US to make profit from bailouts, Treasury says

[Back]

US to make profit from bailouts, Treasury says (http://www.bbc.co.uk/news/business-17720012)



The bank bailouts may result in a return of $2bn (£1.3bn), the Treasury said in its latest projections for the government's response to the crisis (http://www.treasury.gov/resource-center/data-chart-center/Documents/20120413_FinancialCrisisResponse.pdf).

And the recovering auto industry has added 230,000 jobs as a result.

The recession was the worst since the Great Depression and $19.2tn of wealth was wiped out, it said.

"Although the economy is getting stronger, we have a long way to go to fully repair the damage the crisis has left behind," the Treasury said.
"We are still living with the broader economic cost of the crisis, which can be seen in high unemployment."

The vast majority of the projected returns - more than $179bn - come from the Federal Reserve's huge investments and loans to banks.
The Fed and the Treasury together invested $182bn just to save insurance giant AIG.
Tarp In terms of the bank bailouts, the much-maligned Troubled Asset Relief Program (Tarp) that provided money to more than 700 banks has already realised a $19bn profit.
The bailout of carmakers General Motors and and Chrysler - which was also part of Tarp, cost $22bn, the Treasury said.

"But the cost of a disorderly liquidation to families and businesses across the country that rely on the auto industry would have been far higher," it added.

The US Treasury still owns more than 30% of GM's ordinary shares.

In the end, the Treasury expects to make $22bn from Tarp's bank bailouts and $2bn on Tarp's loans to restart the credit markets, offsetting the auto bailouts.


Glad there is some good news from all of this.

[Ryvicke]

Obvious lies coming from the ultra-liberal media puppet of the democratic party, the BBC.

[diethx]

Obvious lies coming from the ultra-liberal media puppet of the democratic party, the BBC.

http://mlkshk.com/r/2R0

[Ryvicke]

http://mlkshk.com/r/2R0

If you're not going to gay-liberal it up with me and Backlash or post hilariously misspelled conservative talking points GET OUT OF THIS THREAD, HARPY.

[Parkbandit]

So, Bush, who did TARP and the bank bailouts made money.. and Obama lost money with the car bailouts and "stimulus".

No one is surprised.

[Ryvicke]

So, Bush, who did TARP and the bank bailouts made money.. and Obama lost money with the car bailouts and "stimulus".

No one is surprised.

If by "did TARP" you meant signed the bill and then promptly left office while Obama and Geithner developed, administered and implemented the program then he indeed "did" it.

[Parkbandit]

If by "did TARP" you meant signed the bill and then promptly left office while Obama and Geithner developed, administered and implemented the program then he indeed "did" it.

:rofl:

If you say so. You might want to look up the term "promptly", "developed" and "implemented".

[Ryvicke]

:rofl:

If you say so. You might want to look up the term "promptly", "developed" and "implemented".

Did I at least use "administered" correctly? Or did you just leave it out so you didn't have to think about whether commas go inside or outside of quotation marks?

[Parkbandit]

Did I at least use "administered" correctly? Or did you just leave it out so you didn't have to think about whether commas go inside or outside of quotation marks?

You could make the argument that the Obama administration "administered" the program longer than Bush did. Given your other 3 bombs though, it was probably just dumb luck.

And seriously.. did anyone believe that the car bailouts would actually be paid back? It was handled extremely poorly.

[crb]

This isn't news, TARP has been profitable on the banking side for 2 or 3 years now. In fact, TARP was profitable and paid back when Obama was still blowing smoke chanting "We want our money back" constantly in speeches because it made good politics.

It is unlikely ever to be profitable on AIG or the auto companies.

Doesn't mean it was a good program though, but, to be fair, the big banks did pay it back with interest a long time ago.

[Atlanteax]

The banks probably paid back the TARP, in interest + principal, ahead of schedule... from jacking up fees and interest rates.

The consumer / tax-payer, still got the raw end of the deal.

[Parkbandit]

The banks probably paid back the TARP, in interest + principal, ahead of schedule... from jacking up fees and interest rates.

