$10 billion in TARP profit

[Back]

Treasury announces $10 billion in TARP profit from banks (http://thehill.com/blogs/on-the-money/banking-financial-institutions/169693-treasury-announces-10-billion-in-tarp-profit-from-banks)
By Peter Schroeder - 07/05/11 04:20 PM ET

The federal government has reaped a $10 billion profit on bank loans made under the controversial Troubled Asset Relief Program (TARP).

The Treasury Department announced Tuesday that the government had pulled in another $1.7 billion in proceeds stemming from TARP loans.

Bank of Montreal had acquired M&I Bank of Milwaukee and, as part of the deal, paid back the purchased bank's share of TARP funds.

The reviled bailout program had been expected to prove extremely costly to the federal government, but bank assistance under the program has been in the black since March. All told, the government has received about $255 billion from banks under TARP, having lent out just $245 billion.

Treasury now estimates that when all is said and done, the section of TARP devoted to banks will net taxpayers a $20 billion profit.

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Where is my dividend check?

[Parkbandit]

--------------------------------------------

Where is my dividend check?

So... that's TARP. How did the bailout for the car industry end up? What about the stimulus package.. how did that turn out?

[~Rocktar~]

So... that's TARP. How did the bailout for the car industry end up? What about the stimulus package.. how did that turn out?

What about that 3rd quarter recovery and 8% unemployment rate?

[TheEschaton]

The car bailout is set to turn a profit too.

[Parkbandit]

The car bailout is set to turn a profit too.

You would have to use some very, very creative accounting for that to happen.

[TheEschaton]

Or, yanno, normal accounting:

http://money.cnn.com/2010/05/18/news/companies/gm_value/index.htm

[Parkbandit]

When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.

The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.


Again, this is the verdict of Obama’s own Council of Economic Advisors, which is about as much of a home-field ruling as anyone could ever ask for. In truth, it’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s “stimulus” has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt.

The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.

All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.”

http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

[Parkbandit]

Or, yanno, normal accounting:

http://money.cnn.com/2010/05/18/news/companies/gm_value/index.htm

Might want to check the date of that article... it's over a year old.

Here, this is closer to the truth:

http://www.youtube.com/watch?v=1gq7J71VsDM

[TheEschaton]

Really? You cited a youtube video made as a parody with no actual facts, and dispute the CNN article with figures on the valuation of the company and how much it would need to be valued at to turn a profit?

[~Rocktar~]

Really? You cited a youtube video made as a parody with no actual facts, and dispute the CNN article with figures on the valuation of the company and how much it would need to be valued at to turn a profit?

As opposed to an out of date article that does not address the damage done by the auto "bailout" or it's over all cost to the people of the U.S. Does it address the losses due to the principle creditors being displaced in favor of union and retirement benefit claims? The principle creditors lost their valid claims to secondary interests because of political donations, did it address those losses and associated costs to the U.S. in lost jobs, tax revenue and so on? Does it account for the jobs and income lost and government payments made because the used car market was destroyed and those most hurt by the recession, the working poor, are now hard pressed to be able to find or afford a decent used car since all the ones bought using government "stimulus" had to be destroyed. What about the increased costs of car insurance to those that can buy a car yet pay more due to not being able to get an older, more affordably insured vehicle? Surely it takes a look at that, right? Does it include the fact that stock valuation does not equal sale price and really has very little to do with the actual return on investment? Does the article address losses due to inflation? Does it include the costs of borrowing the money in the first place? What about the increased cost of borrowing and the costs associated with the weak economy created by instability and uncertainty fostered by the absolutely ludicrous and excessive borrowing?

Sorry, but "normal" and ordinary accounting seems to point to a complete and total failure on all sides for this "stimulus" package. It would have been far cheaper and more stimulating to the economy of the U.S. to just send every man, woman and child a check to do whatever they wanted with. The amount of spending that would have fostered based on debts being paid and income moved would have been substantially greater than the complete lack luster result we have seen. That is to say, we would have seen something and even if small it would have been far greater than what we have seen so far and that is a whole lot of nothing other than red ink.

