailout/...

“Truth to Power!”

Since: Apr 07

Niceville, FL

#3 Aug 30, 2009
TARP Scorecard: Paybacks Have Yielded Total Return of 10.16%

* August 27, 2009,

By Stephen Grocer

Critics of the Troubled Asset Relief Program said the government was simply giving away taxpayer funds when it invested in all those financial institutions last fall.

The government insisted the investments would show a profit.

Who was right?

So far, it seems the government was right, according to a report from data provider SNL Financial.

As of this month, 22 banks have paid back TARP and redeemed warrants. Those firms were recipients of $40.6 billion in government money. Including warrants and dividends, government has received $44.7 billion from those banks. The total rate of return to the Treasury for all companies that have repaid TARP funds and redeemed their warrants has been 10.16%, according to SNL data. The warrant repurchases have accounted for a large portion of the returns–7.15%. On an annualized basis, the Treasury’s investment in the 22 banks that have redeemed the preferred shares and warrants yielded 12.74%.

Since last Oct. 13, when the government told nine banks it would be injecting billions of dollars into them, the DJIA has had a total return of 4.82%.

The biggest returns are chalked up from Goldman Sachs Group, Morgan Stanley and American Express, which yielded returns to Uncle Sam of 14.18%, 12.68% and 12.23%, respectively, according to SNL data.

Not surprisingly, the redemptions that generated the biggest returns for the government came in July and August. That was after shares of banks had jumped and criticism from the Congressional Oversight Committee over the value of early warrant redemptions resulted in later transactions being more favorable to the Treasury, SNL writes.

To be sure, the complete story of government investments isn’t yet written, as plenty of large financial institutions–Bank of America, Citigroup and Wells Fargo to name a few–have yet to repay the government. And this analysis doesn’t include huge government investments in American International Group or the mortgage giants Freddie Mac or Fannie Mae, let alone TARP funds funneled to auto makers General Motors and Chrysler.

Still, the Treasury’s investment in Citigroup does look well timed. Taxpayers have netted a paper profit of almost $11 billion on its 34% stake in the banking giant. On top of that, the Treasury has collected a combined $7.3 billion in dividend payments from the about 500 banks that received TARP funds.

http://blogs.wsj.com/deals/2009/08/27/tarp-sc...
Lance Winslow

San Jose, CA

#4 Aug 30, 2009
Perhaps more of Bush's most substantative economic achievements will be the result of his being gone.
amazed

Tallahassee, FL

#5 Aug 30, 2009
Give me a few billion dollars and I'll turn a profit for you as well.
amazed

Tallahassee, FL

#6 Aug 30, 2009
It's not the job of the government to meddle in the free markets.

“Bounce Barry in 12, Dems in 10”

Since: Mar 08

AZ, Sonoran Desert

#7 Aug 30, 2009
Good. Now maybe the govt. can look at some tax cuts.
Cranky Old Man

United States

#8 Aug 30, 2009
Given the NY Times past record, I am skeptical of anything in it. It reads in part, "These early returns are by no means a full accounting of the huge financial rescue undertaken by the federal government last year to stabilize teetering banks and other companies." Read the whole article. I wish success for the bailouts, but I do believe banks do miracles.
Plain Jane

United States

#9 Aug 30, 2009
OH NO! That can't BE! How can people continue to scream about all that wasted money driving up the deficit if it gets paid back with interest. LOL!

“My Commander-in-Chi ef!”

Since: Jun 07

Obama got Osama!

#10 Aug 31, 2009
Plain Jane wrote:
OH NO! That can't BE! How can people continue to scream about all that wasted money driving up the deficit if it gets paid back with interest. LOL!
I can see it now… right-wingers are getting dizzy and need to lay down for a bit. This is the opposite of “I hope he fails”; this is not good news for the unpatriotic right. Just wait until the Stimulus Package kicks into full gear; that great news will have a lot of right-wingers in need of President Obama’s health care for their extended stay in the ER, LOL.
Say WHAT

Germany

#11 Aug 31, 2009
Marine Corp Pat wrote:
<quoted text>
I can see it now… right-wingers are getting dizzy and need to lay down for a bit. This is the opposite of “I hope he fails”; this is not good news for the unpatriotic right. Just wait until the Stimulus Package kicks into full gear; that great news will have a lot of right-wingers in need of President Obama’s health care for their extended stay in the ER, LOL.
That’s kind of funny; I thought TARP was done under Bush!

As far as it being a success, it seems your skipping over this part of the story “The government still faces potentially huge long-term losses from its bailouts of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages.”

Also, how much of the TARP money was paid back? WE don’t actually make a profit, until ALL MONEY IS PAID BACK, or enough is paid back by some banks to total over $700 Billion with interest, then it is a profit.

Then your also not paying attention to the other shoe that is about to drop, the commercial real estate mortgage crisis.

http://online.wsj.com/article/SB1251674229620...

Since: Mar 09

Hidden

#12 Aug 31, 2009
Azjaeger wrote:
Good. Now maybe the govt. can look at some tax cuts.
LOL

what planet are you from. We are in DEBT. Why do you want our children to pay for what you are getting today?

Bush cut taxes and the debt went out of control. It's time to REVOKE the bush tax cuts.

Perhaps we can roll the tax rates back to the 50's when the economy was great, and one earner could support a family. Those tax rates were higher than anything we have today, yet things were much better. Try to put those back and people would revolt. They just don't get we have to pay for all this borrowing. We have to pay for the monolithic army and the two wars and the foreign aid. Maybe if the Gov't was pay as you go the people would force congress to reign in spending. Or perhaps they would be too chicken to spend all that money if they had to raise taxes to do it.

