Three Cheers for TARP

[Gone4Good]

TARP will cost far less than once thought.

Now Treasury reckons that taxpayers will lose less than $50 billion at worst, but at best could break even or even make money.

Small price to pay for preventing economic catastrophe. Props go to all involved, Paluson, Bernanke, Geithner, Obama, and yes, Bush.

 

[73ss454]

The government allowed this mess the least they can do is figure a way out. JMHO.

 

[REWahoo]

The government allowed this mess the least they can do is figure a way out. JMHO.

Right. We all know the govt's track record on figuring a way out of self-inflicted messes.

 

[ziggy29]

We did learn one thing: If we want to recover the cost of bailing out businesses, place caps on executive compensation as a precondition to receiving the funds. That will leave them begging, borrowing or stealing to pay it back.

 

[clifp]

We did learn one thing: If we want to recover the cost of bailing out businesses, place caps on executive compensation as a precondition to receiving the funds. That will leave them begging, borrowing or stealing to pay it back.

Man ain't that the truth. When they first started talking about the pay restrictions, I figured it was just populist pandering by Congress and government official. Still it seemed reasonable to me at time that if we the taxpayers were large stock and/or debt holders that we restrict their pay. I posted something along those lines defending TARP.

The unintended consequence turned out to be terrific though. A bunch of bankers could say "we are determined to pay the tax payers back" in part because TARP was so unpopular, but mostly cause they hated having a pay czar costing them millions.

It seems to me that if Government official had made the case initially on TARP, "we are confident that taxpayers will be paid back, because we are confident that banker are greedy and hate having their compensation cut" most everybody would have nodded their heads in agreement.

But since I don't remember any government official in either administration making this case, I think they just got lucky.

 

[REWahoo]

But since I don't remember any government official in either administration making this case, I think they just got lucky.

Hey, give the beltway bunch a little credit! I'm sure they had this all figured out from day one and knew exactly what they were doing.

Now pardon me while I work on removing my tongue from my cheek where it appears to be embedded...

 

[jayc]

Small price to pay for preventing economic catastrophe. Props go to all involved, Paluson, Bernanke, Geithner, Obama, and yes, Bush.

These crooks pulled the biggest heist in history. They should be in jail.

 

[harley]

These crooks pulled the biggest heist in history. They should be in jail.

No real comment on this one. I just wanted to quote it before i t gets modded out of existence.

 

[Animorph]

Makes those "spent $800B bailing out Wall Street" campaign ads I keep having to listen to seem a little on the crazy side.

 

[HFWR]

These crooks pulled the biggest heist in history. They should be in jail.

There was gold in them thar hills, and hogs aplenty at the trough, if you'll pardon the mixing of metaphors. Maybe if we let the dope smokers out of prison, we'll have room for the mortgage brokers, banks, investment banks, and, last but not least, politicians who created this mess...

But, quite frankly, the superiority one might feel for stopping the "moral hazard" from occuring would be cold comfort around the campfire in Hooverville...

 

[mickeyd]

TARP probably helped heal a self-inflicted wound. I do not believe that things were nearly as bad as the administrations led us to believe tho.

 

[chinaco]

What was that?? Three Jeers!


I believe they did what they think would stabilize things during the meltdown.

I am not in favor of anymore TARP or for that matter more QE.

Enough fixing [-]damage[/-] has been done!

 

[RDamien]

TARP will cost far less than once thought.



Small price to pay for preventing economic catastrophe. Props go to all involved, Paluson, Bernanke, Geithner, Obama, and yes, Bush.

Yes three cheers, the government had both the power and ability to save you from certain disaster. The proof? Well nothing happened right? I'm sure all the people crawling over their own mothers to distance themselves for that vote will be glad to hear it.

Democratic Bailout Baloney | FactCheck.org

I'll stop the next disaster for 30 billion.

 

[HFWR]

Yes three cheers, the government had both the power and ability to save you from certain disaster. The proof? Well nothing happened right? I'm sure all the people crawling over their own mothers to distance themselves for that vote will be glad to hear it.

Democratic Bailout Baloney | FactCheck.org

I'll stop the next disaster for 30 billion.

Gotta love politics...

We need to fix "to big to fail", at least to the extent that we can. Since we "bailed out", we can only guesstimate how things would have been had we not. Could have been REALLY ugly, or it could have allowed asset prices to find the appropriate level faster, allowing prosperity to return...

 

[Gone4Good]

Could have been REALLY ugly, or it could have allowed asset prices to find the appropriate level faster, allowing prosperity to return...