[Parkbandit]

Really? You cited a youtube video made as a parody with no actual facts, and dispute the CNN article with figures on the valuation of the company and how much it would need to be valued at to turn a profit?

I was being very kind in not pointing out how utterly out of touch you are with reality.

In order for the US taxpayers to not be out money on the bailout, the stock price for GM would have to be greater than $53.00 per share. It's currently trading at around $31. It's high was after the IPO.. which was around $39.50

Now, if you believe there is some grand plan for the stock to almost double before our government sells off most of it's shares... which they said they would be doing sometime this summer... please enlighten us all.

[Latrinsorm]

All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.”Sorry guys thread over. All sides agree.

[Parkbandit]

Sorry guys thread over. All sides agree.

It sounds ominously like the claims made for global warming... consensus anyone?

[Kembal]

When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.

The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.


Again, this is the verdict of Obama’s own Council of Economic Advisors, which is about as much of a home-field ruling as anyone could ever ask for. In truth, it’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s “stimulus” has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt.

The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.

All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.”

http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

Yeah, no, that's a misreading of the report.

http://tpmdc.talkingpointsmemo.com/2011/07/republicans-falsely-claim-obama-advisers-burying-data-proving-stimulus-is-hurting-economy.php#more

Quote from the article:


But this is a fundamental misreading of the data. Over the past six months, and even before then, the stimulus has been winding down, and the fact that it's now responsible for the existence of fewer jobs than it was six months ago is a function of that phase-out, and the (slowly) recovering economy, not of its inherent ineffectiveness.

Here's Moody's Chief economist, Mark Zandi, in an email to me, explaining the data:

"It's not that ARRA [the stimulus] is now costing the economy jobs, it is that the economy is now creating jobs without ARRA's help," Zandi says. "This is exactly the objective of fiscal stimulus, namely to end recession and jump-start economic recovery. The Great Recession ended in June 2009, the same month that ARRA was providing its maximum benefit to the economy. Stimulus was never intended to be a source of long-term economic growth, it was intended to stop the free-fall in the private sector. It did that."

In its report, CEA isn't revising its claim about ARRA's effectiveness downward -- it's accounting for the fact that the stimulus' impact on current employment is less than it was when the stimulus was pumping out more money, and will continue to decline. Years from, when the stimulus is responsible for few if any existing jobs, it won't be evidence of the stimulus' failure either.

"CEA's estimate that payroll employment was 2.4 million higher to as of [the first quarter of 2011] than it would have been without ARRA is very similar to my estimate," Zandi says. "I consider this to be a significant benefit to the economy's performance over the past more than two years. This benefit is fading, but this is by design."

Mark Zandi, btw, was an economic adviser to McCain's campaign.

As for the car bailout, I doubt it will turn a profit, but considering the massacre disorderly GM and Chrysler bankruptcies would have had on upstream supply chains, I'm ok with this.

[Parkbandit]

Yeah, no, that's a misreading of the report.

http://tpmdc.talkingpointsmemo.com/2011/07/republicans-falsely-claim-obama-advisers-burying-data-proving-stimulus-is-hurting-economy.php#more

Quote from the article:

Mark Zandi, btw, was an economic adviser to McCain's campaign.

As for the car bailout, I doubt it will turn a profit, but considering the massacre disorderly GM and Chrysler bankruptcies would have had on upstream supply chains, I'm ok with this.

So, let's assume your blog is true... what do you believe the cost per job would be then? $250,000? $225,000? $200,000? No matter the metric, the Stimulus was an abysmal failure and spent money that our great grand kids will be on the hook for.

PS - And the fact that Mark Zandi was an economic adviser to McCain doesn't help your case, imo.

[TheEschaton]

Ah yes, McCain is a closet liberal progressive who just masqueraded as a racist, homophobic militaristic right winger.

