Treasury: 10 big banks can repay bailout

Source: MSNBC

NEW YORK - The Treasury Department has approved 10 of the nation's largest banks to repay $68 billion in government bailout money.

The department on Tuesday said the banks, which were not named, will be allowed to repay the money they received from the $700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis.

The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation.

Among the banks that last month passed government "stress tests" and confirmed that they received permission to repay the bailout funds were: JPMorgan Chase & Co., American Express Co., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp. and BB&T Corp.

Read more: http://www.msnbc.msn.com/id/31183784/

Did the economy suddenly improve dramatically enough for them to do this so soon?

I don't understand... Did I miss something?

Weird huh?

Now people are worried the banks won't lend because they used their money to pay back the TARP.

Oh well. Can't win.

and would just try to pull in credit, thus destroying the economy.

and lend it out, only they put all these restrictions and made the companies feel like welfare cases so now they want out.

not be available later." ("Government" in this case meaning Paulson.)

At the time Paulson was saying this, Obama and an overwhelmingly Democratic--and therefore supposedly anti-business-- Congress had been elected and were awaiting January to take office, the economy was in free fall and no one was lending to anyone, including to other financial institutions.) So, the banks took it, almost like taking out insurance. No one had a gun to the heads of any bankers and they were dealing not only with a lame duck administration with one foot out the door, but also with a Party that had been smashed at the polls. So, talk of Paulson having "made" the banks do anything is simply not reality.

Now that the economy no longer seems to be in free fall--and the banks see that the public thinks it should have something to say about compensation and wasteful spending the like as to financial institutions that are using its money--some banks are lining up to pay back the TARP money they took, just in case. See also, Reply # 17.

BTW, you can't BOTH (1) have had enough money before taking TARP money AND (2) not have enough money to lend because you are repaying the supposedly extra money that you borrowed. If you did not need the TARP money in the first place, paying it back should not affect your ability to do business one iota. However, it doesn't matter anyway, because the banks were not lending before the TARP before the TARP because they were fearful of the make believe economy that their very own greed had helped destroy.

Then, they were not lending while they had TARP money because gubbamint did not put enough strings on the bailout money to make them lend (or to make them control their spending). So, if they don't lend now, it's no change anyway and has nothing to do with either taking the TARP in the first place or with repaying it now.

the idea being that they want didn't unhealthy ones singled out and cause people to make a run on those banks

Far more than necessary. This was when the floodgates started to break.

when you head a highly sophisticated financial institution.

I love how the party of personal responsibility is always palming off responsibility on anyone and anything but their own person. No one forced them to do anything. As always, they want it every which way--and no one is saying "no."

so they rush to pay back when they see everybody is looking at them

They didn't give up compensation/bonuses...they merely delayed them.

Full steam ahead!

If they get in trouble again, let them sink.

them over temporarily, like the Republicans were waying. As it was, we made a dumbass supposedly middle of the roa move of throwing money at them with not enough conditions, so they didn't use it to lend anyway. ObamaGeithner/Democratic Congress will get the blame for everything that goes wrong and Bush/Paulson/Bernanke will get the credit for anything that goes rightt.

And that's why Dems should just do what they think is right and NEVER worry about what Repugs may say about it. We already KNOW what they'll say. Even if something hasn't happened yet, we already KNOW what they'll say about it.

Bwah ha ha ha ha! I crack myself up.

Ok, I am failing to understand how $68 billions dollars could be paid back.

For the first few months of 09, credit markets were frozen. Banks weren't lending. They
were hoarding their cash because they were terrified. From Jan-March there were countless
stories about it being nearly impossible to borrow money.

There has been a thawing of the credit markets--but consumers aren't running out to borrow
money. Small business owners are hunkering down. Few are expanding.

I fail to see how these banks were in such dire straights---and on the verge of failure. But now,
they're seething with cash and wanting to pay back these billions.

It really makes no sense to me. From the supply side (the banks) these banks didn't loan out enough
to make this happen. From the demand side (the borrowers) it can't be consumers and small businesses
fueling this growth.

Can anyone explain this?

cut dividends to raise the funds.

