Study Finds Bank Bailouts Profitable for U.S.

[sabra]

Source: ABC News/Reuters

CHARLOTTE, North Carolina (Reuters) - A government program to bail out banks at the height of the financial crisis has so far turned a profit, according to a report by investment bank Keefe, Bruyette & Woods Inc.

The Capital Purchase Program, part of the $700 billion Troubled Asset Relief Program, has generated an average return of 10 percent on the initial investment in 61 banks that have fully repaid the aid, said the report, issued on Wednesday.

"Its pretty clear that unless the economy just craters, the bank portion of TARP will be profitable," said Fred Cannon, bank analyst with Keefe, Bruyette and Woods.

About $137 billion, or two-thirds of the initial government investment, has been paid back, with $65 billion still to be repaid, the report said.

The often controversial program injected taxpayer funds into 707 banks nationwide in an effort to prop up the financial system at the height of the crisis in 2008 and 2009.

Read more: http://abcnews.go.com/Business/wireStory?id=11109378

[jpak]

1. Not only did it save us from a Great Depression - it paid 10% interest

not bad

[Ruby the Liberal]

2. 10% return?

Impressive.

[msongs]

3. umm if it has not gotten back ALL the money spent + extra it is NOT profitable nt

[Romulox]

6. Also, the government gave out WAY more than $700B, but let's pretend otherwise, OK?

:shrug:

[Iowa]

14. Yep... this is nothing but smoke and mirrors.

[truedelphi]

4. No mention of the tax break offered to the banks who paid us back

On those "gifts," while those tax breaks add to the deficit.

No mention of banks who applied for new funds to pay back TARP Bailout monies.

And no mention of the fact that all this went into the coffers of the Big Banks, while community banks struggle, while those in the community of middle class means must use their nine percent plus American Express cards to keep their businesses going.

No mention of how the banking crisis wipes out small businesses, while the monies go to help the bankers BET AGAINST THE ECONOMIES OF SMALL NATIONS. Because of those bets, Bernanke is now busy bailing out his European banker friends. (We won't ever trace that activity,a s Bernie Sanders "Audit the Fed" Act was so watered down by the time it passed that it ahs lost a great deal of its meaning.)

Everything that was done hurt the "little people." Coming soon to a household near you: The government mandated Austerity Program. Say "GoodBye" to Food Stamps. Say "Goodby" to any meaningful Health Care Reform Of the Health Care Reform -- we will see more and more people not able to get the basics if they are on their local state or county programs. Already it takes nine months to be sen by a specialist here in Lake County Calif. So by the time your appointment day arrives, you might alr8eady kicking up daisies.

And Social Security will soon be the cat food of the day, if the Catfood Commission has its way.

[Oregone]

5. It magically cleansed the toxic assets too!

In fact, no one even mentions that term anymore! Poof! Gone! Banks Solvent. Government Profits. Recovery here.

[alllyingwhores]

7. Since when does $135 billion = two-thirds of $700 billion?

Uhm...that's only 19% of the 700 billion...which is only a fraction of the damage that they wreaked on the US and world economy...unemployment...foreclosures, extreme devaluation of homes, etc.

Wooooooooo 10% return on 19% of 0 interest or near 0 interest loans that they made huge instant profits on--much more than a 10 freakin percent return.,

How can this article even be factual? Aren't we still trying to force the assholes to divulge which banks got how much, under what criteria, and when??

[kirby]

8. And how much did the banks profit from this?

We taxpayers made a 10% profit? Did the banks make 1000% on that? Many owe their existence to the bailout.

[Wednesdays]

10. We DUers each made a 10% profit?

Who knew? :shrug:

[AlbertCat]

9. ording to a report by investment bank Keefe, Bruyette & Woods Inc.

Well, I don't know about you, but their word is good enough for me! They are an investment bank after all! No need to look into it further.

If 137 is 2/3's... then 3/3's is 205.5. So we made 10% profit on a small faction of the whole $700! Wow! That's just great! :eyes:



Just how stupid do they think we are?????

[jtuck004]

11. Note: This is a talking point which supports a Bush admin decision, but the total of the bailout

has been about 14.4 Trillion. Read more here, and here. Good reading here[br />
The back story of the bailout is detailed in Nomi Prin's book "It Takes A Pillage". This ought to be required reading, but be warned that it may make you very, very angry. If you borrow it from the library, please don't throw it through the fish tank. I think if most people spent a little time looking at the ins and outs detailed in the text and the references we would have a very different tomorrow.

A couple things to know when people try to get you to focus on this...

1) By carving out Tarp from the total package, it avoids talking about that being the starting point of a much larger amount that the taxpayers are on the hook for. In this way the Bush admin can look good, and Obama can be made to look bad. It was a contining effort sold to the new administration by some of the same people that started TARP.

2) It is often said the bailout saved the economy from collapse. What it saved was Goldman Sachs and several other investment banks and other firms. It was largely driven by previous Goldman Sachs employees and associates in government postions and the Federal Reserve, as well as people at Goldman Sachs.

If we had been serious about saving the economy and jobs we could have just fixed the mortgage problem. The total value of home mortgages in the U.S. at the time was about 13 Trillion dollars. The Bailout has cost us approximately 14 Trillion dollars. We could have instead purchased ALL the mortgage debt in the U.S. and refinanced it, leaving everyone in their homes for those that could make payments at low interest, and saved a Trillion and a half bucks for something else. But that would have let the investment banks fail, and a lot of very, very, holy-crap-you-have-how-much-money, wealthy people would have lost some.

But instead of holding those responsible who created the financial crisis by the selling and creation of CDO, SIV, and other investement vehicles leveraged at 30 to 40 times their value, using borrowed money to inflate the total to about $140 Trillion of pure nothing, we left them in place, put the American taxpayer on the hook for about $14.4 Trillion, and gave the banks much of this money. We also created programs which provide ongoing loans at rates lower than anyone else can get. This left the people who created the financial crisis through their carelessness and arrogance in place, allowing them to continue to collect tens of millions in bonuses each year, with no regulation that will prevent this from happening again. They have continued to recieve these bonuses while 31 million people (and growing) are unemployed and underemployed. (So why the resistance to spending, say, 2-4 Trillion to help Main Street, when there are 31 million people unemployed or underemployed? Maybe they could it up former Goldman Sachs employees who now work in the government such as Henry Paulson Jr., Neel Kashkari, Steve Shafran, Kendrick Wilson III, or Edward Forst to get them a job at Goldman Sachs. 'Cause there is just a river of money headed from the taxpayers to that place).

But, hey, at lesat we are making a few million on TARP, eh ;)

[girl gone mad]

12. Investment bank Keefe, Bruyette & Woods Inc. is full of shit.

We're out over $100B in TARP alone.

I won't even get into the rest of the 23 trillion in government backstops, loans and giveaways.

If your neighbor takes money out of your wallet to pay back a loan you gave him, you didn't just make a profit. Who taught these people accounting?

[Po_d Mainiac]

13. Who taught these people accounting? Whimpy