Report: US makes $4 billion from bailout banks

AP

http://news.yahoo.com/s/ap/20090831/ap_on_bi_ge/us_bailout_profits

2 hrs 2 mins ago

WASHINGTON – The U.S. government has hauled in about $4 billion in profits from large banks that have repaid their obligations from last year's federal bailout, The New York Times reported Sunday.

Last September, Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressed congressional leaders for legislation authorizing a $700 billion financial bailout of some of the nation's largest financial institutions, which were in danger of collapsing. The bill was signed into law in October.

Critics of the bailout were concerned that the Treasury Department would never see a return on its investment. But the government has already claimed profits from eight of the biggest banks.

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Let me edit to add.. we are speeding up our pullout of Iraq.. The economy numbers looked better than expected..

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I've been saying ad nauseaum for months that these "bailouts" are NOT handouts they are LOANS. They have to be paid back with interest and, frankly, the longer the banks take to pay them back, the more money we make, within reason. If people would put down the pitchforks and stop bitching long enough to educate themselves about the actual plan, they might be able to consider the merits of the plan; it saved our economy from the brink and we are making a profit. It was totally worth it (mostly because it did save the economy from going completely over the edge).

the US would eventually turn a profit. It was a win-win proposition.

:sarcasm:

I've been saying this since I read Barney Frank's Bill before it was even passed, and when I read the terms of the preferred shares under which the TARP program purchased equity in the banks.

The big profits that the TARP is realizing though seem not to be from the income on the loans. As an added attempt to recoup any gains the banks made, the banks were required to issue warrants on their own stock to the Treasury. The stock in those banks was almost worthless when the warrants were issued, and now that the banks have been rescued, the Treasury owns some very valuable warrants, which the banks have also had to buy back.

While the dividends on preferred were simple interest on the "loans" to the banks, the warrants actually re-captured the increased value of the banks of being saved by the federal government.