I love the "allow asset prices to clear" argument, until you stop to think where housing prices would clear in an all cash economy, and what that would mean for the rest of the real economy. It brings you back to the first part of the sentence . . . REALLY ugly.

 

[HFWR]

I love the "allow asset prices to clear" argument, until you stop to think where housing prices would clear in an all cash economy, and what that would mean for the rest of the real economy. It brings you back to the first part of the sentence . . . REALLY ugly.

Forgot my tongue-in-cheek smiley...

 

[FinanceDude]

So, in other words, TARP was the ultimate FDIC for BANKS, not BANK ACCOUNTS!!

 

[Gone4Good]

TARP Returns 8.2% profit to taxpayers, beating treasuries

The U.S. government’s bailout of financial firms through the Troubled Asset Relief Program provided taxpayers with higher returns than they could have made buying 30-year Treasury bonds -- enough money to fund the Securities and Exchange Commission for the next two decades.

If only we had more "spending" programs like this one, we'd have a balanced budget in no time.

 

[ziggy29]

If only we had more "spending" programs like this one, we'd have a balanced budget in no time.

Sounds like all we have to do is pass a law that puts a cap on executive pay and allow corporations to pay a very large fee to be exempted from the cap. Brilliant!

 

[Gone4Good]

Sounds like all we have to do is pass a law that puts a cap on executive pay and allow corporations to pay a very large fee to be exempted from the cap. Brilliant!

Well that could work, except that wasn't really the program now was it?

And I'm not aware of anyone claiming that the government extorted above market prices on the repayment of warrants and the like. In fact, companies had the option of letting the Treasury auction off their securities if they couldn't agree on a price to repurchase them. Several banks did just that. With such a system either the banks bought the securities at a price they found attractive, or the Treasury got a true market price. That doesn't sound much like a "fee" to me.

But I find it interesting that we've reduced a large program to one of its most trivial parts, and are now pretending that that part represents the whole. I guess its easier to do that than admit the program not only achieved its stated objective, but did so at a profit for taxpayers.

 

[ziggy29]

Well that could work, except that wasn't really the program now was it?

No, but the point was simply to showcase how corporate "leaders" are motivated. There's no way, IMO, that TARP recovers as much cash as quickly as it did if there were no provisions to restrict executive compensation until all loans are paid off. And I think that's instructive for future reference.

 

[HFWR]

And the endless stream of whiny-assed CEOs on CNBC has made for great theater...

 

[Texas Proud]

Well that could work, except that wasn't really the program now was it?

And I'm not aware of anyone claiming that the government extorted above market prices on the repayment of warrants and the like. In fact, companies had the option of letting the Treasury auction off their securities if they couldn't agree on a price to repurchase them. Several banks did just that. With such a system either the banks bought the securities at a price they found attractive, or the Treasury got a true market price. That doesn't sound much like a "fee" to me.

But I find it interesting that we've reduced a large program to one of its most trivial parts, and are now pretending that that part represents the whole. I guess its easier to do that than admit the program not only achieved its stated objective, but did so at a profit for taxpayers.

The extortion part was them forcing all the big banks to take the money... Not all banks needed the money... but they had to pay to get that 'capital' even if they did not need it or could use it for investments..

I did not read the article... so I do not know if they are doing some funny accounting... remember that the auto firms got a lot of debt forgiven when they went through BK... at the end of the day maybe they will pay it all back, but who knows...


Now all we have to do is not allow the politicians to spend it on something else and claim that it was already spent...

 

[RDamien]

TARP Returns 8.2% profit to taxpayers, beating treasuries



If only we had more "spending" programs like this one, we'd have a balanced budget in no time.

I saw this article today and assumed you'd post it here

While banks can borrow at close to zero from the Fed, they lend to consumers and corporations at almost 5 percent, or to the Treasury at 2.5 percent, and they get to keep the difference.
“The huge wealth transfer from fixed-income pensioners to the banks has helped the banks repay TARP,” Petzel said.
​

Even though some of the support has been withdrawn, part of it will likely be lost, such as the hundreds of billions of dollars put into Fannie Mae and Freddie Mac, she said.
“These are all indirect subsidies the banks got,” Prins said. “So the TARP gains touted by the Treasury are only true if you ignore all the other costs.”
​

So i assume that by "in no time" you mean never.

 

[Texas Proud]

TARP Returns 8.2% profit to taxpayers, beating treasuries



If only we had more "spending" programs like this one, we'd have a balanced budget in no time.

Opps... mabye they spoke to soon.....

Fannie and Freddie may need another $215 billion - Yahoo! News


Fannie and Freddie may need another $215 billion