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

Source: NewYork Times

"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.

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

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. 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.

But the mere hint of bailout profits for the nearly year-old Troubled Asset Relief Program has been received as a welcome surprise. It has also spurred hopes that the government could soon get out of the banking business."

Read more: http://www.nytimes.com/2009/08/31/business/economy/31taxpayer.html

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Bwahh, haha haha, take that, Repugs and other Obama-is-bankrupting-the-country loons.

"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."

And absolutely nothing has been done about those "potentially huge long-term losses " except to fervently hope that the market will recover to something like the height of the bubble again.

One could hear the laughter from behind the doors to the "smoke-filled rooms" even in October, 2008 as they agreed to "Leave the darkie holding the bag. By 2011 we'll have made it so that everyone will believe the worst of him. Like shooting fish in a barrel. We'll be back in 2012 and stronger than ever."

People, when the "press" isn't free, you simply HAVE to own it.

so when it peters out and we go into a stall, it's not a set up. He shouldn't have propped up the status quo, and voted for the daylight robbery.

Every rock I look under speaks to Obama's involvement with the second TARP installment in Jan. 2009. Where can one find plausible references to Obama's "hard lobbying" for TARP as senator? I mean prior to the Oct. 2008 emergency conferences with Bush (and just about all of Washington's political elites) I can't find specifics on what Obama's view on TARP was.

Unfortunately the "status quo" is the only playing field we have. To jump off that horse and try another in this mid-stream is imprudent. I love a revolution as much as the next guy but I watched Dr. Zhivago like 10 times and I hate the cold.

in fact, he and McBush and McCain met at one point right around the time Paulsen got down on one knee and begged Pelosi to let him carry off the daylight robbery.

advocating for it. That may have been the right thing to do or the wrong thing to do, but he did it.

hostage in October 2008. I stand even more firmly behind my original post on the matter.

from the healthiest banks (many of which were forced to take TARP monies despite being healthy in order not to "stigmatize" big corporate donors in distress such as AIG, Citi...)

What is more, mark-to-market accounting is still in place for all kinds of toxic assets (euphemistically termed "legacy assets") and it doesn't look like the PIPP idiocy will take care of it.

The banks and financial institutions have zillions of worthless CDO and non-performing loan shit on their balance sheets and are non-lending zombie institutions rivaling if not exceeding the zombification of the Japanese banks 10 years ago.

Nothing will really move until those balance sheets reflect reality, and it doesn't look like that will happen until the real estate market and the economy reach bubblicious heights of 2007.

I haven't seen too many credible experts claiming that 2007 will be here again any time soon.

:hide:

http://www.msnbc.msn.com/id/32010841/ns/business-us_business


wake up, people.

It says that of all the programs (TARP and others) $3 trillion is outstanding.

You could re-write that by saying that the government stands to make a $30 billion profit if the return is at least 1%.

That $3 trillion included about $1.4 trillion in commercial paper which paid interest to the government.

The "bailout" was a loan, not a gift. Most, if not all, of the money will be repaid to the government with interest. If everyone pays the money back the government will realize a windfall profit which will help offset into some of the other debt we have.

That $3 trillion mark will continue to decline as other banks repay the money.

Edit to add: I largely went with the happy scenario as it is just fun because of others who seem to be imitating frightened little Tea Baggers over this. Of course some of the banks will not be able to pay it back because they will go under. But in the end, there will not be anywhere near a $3 trillion outstanding balance in any scenario unless there is a complete melt down that no one could have stopped.

Everything is going to be fine. It's going to take time, but it will be fine.

Amazing! This is like watching capitalism get stabbed in slow motion and there is nothing we can do about it! Ugh!

these asshole banks are imposing on everyone.