[crb]

McCain was racist?

You realize he adopted a little brown girl right?

He went from every Democrat's favorite Republican, to Bush 2.0 because he had the audacity to win the nomination. The attacks were ridiculous.

And, even if the auto bailout is profitable, which I don't think it will be, the fact is Obama is a fag when he gives speeches saying "Banks, we want our money back." When they paid it back, the big ones long long ago now. He never goes to the UAW and says that. He is also a fag because his administration rewrote bankruptcy law to screw senior debt holders and white collar workers to deliver a big ass political payback to the UAW. Google "delphi bailout" or "GM bond holders."

Barack Obama is the worst kind of politician, the definition of a two faced doubletalking sleezebag, who will say anything, to score political points. He is also a huge hypocrite because he campaigned as the opposite of that. The guy is a douchebag, we'll be well rid of him after 2012, and yes, that is how I really feel.

Oh, and the stimulus was a big fucking failure. And Obama is also a fag for insisting this debt ceiling negotiation needs "investment" in further spending. He had his investment, it was this 800 billion stimulus. That was his opportunity, and it sucked. Also, Obama is a fag for saying a small debt ceiling increase would be "kicking the can down the road." The debt ceiling is not a problem, not unless you're a profligate spending crony rewarding politician it isn't. The debt ceiling is a solution, a guard rail, a protection. A small raise isn't "kicking the can down the road" it is preserving the protection the ceiling provides, protection against fags like him. Kicking the can down the road is doing things like not passing a budget, or ignoring your own debt commission while name dropping them and saying you want to use their ideas, only you don't actually do so, because you're a doubletalking fag.

[Parkbandit]

Ah yes, McCain is a closet liberal progressive who just masqueraded as a racist, homophobic militaristic right winger.

Your raging stupidity aside, McCain lost the economy battle against Obama during the 2008 Presidential campaign... so his economic adviser is an idiot in my book.

[TheEschaton]

Whoa, someone hates fags. ;)

P.S. McCain might have been something else, but HE'S the hypocrite who went from moderate Republican to Bush 2.0. And yes, his position on immigration had no reason or logic behind it, but reeked of racism.

[Parkbandit]

Whoa, someone hates fags. ;)

P.S. McCain might have been something else, but HE'S the hypocrite who went from moderate Republican to Bush 2.0. And yes, his position on immigration had no reason or logic behind it, but reeked of racism.

Whoa, someone hates white people.

Which part of his position on immigration reeked of racism?

And just to make sure... you are talking about legal immigration as opposed to illegal immigration.

[crb]

The cry of "racist" against any person who advocates for secure borders is one of the biggest political strawmen in the last 20 years.

Wanting to secure our borders is not a racist stance. Oh, and Obama is a fag for saying "The wall is pretty much done." when it is only about 5%. Did you see that speech? The only way for him to have been more of a fag pandering for the hispanic vote would be if he had worn a dress and talked with a mexican accent.

[Kembal]

So, let's assume your blog is true... what do you believe the cost per job would be then? $250,000? $225,000? $200,000? No matter the metric, the Stimulus was an abysmal failure and spent money that our great grand kids will be on the hook for.

PS - And the fact that Mark Zandi was an economic adviser to McCain doesn't help your case, imo.

That's stupid accounting, sorry. You know better than that, you run a business. The cost of a project is not wholly determined by labor cost. Materials and other costs are included in the total figure. (Zandi makes the same point if you read the full link)

Whether Zandi was a good adviser to McCain is not the point of posting that info...it was more to point out that it was not a liberal economist making that point.

[crb]

And bob the miner has to mine the iron that goes into the steel that makes the rebar that is laid at the bottom of the concrete on the shovel ready highway job funded by the stimulus.