The consumer / tax-payer, still got the raw end of the deal.

How did I get the raw end of the deal... I paid lower interest rates and no additional fees?

[Suppa Hobbit Mage]

I took what was then a 26 year loan down to a 15 year loan with the same principle, lower rate, and lower payments. It was like something for nothing. I felt like I was getting an entitlement!

[Atlanteax]

I should had been more specific, I was referring to how banks utilized profit-generating revenue (more fees & higher rates) from the credit card / checking / etc side of the business to prop up the mortgage-side.

IIRC, this prompted Congress to pass some laws/regulations about how banks would abuse their customers in this faction.

[Back]

The interest on my mortgage has been 4.5% and lower over the past 7 years. Glad I went with that ARM.

[Suppa Hobbit Mage]

I should had been more specific, I was referring to how banks utilized profit-generating revenue (more fees & higher rates) from the credit card / checking / etc side of the business to prop up the mortgage-side.

IIRC, this prompted Congress to pass some laws/regulations about how banks would abuse their customers in this faction.

Oh, I don't carry any debt besides my house, so I wouldn't know.

[Suppa Hobbit Mage]

The interest on my mortgage has been 4.5% and lower over the past 7 years. Glad I went with that ARM.

You are paying 4.5% on an ARM?! My 15 year fixed rate is 3.55% I believe.

[Back]

You are paying 4.5% on an ARM?! My 15 year fixed rate is 3.55% I believe.

Thats what it was back in 06. It was around 3.5 last year. I haven't checked lately.

[Liagala]

Thats what it was back in 06. It was around 3.5 last year. I haven't checked lately.
Is my bank weird, or are you just oblivious? Every month, the first transaction line on my home equity line statement is the "change" in the interest rate (change is in quotes because it has remained the same since it was opened 2 years ago). I don't even have to scroll down to see it - 2.75% is right there, front and center.

[Back]

just oblivious

I honestly don't have time to sort through and open all my mail. Got more important things to do. Can't be bothered.

[AnticorRifling]

I honestly don't have time to sort through and open all my mail. Got more important things to do. Can't be bothered.

Very true, sides of computer cases won't remove themselves.

[Kembal]

This isn't news, TARP has been profitable on the banking side for 2 or 3 years now. In fact, TARP was profitable and paid back when Obama was still blowing smoke chanting "We want our money back" constantly in speeches because it made good politics.

It is unlikely ever to be profitable on AIG or the auto companies.

Doesn't mean it was a good program though, but, to be fair, the big banks did pay it back with interest a long time ago.

Until the banks actually fix the robo-signing mess, they're going to be an easy political target for any politician.

As for the auto companies, letting them go into liquidation would have been the most destructive use of physical assets of all time. Profit's nice, but the long term economic effects are the important thing to measure. Clusters of specialized physical machinery are hard to replicate. (see Thailand flooding and what it did to hard drive manufacturers to see that principle in action.)

[Parkbandit]

Until the banks actually fix the robo-signing mess, they're going to be an easy political target for any politician.

As for the auto companies, letting them go into liquidation would have been the most destructive use of physical assets of all time. Profit's nice, but the long term economic effects are the important thing to measure. Clusters of specialized physical machinery are hard to replicate. (see Thailand flooding and what it did to hard drive manufacturers to see that principle in action.)

Seriously.. who was calling for GM and Chrysler to be liquidated? No one.

What should have happened was the same thing that happens all the time.. bankruptcy and restructuring. But Obama / Dems didn't want to see that, since the restructuring would have hurt the unions.

[Kembal]

Seriously.. who was calling for GM and Chrysler to be liquidated? No one.

DIP financing was not available from private banks at that time (if you recall, they had their own issues to worry about). Had GM and Chrysler gone into bankruptcy without the government intervention provided, they would have been forced to liquidate.

So when you see Romney's op-ed from November 2008 (http://www.nytimes.com/2008/11/19/opinion/19romney.html), calling for a bankruptcy process without government intervention, either he's being completely ignorant, doing an exercise in political cynicism, or actually wanting to see them liquidated. And as the former CEO of Bain Capital, I expect him to know the state of the markets at that time, so ignorance is very hard to assume.