After the TARP giveaway, you may remember the battle of the banks to be allowed to
label their bad loans as "mark to market".
They got better than that..they were allowed to state whatever value they wanted on the worthless paper, which became instant " good assets".
This makes the banks look solvent.
Therefore, they cannot justify needing TARP funds anymore if they are solvent.
But they can't admit they are insolvent and that they hold worthless assets.
So they return 68 billion ( on paper) of the 700 billion they got.
In truth, all that money is just 0101010101010101..it's not real.
It is just moved around to different balance sheets and claimed to be real.

just in case it's needed:sarcasm:

With Geithner and Summers on Obama's team there will be NO reform. Their goal is to prop up the economy with another bubble and then dump it on whoever is the next President. Do you really think the Obama Administration was ever going to stand up to Wall Street?

Geithner has been calling for massive overhauls...Just listen to the Republicans calls that he is on a power grab. I think people hate him so much they do listen to what he has proposed on many different occasions. Reform is coming and it will be a fight but I think Geithner is the least of your worries.

I want to be completely wrong about Geithner.

These guys just seem to be more Wall Street toadies...

The interview is done by Charlie Rose and it is an hour long. I found it full of information that helps understand why things are being done the way they are and what to look forward to.

The link is up a couple of post if you have a problem finding it I will get it for you.

I honestly do not think Geithner is the demon many make him out to be. But that is me.

Here is an interview with Timothy Geithner it was done back on 06 May 2009...Many of the things he says are now coming true. Of course we have a long way to go but I think the Obama Admin. and the economic team he has assembled are doing a good job.

He talks about (not in this order):
The problems of Compensation and reform
In General Financial reform overall
Toward the end (15-20min) Geithner talks in detail as to why banks got bailouts...And how we the people have a right to be mad!
Geithner says there will be sweeping financial reform later this year...Says we can never go back to the past 10yrs.
many other topics as well...It is an hour long.


BTW-I think Charlie Rose is a wonderful interviewer regardless of the topic. Thats just me.

Watch the entire interview and decide what you think.



Timothy Geithner on Charlie Rose for the entire hour.

http://www.charlierose.com/view/interview/10278

Not good for the Currency Either.

Oh, but I know, "Programs", "Reform", "Green Shoots", "55% Stock Market Rally".....

BRAAAAAAAAAAAAAAAAAAAIIIIIIIIIIIIIIINS.

is being blown up again.

The current 5 % mortgages are too low. Banks over the long run can't make money with 5 % mortgages. They're just pushing the problem back and making it worse.

Now they could buck the government restrictions and go back to writing their own paychecks.

Limiting executive pay? The government should have fired them all, broken them up into smaller companies, and charged the ones responsible for securities fraud.

Banks are being charged the lowest interest rates in over a half century but they find justification in raising our rates and or lowering our Credit Lines..I am learning to despise the banking industry...

Source: NY Times

The Treasury Department cleared the way for 10 big banks on Tuesday to start repaying billions of dollars in taxpayer aid, a crucial step in easing the government’s grip after an unprecedented series of interventions.

JPMorgan Chase and Goldman Sachs were among the banks deemed strong enough by federal regulators to leave the Troubled Asset Relief Program, or TARP, after months of lobbying and strong performances on recent stress tests.

The 10 banks are expected to return about $68.3 billion to the Treasury Department, more than double the administration’s initial estimate of about $25 billion in funds to be returned this year.

Read more: http://www.nytimes.com/2009/06/10/business/economy/10tarp.html?ref=politics

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This is some nice news. President Obama even forsees that taxpayers "will turn a profit" on the TARP funds lent to banks. I think in retrospect we'll see that this was the correct course of action to take.

Source: BBC

Ten of the largest US banks will be able to repay $68bn in government bail-out money, the US Treasury says, a sign the financial crisis is easing.

President Barack Obama welcomed the move but said it was not a sign that "our financial troubles were over".

Banks have been eager to pay back the money to escape potentially onerous government restrictions, such as caps on executive pay.

The banks received the money at the height of the financial crisis.


Read more: http://news.bbc.co.uk/2/hi/business/8091689.stm

to the obscene amount of debt we're creating.

... this means the banks are out of danger, all I can say is BBWWWWHHHHHAAAAAAAAAHAHAHHAHAA.

They are still insolvent until and when housing recovers to a significant degree. The goobermint and banksters are betting this will happen "soon", I believe it will not happen probably ever.