Time for a balanced budget amendment.
Seeking truth

Dearborn Heights, MI

#13 Aug 31, 2009
I'm glad. I'm sure that's bad news for the frightwingers. My only complaint is that the banks are not loaning the money to small business owners and many homeowners. They got the money to make loans and they aren't doing it. We need more Cash for Clunker programs to stimulate the economy. Screw the banks and insurance companies.
Crazy Ox3thong

West Newton, IN

#14 Aug 31, 2009
Lance Winslow wrote:
Blame Obama for the payback, no?
blame on free nuts vote :)
Crazy Ox3thong

West Newton, IN

#15 Aug 31, 2009
The laughing liberal wrote:
TARP Scorecard: Paybacks Have Yielded Total Return of 10.16%
* August 27, 2009,
By Stephen Grocer
Critics of the Troubled Asset Relief Program said the government was simply giving away taxpayer funds when it invested in all those financial institutions last fall.
The government insisted the investments would show a profit.
Who was right?
So far, it seems the government was right, according to a report from data provider SNL Financial.
As of this month, 22 banks have paid back TARP and redeemed warrants. Those firms were recipients of $40.6 billion in government money. Including warrants and dividends, government has received $44.7 billion from those banks. The total rate of return to the Treasury for all companies that have repaid TARP funds and redeemed their warrants has been 10.16%, according to SNL data. The warrant repurchases have accounted for a large portion of the returns–7.15%. On an annualized basis, the Treasury’s investment in the 22 banks that have redeemed the preferred shares and warrants yielded 12.74%.
Since last Oct. 13, when the government told nine banks it would be injecting billions of dollars into them, the DJIA has had a total return of 4.82%.
The biggest returns are chalked up from Goldman Sachs Group, Morgan Stanley and American Express, which yielded returns to Uncle Sam of 14.18%, 12.68% and 12.23%, respectively, according to SNL data.
Not surprisingly, the redemptions that generated the biggest returns for the government came in July and August. That was after shares of banks had jumped and criticism from the Congressional Oversight Committee over the value of early warrant redemptions resulted in later transactions being more favorable to the Treasury, SNL writes.
To be sure, the complete story of government investments isn’t yet written, as plenty of large financial institutions–Bank of America, Citigroup and Wells Fargo to name a few–have yet to repay the government. And this analysis doesn’t include huge government investments in American International Group or the mortgage giants Freddie Mac or Fannie Mae, let alone TARP funds funneled to auto makers General Motors and Chrysler.
Still, the Treasury’s investment in Citigroup does look well timed. Taxpayers have netted a paper profit of almost $11 billion on its 34% stake in the banking giant. On top of that, the Treasury has collected a combined $7.3 billion in dividend payments from the about 500 banks that received TARP funds.
http://blogs.wsj.com/deals/2009/08/27/tarp-sc...
can u typu short like Halito, NV?:)
Seeking truth

Dearborn Heights, MI

#16 Aug 31, 2009
amazed wrote:
It's not the job of the government to meddle in the free markets.
Then you like anarchy and monopolies. We need government regulations, but I agree that we should destroy the oil cartel by investing in the development of hydrogen, wind, and solar power. The CEO of DTE claims we can't use solar power in Michigan because there isn't enough sun. Well, they use it very effectively in Germany where there is even less sun. It's time to stop the lying CEO's and invest our tax dollars in AMERICA.

“Smoke and the Rocketman”

Since: Jan 07

Brooklyn, NY

#17 Aug 31, 2009
wouldn't it be wonderful if they would use it to pay down the DEBT?????
it is not a profit if they spend it again.

“Smoke and the Rocketman”

Since: Jan 07

Brooklyn, NY

#18 Aug 31, 2009
Seeking truth wrote:
<quoted text>
Then you like anarchy and monopolies. We need government regulations, but I agree that we should destroy the oil cartel by investing in the development of hydrogen, wind, and solar power. The CEO of DTE claims we can't use solar power in Michigan because there isn't enough sun. Well, they use it very effectively in Germany where there is even less sun. It's time to stop the lying CEO's and invest our tax dollars in AMERICA.
the rest of the world is using the resources found within their own countries.. our EPA will not let us.. why do people not think that other nations will one day attack US for our resources?? China already OWNS us,, will they come and rule us?
Barack Obama and his minions are setting up their special interests to profit from the changes they are making to our country that kill our capitalistic democracy giving them more power over us.. Barack is no different from Saddam Hussein in this way.. and why do you not think that their special interests are monopolies?? they ARE!
Barack Obama is the enemy within!
Don Joe

Minneapolis, MN

#19 Aug 31, 2009
amazed wrote:
It's not the job of the government to meddle in the free markets.
What free markets would those be?
Mizz Bee Haven

United States

#20 Aug 31, 2009
Lance Winslow wrote:
Blame Obama for the payback, no?
Show us the money.
Only a small portion of the total bailouts have been repaid, and the US government is still paying interest on the mega billions in loans it borrowed from China.
This is like borrowing $10,000 on your credit card, loaning it to your brother in law, and then a few months later he re-pays you $2,000 + 5% interest along with a promise to eventually repay you in full when he gets the money.
Let's see where we stand in the fall of 2012.

"...The government still faces potentially huge long-term losses from its bailouts of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages."

"...The taxpayers want their money back and they want the government out of our banking system,” Representative Jeb Hensarling, a Texas Republican and a member of the Congressional Oversight Panel examining the relief program, said in an interview."

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