IMHO, there's not much of a difference between calling for a course of action that leads to liquidation (even if you didn't "mean it") and actually wanting liquidation to occur.


What should have happened was the same thing that happens all the time.. bankruptcy and restructuring. But Obama / Dems didn't want to see that, since the restructuring would have hurt the unions.

They went through a prepackaged bankruptcy, and last I checked, there were plant closings and divisions shed, which is the normal definition of restructuring to me. What else were you looking for?

[Parkbandit]

DIP financing was not available from private banks at that time (if you recall, they had their own issues to worry about). Had GM and Chrysler gone into bankruptcy without the government intervention provided, they would have been forced to liquidate.

So when you see Romney's op-ed from November 2008 (http://www.nytimes.com/2008/11/19/opinion/19romney.html), calling for a bankruptcy process without government intervention, either he's being completely ignorant, doing an exercise in political cynicism, or actually wanting to see them liquidated. And as the former CEO of Bain Capital, I expect him to know the state of the markets at that time, so ignorance is very hard to assume.

IMHO, there's not much of a difference between calling for a course of action that leads to liquidation (even if you didn't "mean it") and actually wanting liquidation to occur.

They went through a prepackaged bankruptcy, and last I checked, there were plant closings and divisions shed, which is the normal definition of restructuring to me. What else were you looking for?

Do you have a source on if the government didn't step in then they would have had to liquidate? Sounds like your wild speculation is on steroids again.

[Stabbyrogue]

The only thing I took from this thread is how fucking annoying PB's retarded comments can really be.

(No, I didn't read past the first page.)

[Parkbandit]

The only thing I took from this thread is how fucking annoying PB's retarded comments can really be.

(No, I didn't read past the first page.)

Fantastic input.

Really.

[Hulkein]

The only thing I took from this thread is how fucking annoying PB's retarded comments can really be.

(No, I didn't read past the first page.)

Time to adjust your settings to allow for more posts per page you newb.

[Ryvicke]

PB--it's hilarious reading your posts in this thread because I'm actually pretty positive that you basically have no fucking clue what happened. Pretty much every assertion you've made has been factually incorrect. Not even on a splitting hairs type level, just on a straight-up fact of what happened level.

Who said they would completely liquidate? They did. Over and over and over. Google if you want the quotes, old man.

You think they should've done what everyone else does and go into bankruptcy and restructure? Oh shit guy, that's exactly what they did. Pick up the newspaper every once in awhile, or at least learn how to google before you spew nonsense all over the front of your shirt--Kembal can't be around all the time to wipe that up.

[~Rocktar~]

PB--it's hilarious reading your posts in this thread because I'm actually pretty positive that you basically have no fucking clue what happened. Pretty much every assertion you've made has been factually incorrect. Not even on a splitting hairs type level, just on a straight-up fact of what happened level.

Who said they would completely liquidate? They did. Over and over and over. Google if you want the quotes, old man.

You think they should've done what everyone else does and go into bankruptcy and restructure? Oh shit guy, that's exactly what they did. Pick up the newspaper every once in awhile, or at least learn how to google before you spew nonsense all over the front of your shirt--Kembal can't be around all the time to wipe that up.


Yeah, but they didn't restructure under the federal bankruptcy code like other companies, they did it under the Obama special bankruptcy, pay off union obligations before material debtors and circumvent federal fucking bankruptcy law plan moron. Followed by a flat out handout to the autoworkers union by the "cash for clunkers" program that crippled the used car and parts market for years along with being flatly punishing to the working poor who typically buy older used cars since they can't afford new ones. Pull your head out of your ass/someone else's ass/where ever you have it buried and stop making Backrash look good in comparison. At least his trolling is sometimes funny, yours is simply pathetic.

Speaking of Google, you could use some work in that area as well.

