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Tue Dec 11, 2012, 07:40 AM

TARP program now more than 90% repaid

Source: MarketWatch

The U.S. Treasury said Tuesday more than 90%, or about $380 billion, of the $418 billion spent under the Troubled Asset Relief Program (TARP) during the financial crisis as been recovered through repayments and other income. The update came after the Treasury said it'll raise about $7.6 billion by selling its final batch of common stock in American International Group Inc

Read more: http://www.marketwatch.com/story/tarp-program-now-more-than-90-repaid-us-2012-12-11?link=MW_home_latest_news



http://www.marketwatch.com/story/us-treasury-selling-234-mln-shares-of-aig-2012-12-11
Treasury selling 234 mln shares in final AIG sale

20 replies, 2331 views

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Reply TARP program now more than 90% repaid (Original post)
cal04 Dec 2012 OP
Fedaykin Dec 2012 #1
Lucky Luciano Dec 2012 #2
Fedaykin Dec 2012 #11
bhikkhu Dec 2012 #3
Fedaykin Dec 2012 #10
bhikkhu Dec 2012 #12
Fedaykin Dec 2012 #19
bvar22 Dec 2012 #4
closeupready Dec 2012 #5
Lucky Luciano Dec 2012 #6
Dokkie Dec 2012 #7
karynnj Dec 2012 #13
JackRiddler Dec 2012 #18
bhikkhu Dec 2012 #14
midnight Dec 2012 #8
fasttense Dec 2012 #9
bhikkhu Dec 2012 #15
JackRiddler Dec 2012 #17
JackRiddler Dec 2012 #16
Fedaykin Dec 2012 #20

Response to cal04 (Original post)

Tue Dec 11, 2012, 08:16 AM

1. Now all we need to recover is the 16 Trillion

 

Last edited Wed Dec 12, 2012, 12:32 AM - Edit history (2)

...the FED lent to banks here and abroad!
Please note I have amended my post above because I learned that the Monetary Control Act of 1980 says that a U.S. branch or agency of a foreign bank that maintains reserves at a Fed bank may receive discount-window credit.

So it was legal. That the Federal Reserve is indirectly funneling loans to foreign banks is hardly surprising. That European and other foreign banks were the main beneficiaries is nothing surprising too (from a NYT article):

Donald L. Kohn, the Fed’s vice chairman during the crisis, said that many foreign banks needed dollars to meet their financial obligations. The Fed arranged swaps with central banks in other countries to provide dollars, but the flow was insufficient...

For your further edification:

Senator Sanders dug out more information from the FED audit:

Fed Board Member Conflicts Detailed by GAO: Banks and Businesses Took $4 Trillion in Bailouts

June 12, 2012

WASHINGTON, June 12 - "More than $4 trillion in near zero-interest Federal Reserve loans and other financial assistance went to the banks and businesses of at least 18 current and former Federal Reserve regional bank directors in the aftermath of the 2008 financial collapse, according to Government Accountability Office records made public for the first time today by Sen. Bernie Sanders..."
http://www.sanders.senate.gov/newsroom/news/?id=3cbb0ca8-b025-406a-a669-aa89bec0b4e4
"...To read a report summarizing the new GAO information, click here: http://www.sanders.senate.gov/imo/media/doc/061212DimonIsNotAlone.pdf "

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Response to Fedaykin (Reply #1)

Tue Dec 11, 2012, 08:21 AM

2. There was no $16T cash given.

Most of that was short term guarantees that no longer exist. TARP was cold hard cash.

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Response to Lucky Luciano (Reply #2)

Tue Dec 11, 2012, 11:42 PM

11. Here check this out... I wasn't referring to TARP

 

Alan Grayson Says Every Man, Woman and Child Gave Almost $100,000 to Banks

By: Sarah JonesNovember 29th, 2011

"A little Alan Grayson on the fed’s trillions of bank loans.

The newly discovered trillions loaned to the banks are not related to the TARP money and had no strings attached to it like TARP did. Grayson says every man, woman, and child in America paid almost $100,000 to the banks.These same banks then lobbied to keep regulations at bay. They got bailed out by our money and we got sold out by them.

Remember when we bailed out the banks but they didn’t tell us which banks needed the help, because they wanted to protect the banks. Tens of billions of dollars in loans were also used by the banks in emergency loans that were kept a secret. Yes, you recall them telling us that they were solid so that their investors didn’t pull out. Well, on top of all of that, they also took advantage of the fed’s lower rates.

Former U.S. Rep. Alan Grayson (D-FL) tells Keith how an audit of the Federal Reserve shows that the agency “play Russian roulette” with the U.S. dollar over the course of more than $26 trillion worth of bank bailouts.

Grayson points out that we paid almost $100,000 per man, woman and child in America to bail these banks out without any congressional authorization. We paid them $100,000 and they can’t cut us a break. They wouldn’t even be in business if it weren’t for the American taxpayer. The fed also played favorites with the institutions (goodbye free market claims).
http://www.politicususa.com/alan-grayson-says-every-man-woman-and-child-gave-almost-100000-to-banks.html

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Response to Fedaykin (Reply #1)

Tue Dec 11, 2012, 10:24 AM

3. You might want to fact check that!

One of those nutty claims that sounds "too good to be true" if you're looking for a quick fix of anger.