The supply chain is jobs too, and "jobs" was the chosen metric of the administration to justify their union crony payback stimulus. You don't think the rosy scenario lovers on Obama's economic team aren't counting every last person employed remotely by any stimulus funded project? They aren't just counting the guy digging the hole, or the 4 guys standing there watching him dig, they're also counting the lawyer who negotiated the mandated PLA for the project, and the guy who made the fucking shovel. You can just count jobs in the economy as a whole and the numbers are shitty.

First it was going to create millions of jobs, then it was going to create or save (an impossible to prove theory, I'll sell you a bracelet that saves you from lightning strikes, go prove me wrong), then it was going to prevent job losses (we would have been worse off without it, another impossible to prove theory).

The fact is, surprise, the government is the most inefficient spender of money known to man, and did not get good value for our dollars.

[Parkbandit]

That's stupid accounting, sorry. You know better than that, you run a business. The cost of a project is not wholly determined by labor cost. Materials and other costs are included in the total figure. (Zandi makes the same point if you read the full link)

What was the supposed reasoning behind the Stimulus package? To... {key word incoming}... stimulate the economy. How does one stimulate the economy? Well, the biggest factor is to get people employed. Employed people spend money.. pay taxes... ect...

If this wasn't touted as stimulus spending, you might have a point.



Whether Zandi was a good adviser to McCain is not the point of posting that info...it was more to point out that it was not a liberal economist making that point.

You mentioned that he was McCain's economic adviser to hope it added weight to his opinion.... and for many conservatives, it did just the opposite. When you allow a Keynesian liberal to own the economy debate the way Obama did.. you might want to check what advise your adviser is giving you... because it was terrible.

[Parkbandit]

The car bailout is set to turn a profit too.

:rofl: That would require some very, very creative accounting.. like I said:



NEW YORK (CNNMoney) -- U.S. taxpayers likely lost $1.3 billion in the government bailout of Chrysler, the Treasury Department announced Thursday.
The government recently sold its remaining 6% stake in the company to Italian automaker Fiat, wrapping up the 2009 auto bailouts that were part of TARP.

Fiat paid the Treasury a total of $560 million for the remaining shares, as well as rights to shares held by the United Auto Workers retiree trust.
Originally, the government committed a total of $12.5 billion to the struggling automaker, Old Chrysler and Chrysler Group. Of those funds, $11.2 billion has been returned through principal repayments, interest and cancelled commitments, the Treasury said. Chrysler paid back $5.1 billion in loans in May.
Even though that means $1.3 billion will not be recovered, the Treasury called it a "major accomplishment."
"With today's closing, the US government has exited its investment in Chrysler at least six years earlier than expected," Tim Massad, Treasury assistant secretary for financial stability said in a release

As part of the loan agreement, Chrysler was given until 2017 to return the bailout funds. If it had taken the full term, the interest accrued on the loans would have significantly reduced the government's losses.

General Motors (GM, Fortune 500) has already repaid loans it received from the bailout, but the Treasury still owns about one-third of GM's shares, worth approximately $16 billion.
The news comes as all of the "Detroit Three" automakers have reported a slight comeback in auto sales.
General Motors recently said total U.S. sales rose 11% year-over-year in June, and Ford (F, Fortune 500) reported a 14% increase.
Chrysler said sales jumped 40% in June, its best month since 2007, before it declared bankruptcy.

http://money.cnn.com/2011/07/21/autos/chrysler_government_exit/index.htm?cnn=yes&hpt=hp_t2

[Cephalopod]

Wait... so we lost $1.3b on Chrysler, broke even on GM (loans repaid) and still own $16b in GM stock? That seems like a potential profit?

[Parkbandit]

Wait... so we lost $1.3b on Chrysler, broke even on GM (loans repaid) and still own $16b in GM stock? That seems like a potential profit?

You went to TheE School of Creative Accounting.

We will have been repaid by GM.. when we sell the stock in the company when the price is over $53.00.

[Parkbandit]

For those people who still believe we turned a profit in bailing out GM:


The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.'s steep stock decline.

