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Question: Did the government make a NET profit after the savings and loans "crisis" was ironed out?

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uponit7771 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-02-08 09:57 AM
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Question: Did the government make a NET profit after the savings and loans "crisis" was ironed out?
Thank you in advance for your answer
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Fresh_Start Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-02-08 10:05 AM
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1. no
As of December 31, 1995, RTC estimated that the total cost for resolving the
747 failed institutions was $87.9 billion. These costs represent the
difference between recoveries from receivership assets and the amounts
advanced to pay depositors and other creditors of failed institutions plus
the expenses associated with resolving institutions. As shown in table 1,
$81.3 billion, or 92 percent, of RTC’s total estimated costs have already
been realized through December 31, 1995, and therefore, are known. The
estimated $6.6 billion remaining at December 31, 1995, represents
expected future losses on remaining receivership and corporate assets.
The ultimate recoveries on those assets are subject to uncertainties.
http://www.gao.gov/archive/1996/ai96123.pdf
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uponit7771 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-02-08 10:23 AM
Response to Reply #1
5. Thank you for your answer and look up of information
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EV_Ares Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-02-08 10:05 AM
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2. You know I have heard several say that but have never actually seen the #s where we did make any
Edited on Thu Oct-02-08 10:06 AM by EV_Ares
money. This is what they did:

Savings and Loan Bailout: The Financial Institutions Reform, Recovery and Enforcement Act of 1989

Upon taking office in 1989, President George H.W. Bush proposed new legislation to provide the adequate funding to close the insolvent S&Ls. The FIRREA did the following:

• Eliminated the former regulatory structure that was in place and gave this power to the Office of Thrift Supervision.

• Further, the S&L insurance system was eliminated and the FDIC overtook these powers.

• Finally, the Resolution Trust Corporation (RTC) was created to sell off the real estate assets of the insolvent thrift firms. The RTC was able to sell 95% of the assets of the insolvent firms, with a recovery rate exceeding 85%. Afterwards, the RTC went out of business in 1995.

• The bailout itself cost $150 billion.

http://everydayecon.wordpress.com/2008/09/23/the-savings-and-loan-crisis-the-rtc-and-the-paulson-plan/

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romulusnr Donating Member (186 posts) Send PM | Profile | Ignore Thu Oct-02-08 10:07 AM
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3. if by "government" you mean
Republican politician campaign coffers and kickbacks,

...then, yes.
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leveymg Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-02-08 10:08 AM
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4. Absolutely not. According to a 2000 FDIC study, the total cost was $145.7 billion, triple the
Edited on Thu Oct-02-08 10:10 AM by leveymg
initial estimate. http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf , p. 32.

The early official estimates were one-third that amount.
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