Here is a rather lengthy article on the dubious at best legality of the whole auto bailout and bankruptcy. So, pretty much your whole story is a white wash of the facts and in many cases a fabrication of what really happened. Go ahead, read the article and maybe learn something though I don't hold out much hope since your brain has been oxygen deprived for so very long in that warm dark place you keep it.

http://www.nationalaffairs.com/publications/detail/the-auto-bailout-and-the-rule-of-law

[Kembal]

Do you have a source on if the government didn't step in then they would have had to liquidate? Sounds like your wild speculation is on steroids again.

Additional link on people calling for GM to be liquidated:
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/10/AR2009071001473.html?sid=ST2009071002081

Links to articles about how GM and Chrysler could not get financing:
http://autos.yahoo.com/blogs/motoramic/mitt-romney-gets-wrong-detroit-automakers-bailouts-154006392.html


The crux of Romney's argument: If Obama had not acted, private companies would have stepped in and run a "managed bankruptcy." What this ignores is that in the fall of 2008, before Obama was even sworn in, no one on Wall Street or anywhere else was willing to lend GM and Chrysler a penny — let alone the $81 billion they and their financial arms eventually needed.

Both companies' bankruptcies required money on a scale not seen in legal history. Unlike airlines, which can keep running with much smaller short-term loans while they restructure, automakers need massive amounts of up-front capital to pay suppliers and workers while they build cars; their finance companies need even more to keep making car loans that can bring in revenues. The potential damage wasn't just layoffs; Chrysler executives testified on the first day of bankruptcy that without immediate cash the company risked destroying hundreds of millions of dollars' worth of equipment.

Even after Obama took office, GM and Chrysler searched frantically for paths to avoid bankruptcy, including a possible merger. Chrysler held a one-week garage sale of its assets in February 2009, inviting anyone with enough money to bid for parts of the company. No one bit.

http://www.economist.com/blogs/democracyinamerica/2012/02/mitt-romney-and-car-industry


As with much of Mr Romney's excessive rhetoric, there is some truth to this statement. Following the bail-outs, the president eventually forced Chrysler and GM into bankruptcy, a step Mr Romney thought should occur naturally. And the government oversaw painful restructurings at both companies, which were largely in line with Mr Romney's broad suggestions. But the course Mr Romney recommended in 2008 began with the government stepping back, and it is unlikely things would've turned out so well had this happened.

Free-marketeers that we are, The Economist agreed with Mr Romney at the time. But we later apologised for that position. "Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk", we said. But "given the panic that gripped private purse-strings...it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended." Even Ford, which avoided bankruptcy, feared the industry would collapse if GM went down. At the time that seemed like a real possibility. The credit markets were bone-dry, making the privately financed bankruptcy that Mr Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along.

I can post more, if you like.

[Parkbandit]

PB--it's hilarious reading your posts in this thread because I'm actually pretty positive that you basically have no fucking clue what happened. Pretty much every assertion you've made has been factually incorrect. Not even on a splitting hairs type level, just on a straight-up fact of what happened level.

You mean no fucking clue.. like you had about TARP? I demand an apology... no one but you could be THAT fucking clueless.



Who said they would completely liquidate? They did. Over and over and over. Google if you want the quotes, old man.

It's above your understanding... aka it's at least at a 3rd grade reading level. Let the adults talk now.. go play with your toys, child.



You think they should've done what everyone else does and go into bankruptcy and restructure? Oh shit guy, that's exactly what they did. Pick up the newspaper every once in awhile, or at least learn how to google before you spew nonsense all over the front of your shirt--Kembal can't be around all the time to wipe that up.

This paragraph explains how utterly ignorant you are on the entire process. Seriously... go find Mommy and ask her to put "Barney" on for you.

[Parkbandit]

Additional link on people calling for GM to be liquidated:
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/10/AR2009071001473.html?sid=ST2009071002081

Links to articles about how GM and Chrysler could not get financing:
http://autos.yahoo.com/blogs/motoramic/mitt-romney-gets-wrong-detroit-automakers-bailouts-154006392.html

http://www.economist.com/blogs/democracyinamerica/2012/02/mitt-romney-and-car-industry


Ah, nice post. I don't agree with the premise, but this seriously was the first time I heard that without the government, there was a chance they would have been liquidated.