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.
The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The big increase is a reflection of the sharp decline in the value of GM's share price.

The current estimate of losses is based on GM's Sept. 30 closing price of $20.18, down one-third over the previous quarterly price.

GM's stock closed Monday at $22.99, up 2 percent. The government won't reassess the estimate of the costs until Dec. 30.

The government has recovered $23.2 billion of its $49.5 billion GM bailout, and cut its stake in the company from 61 percent to 26.5 percent. But it has been forced to put on hold the sale of its remaining 500 million shares of stock.

The new estimate also hikes the overall cost of the $700 billion Troubled Asset Relief Program costs to taxpayers. TARP is the emergency program approved by Congress in late 2008 at the height of the financial crisis.

In total, the government used $425 billion to bailout banks, insurance companies and automakers, and provided $45 billion in housing program assistance.

The government now expects to lose $57.33 billion, including the full cost of
the housing program, up from $36.7 billion. The new estimate means the government doesn't believe it will make an overall profit on its bailouts.
Republican presidential candidates, including former Massachusetts Gov. Mitt Romney, have seized on the auto bailout losses estimates, as evidence that the Bush and Obama administrations "wasted" money.

Matt Anderson, a spokesman for the Treasury Department, said, "Both TARP and the auto industry rescue are still on track to cost a fraction of what was originally expected during the dark days of the financial crisis."

In 2009, the government initially forecast it would lose $44 billion on its auto industry bailout. It revised it down to $30 billion, and later to as low as $13.9 billion earlier this year.The administration and President Barack Obama have argued that any losses on the auto bailout were worth the hundreds of thousands of jobs saved.

"The investment paid off. The hundreds of thousands of jobs that have been saved made it worth it," he said at an appearance last month at GM's Orion Assembly plant. "I want to especially thank the people of Detroit for proving that, despite all the work that lies ahead, this is a city where a great American industry is coming back to life and the industries of tomorrow are taking root, and a city where people are dreaming up ways to prove all the skeptics wrong and write the next proud chapter in the Motor City's history."
The new bailout forecast also represents an increase in the government's forecast in its losses from its $17.2 billion bailout of Detroit-based auto and mortgage lender Ally Financial Inc. The government holds a 74 percent stake in Ally, which has been forced to put its planned initial public offering on hold because of market conditions.


From The Detroit News: http://detnews.com/article/20111114/AUTO01/111140434/U.S.-boosts-estimate-of-auto-bailout-losses-to-$23.6B#ixzz1dtQvxtW0

[Back]

Thanks for the great news Captain Buzzkill.

[Methais]

Thanks for the great news Captain Buzzkill.

You're not getting the dividend that you mentioned in your OP. You killed your own buzz.

[Parkbandit]

Thanks for the great news Captain Buzzkill.

You might want to question why you are buzzed at 1:00 in the afternoon on a Wednesday......

[Back]

You might want to question why you are buzzed at 1:00 in the afternoon on a Wednesday......

You might want to question why you are such a grump ass at 1:00 in the afternoon on a Wednesday......

[Methais]

The only way for him to have been more of a fag pandering for the hispanic vote would be if he had worn a dress and talked with a mexican accent.

Like this?

http://www.youtube.com/watch?v=45IETGP2el8

It's Puerto Rico, but whatever.

[Atlanteax]

That is probably due to working a meaningful job at 1:00 in the afternoon on a Wednesday.

Hint: it is not yet Friday.

[Back]

That is probably due to working a meaningful job at 1:00 in the afternoon on a Wednesday.

Hint: it is not yet Friday.

No shit Sherlock. Not all of us slave at 9-5’s.

Wednesday is no different than Sunday depending on your responsibilities. Cheers.

[crb]

The car bailout is set to turn a profit too.
Thanks for bumping this thread so I could ROFL all over this post.

GM's stock would need to double for the government just to break even.

[Methais]

I'm set to gain superpowers one day.