The TARP program was a big risk that the administration took, but it worked as it was designed to, and cost much less than expected.

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Response to bhikkhu (Reply #3)

Tue Dec 11, 2012, 11:23 PM

10. Wasn't referring to TARP

 

I said, now we can focus on getting the $16 Trillion back... Want citation?
https://www.commondreams.org/headline/2011/08/28-3
First Federal Reserve Audit Reveals Trillions in Secret Bailouts
by Matthew Cardinale

"The first-ever audit of the U.S. Federal Reserve has revealed 16 trillion dollars in secret bank bailouts and has raised more questions about the quasi-private agency’s opaque operations.

7000 metric tons of gold bars sit in the gold vault inside the Federal Reserve Bank of New York "This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else," U.S. Senator Bernie Sanders, an Independent from Vermont, said in a statement.

The majority of loans were issues by the Federal Reserve Bank of New York (FRBNY)..."

Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts
Posted about 509 days ago | 19 comments

"The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the left), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments..."
http://www.unelected.org/audit-of-the-federal-reserve-reveals-16-trillion-in-secret-bailouts



Bernie Sanders Exposes 18 CEOs who took Trillions in Bailouts, Evaded Taxes and Outsourced Jobs

By: Jason EasleyOctober 25th, 2012
"Sen. Bernie Sanders fired back at 80 CEOs who wrote a letter lecturing America about deficit reduction by released a report detailing how 18 of these CEOs have wrecked the economy by evading taxes and outsourcing jobs.

80 CEO’s raised the ire of Sen. Sanders by publishing a letter in the Wall Street Journal urging America to act on the deficit, and reform Medicare and Medicaid.

Sen. Sanders responded to the lecture from America’s CEO’s by releasing a report that detailed how 18 of them have helped blow up the deficit and wreck the economy by outsourcing jobs and evading US taxes..."

"...Many of the CEO’s who signed the deficit-reduction letter run corporations that evaded at least $34.5 billion in taxes by setting up more than 600 subsidiaries in the Cayman Islands and other offshore tax havens since 2008. As a result, at least a dozen of the companies avoided paying any federal income taxes in recent years, and even received more than $6.4 billion in tax refunds from the IRS since 2008.

Several of the companies received a total taxpayer bailout of more than $2.5 trillion from the Federal Reserve and the Treasury Department..."
http://www.politicususa.com/bernie-sanders-exposes-18-ceos-trillions-bailouts-evaded-taxes-outsourced-jobs.html

This is what I am referring to...

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Response to Fedaykin (Reply #10)

Wed Dec 12, 2012, 12:03 AM

12. I read the report, and those were loans, not gifts

...consistent wit the purpose and authority of the Fed.

If there were no losses, and if they followed the rules, and if the accounting and reporting all stood up to scrutiny under the audit process, then why would you look at another agency that basically did its job, and say that they need to pay back $16 trillion dollars? When that isn't remotely what happened, and that isn't what the audit said at all?

The audit, btw, for anyone not inclined to read it ( here: http://www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf ), finds no fault other than that, in spite of things turning out fine, the risks might have been managed and accounted for better. For anyone who remembers 2008/09, the best way to manage that risk is to avoid it in the first place - good governance and honesty in government is essential.

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Response to bhikkhu (Reply #12)

Wed Dec 12, 2012, 12:56 AM

19. Thank you

 

Yes, I have since amended my post above after learning that it was all seemingly legal.
There is some question as to whether The Money Control Act is constitutional.
As an aside, at the 2009 Congressional hearing, then-Congressman Alan Grayson caught Bernanke in a clear misrepresentation:

Bernanke again claimed that the authority (to lend to foreign banks) had been used numerous times before.

Grayson debunked this claim by pointing to Bernanke’s own report, which stated that the entire amount had been handed out starting from the last quarter of 2007, and the amount given out before that to foreign banks was zero.
Watch the clip below.


Bernanke said the Fed had a “long standing legal authority” to hand money to foreign banks under section 14 of the Federal Reserve Act, a claim contradicted by Bernanke’s own report, as Grayson soon highlighted. The NYT article graciously bailed Mr. Bernanke out by mentioning the 1980 Money Control Act, which still remains possibly unconstitutional.



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Response to cal04 (Original post)

Tue Dec 11, 2012, 01:05 PM

4. How can that be?

I have read repeatedly on DU that ALL the Tarp Funds plus Interest
were repaid years ago.

I wonder what the TRUTH is.

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Response to bvar22 (Reply #4)

Tue Dec 11, 2012, 01:15 PM

5. Thank you. I was just going to say exactly the same thing.

For years now, many 'experts' on DU have told us that TARP has been paid back with interest, and that it actually made the Treasury money.

Now, this story reports that TO DATE, only 90% has been paid back.

So WHAT IS THE REAL NUMBER? 90%? 75%? 50%?

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Response to closeupready (Reply #5)

Tue Dec 11, 2012, 01:26 PM

6. 90% paid back does not mean that

those parts not yet paid back ate worth zero.