Here's my problems with the entire bailout... we lost money to a private company.. which should never happen. We allowed them to stay in business.. all we ask is that we get our initial investment back. Period. You made huge profits last quarter... time to buy some of the stock back from us at the $53 price until you owe us nothing.

And the other problem is: I don't like how the investor got the complete shaft.. while the unions actually were given a lion share of the company.

[Ryvicke]

You mean no fucking clue.. like you had about TARP? I demand an apology... no one but you could be THAT fucking clueless.

It's above your understanding... aka it's at least at a 3rd grade reading level. Let the adults talk now.. go play with your toys, child.

This paragraph explains how utterly ignorant you are on the entire process. Seriously... go find Mommy and ask her to put "Barney" on for you.

Ha! I'll take your geriatric babbling since it gives you an excuse to supplicate yourself to Kembal while at the same time giving me shit, even though you've been wrong the entire thread. Your cred is intact, boss, just try to check them facts before you spew up the bullshit.

[Parkbandit]

Ha! I'll take your geriatric babbling since it gives you an excuse to supplicate yourself to Kembal while at the same time giving me shit, even though you've been wrong the entire thread. Your cred is intact, boss, just try to check them facts before you spew up the bullshit.

Irony, given your posts in this and most threads.

Seriously, isn't Dora the Explorer on right now? Something your speed you can actually understand?

[Kembal]

Ah, nice post. I don't agree with the premise, but this seriously was the first time I heard that without the government, there was a chance they would have been liquidated.

Here's my problems with the entire bailout... we lost money to a private company.. which should never happen. We allowed them to stay in business.. all we ask is that we get our initial investment back. Period. You made huge profits last quarter... time to buy some of the stock back from us at the $53 price until you owe us nothing.

And the other problem is: I don't like how the investor got the complete shaft.. while the unions actually were given a lion share of the company.

The proper use of nationalization (as opposed to Venezuela and Chavez, or hell, Argentina for that matter) is when you have no other choice, and to not do so would wreak major damage on the economy. Taken in that light, I'm not one to quibble regarding losses. The alternative would've been far worse. We'll have to agree to disagree there.

The UAW aspect of the bankruptcy is interesting, and if you look at the claims they had due to the health care obligations, they were a fairly large unsecured creditor. Whether that means they should've beat out the bondholders is a different story altogether, but it's not one I have time to discuss further right now...

[Androidpk]

So.. profitable or not?

http://www.huffingtonpost.com/2012/04/25/tarp-profit-a-myth_n_1450363.html

[Parkbandit]

Is it my imagination.. or has the normally left leaning media suddenly begun to criticize Obama more and more lately? I've noticed it while watching NBC and CBS "news" more and more.

CONSPIRACY THEORY TO FOLLOW:

It's as if they are trying to get Obama to lose the next election.. get Romney in for 1 term.. then perhaps get Hillary Clinton to run in 2016. They must know that if Obama wins this year, there is very little chance of Hillary winning the election in 2016 and instead of taking a chance on a 12 year wait, they are going for a 4 year wait...

[~Rocktar~]

Hillary should be intelligible, you can only be president for 2 terms after all.

[Kembal]

Is it my imagination.. or has the normally left leaning media suddenly begun to criticize Obama more and more lately? I've noticed it while watching NBC and CBS "news" more and more.

CONSPIRACY THEORY TO FOLLOW:

It's as if they are trying to get Obama to lose the next election.. get Romney in for 1 term.. then perhaps get Hillary Clinton to run in 2016. They must know that if Obama wins this year, there is very little chance of Hillary winning the election in 2016 and instead of taking a chance on a 12 year wait, they are going for a 4 year wait...

Tinfoil hat territory.

As far as Obama being criticized, natural consequence of having a Republican nominee for president now. Media wants a close race to drive up ratings.

[Parkbandit]

Tinfoil hat territory.

Oh, I agree.



As far as Obama being criticized, natural consequence of having a Republican nominee for president now. Media wants a close race to drive up ratings.

Even to the point where "their" candidate loses? What type of Progressive would put profits above party????