The GM shares are well below breakeven, but they have value. Fannie and Freddie as well etc.

The stuff paid back by the banks, AIG, etc were profitable.

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Response to closeupready (Reply #5)

Tue Dec 11, 2012, 02:23 PM

7. And what %age

 

of that money paid back is in mortgage securities? Also consider the fact that most of those financial institution were given tax breaks while they were getting back on their feet. Paying out record bonuses.

Don't believe the hype

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Response to closeupready (Reply #5)

Wed Dec 12, 2012, 12:18 AM

13. The confusion is that there have been many stories that bank X paid back everything - and a profit

was made. This ends up being repeated as the bankS repaid all the money and a profit was made. Clearly there are still some banks --- if they still exist, that did NOT repay everything. I know AIG was long one place where the money was not repaid - and now it is. One question I haven't seen an answer to is are future payments still being made and what is the expected total payback.

Sill, it is true that with 90% plus paid back, the cost was less than feared in 2008. One thing that should have been included was some fines on the very rich people who made the decisions that nearly collapsed the world's economy - in addition to paying back the loans and interest.

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Response to karynnj (Reply #13)

Wed Dec 12, 2012, 12:54 AM

18. Hooray! Godzilla lives!

Godzilla was almost dead. What would the citizens have done without his guiding hand? Now, thanks to the rescue plan, he's destroying more of Tokyo than ever. And he's paid back most of his rescue debt! Hooray!

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Response to closeupready (Reply #5)

Wed Dec 12, 2012, 12:24 AM

14. AIG was one weak point

The TARP program as it applied to the banking sector was all paid back with interest. Most of that was short term loans.

AIG was "rescued" by a large purchase of its stock, which is much more risky and hard to unwind. That's not a loss or a gain until the stock is sold, though it is a risk, of course. The GM bailout was similar. From a taxpayers standpoint, its good to hear the company is sound, the stock value is up, and that we can exit the market.

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Response to cal04 (Original post)

Tue Dec 11, 2012, 03:08 PM

8. Through April 30 the government has made commitments of about $12.2 trillion & spent $2.5 trillion

Adding Up the Government’s Total Bailout Tab
Beyond the $700 billion bailout known as TARP, which has been used to prop up banks and car companies, the government has created an array of other programs to provide support to the struggling financial system. Through April 30, the government has made commitments of about $12.2 trillion and spent $2.5 trillion — but also has collected more than $10 billion in dividends and fees. Here is an overview, organized by the role the government has assumed in each case.


https://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html

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Response to cal04 (Original post)

Tue Dec 11, 2012, 03:27 PM

9. No not 90%

"The Bailout Scorecard
Last update: Dec. 10, 2012

Altogether, accounting for both the TARP and the Fannie and Freddie bailout, $605 billion has gone out the door—invested, loaned, or paid out—while $348 billion has been returned.

The Treasury has been earning a return on most of the money invested or loaned. So far, it has earned $93.1B. When those revenues are taken into account, $163.6B is the net still outstanding as of Dec. 10, 2012."

That's only 73% paid back.

Here's a site that tracks the real numbers: http://projects.propublica.org/bailout/main/summary

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Response to fasttense (Reply #9)

Wed Dec 12, 2012, 12:35 AM

15. I wish that website were more clear

It details exactly where the money went out to and how much, but then when it shows inflows, its just a lump sum with no details.

The one thing that can be taken wrong is that part of the program "bailouts" wasn't gifts or loans, it was the purchase of assets and stock. In the case of GM, the stock purchases were intended to be medium-term, as long as it took to stabilize the markets and the companies, and then it would be sold on the open market. That has gone pretty well, as the health of GM and the sale of AIG stock indicates.

As far as Fannie and Freddie, those were more long-term purchases of mortgage assets . Which should take a very long time to sort out.

Its not a simple matter of giving money and waiting for it to come back; most of that is more like buying something with money, and then keeping it until its a good time to sell.

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Response to fasttense (Reply #9)

Wed Dec 12, 2012, 12:53 AM

17. So if the taxpayers had rescued the Mexican cartels and the Gambino family...

and if said august institutions then paid back "most" of the rescue costs, it would be good news, at least by the standard being applied here.

Of course, the Mexican cartels and the Gambino family never engaged in speculation that caused food prices to spike with resultant mass starvation and deadly riots around the world, like Goldman Sachs and JPM Chase did in 2008, so it would have been morally more defensible to rescue them than to rescue Goldman Sachs.

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Response to cal04 (Original post)

Wed Dec 12, 2012, 12:48 AM

16. And?

The criminal class who created the fraud and crash and most of its gangster institutions were rescued! Thanks to all the additional bailout mechanisms through the non-TARP bailouts, Fed/QEs, ZIRP and such, they have more hegemony over the economy than ever, suck more profits out of the productive sectors than ever, and continue to build up inestimable risks through a private derivatives market in the tens of trillions. This is "good news," everyone! Until the next crash! Hip hip! Hooray!

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Response to JackRiddler (Reply #16)

Wed Dec 12, 2012, 01:38 AM

20. Love the tongue in cheek...

 

Jack.

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