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The "profit" is nothing but some of the value savers lost to inflation. Besides, much of the principal is leveraged on more unstable debt. Money created out of toxic debt and "repaid" will be meaningless when the world dumps the dollar as toilet paper.
The "profit" is nothing but some of the value savers lost to inflation. Besides, much of the principal is leveraged on more unstable debt. Money created out of toxic debt and "repaid" will be meaningless when the world dumps the dollar as toilet paper.
I happen to agree about the automakers. The money given to GM and Chrystler is more than likely gone forever, and never should have been given in the first place. The was a true bailout, and was as much about the UAW union as it was the automakers. As bad as it would have been for the workers, and those of other related companies such as auto parts manufacturers, these two incompetent companies should have been allowed to fail.
The bailout loans given to banks was really more like a very expensive loan program, and I believe most institutions who were given TARP funds will eventually repay it, and will continue to pay the government dividends on it in the meantime. Of course, some will fail and the investments in those banks will be lost, but overall, the TARP program will be very profitable for the government. The article I linked above states $4 billion in profits from the big banks and another $35 million from smaller banks. I believe that the governments 34% stake in Citi is currently worth around $12 or $13 billion more than the original $45 billion that Citi took, at it's current share price. Also, Bank Of America, who took $45 billion in TARP funds, pays the government over $700 million per quarter in prefered share dividends related to the TARP investment. At this rate, the taxpayer should hope Bank Of America NEVER pays back their TARP. Here is their press release from the end of Q2 announcing the government dividend payment, which they also paid in April (Q1), and will pay again in Sept (Q3).
Fannie Mae and Freddie Mac are pigs of a different oink, because they are both government sponsored entities to begin with. As such, they were already subject to tighter government control and regulation, which is why these are the two companies that led us into this mess to begin with. These two companies were already under the type of strict government oversight that the Obama administration now would like to extend to the rest of the financial world. How did that work out for Fannie and Freddie?
The congress is kkep any investigation of fannie and fredie from happening just for that reason. They basically set both up with much the same bonus terms for the executives and then keep hands off even tho some wanted to audit them.Barney frank basically said if they go under ;we can always bail them out during the debate to audit them.
This brings up something important that is completely ignored by a lot of people. The vast majority of the bailout funds were loans and to what degree they will be paid off or not paid off is an open question.
I think its extremely unlikely that the government comes out positive from this, but after things recover the loses are going to be much smaller than the amount dished out. The majority of banks, etc are going to pay this money back.
I agree with the stance that this really cannot be considered "profit" until the original amount is paid back. It's a red figure in the meantime. However, if the interest amount is daily accrual (which I doubt it is), by the time the bailout is paid out in full, that could definitely be major profit for the coffers.
But IMO it's not profit until the entire bailout is paid back in full.
I agree with the stance that this really cannot be considered "profit" until the original amount is paid back. It's a red figure in the meantime. However, if the interest amount is daily accrual (which I doubt it is), by the time the bailout is paid out in full, that could definitely be major profit for the coffers.
But IMO it's not profit until the entire bailout is paid back in full.
Does anyone actually read articles before they open they're mouths so to speak and post stupid s**t????
The $4 billion in profit is from the banks that have already paid back the bailout money.
It's in the first sentence of the story for f**k sakes..
The U.S. government has hauled in about $4 billion in profits from large banks that have repaid their obligations from last year's federal bailout, The New York Times reported Sunday.
Does anyone actually read articles before they open they're mouths so to speak and post stupid s**t????
The $4 billion in profit is from the banks that have already paid back the bailout money.
It's in the first sentence of the story for f**k sakes..
The U.S. government has hauled in about $4 billion in profits from large banks that have repaid their obligations from last year's federal bailout, The New York Times reported Sunday.
How about instead of cussing and ranting, you actually read what I wrote. Let me bold that part, and then I'll explain to you. At least try to act like you're grown up.
Quote:
Originally Posted by revelated
I agree with the stance that this really cannot be considered "profit" until the original amount is paid back. It's a red figure in the meantime. However, if the interest amount is daily accrual (which I doubt it is), by the time the bailout is paid out in full, that could definitely be major profit for the coffers.
But IMO it's not profit until the entire bailout is paid back in full.
If I lend 5 people $100,000, $20,000 per person, and expect $5,000 in interest from each and get that interest plus the original loan amount from two of them, I've gotten $50k.
$75k is still outstanding from the others. That means I have made no profit. Once I've hit $100k, anything above and beyond that is profit, but I have not realized profit until all of the various loans AND the related interest have been paid back.
You can't say "Well I lent $700 billion, I got $4 billion from some of those loans, so I made profit!!!" It's not profit until there is no deficit (speaking specifically to the bailout money, not the national deficit).
"The Times cited government profits of $1.4 billion from Goldman Sachs, $1.3 billion from Morgan Stanley..."
How much money did we inject into AIG that eventually made its way to Goldman Sachs, Morgan Stanley, JP Morgan, Citigroup, Bank of America - Merrill Lynch, and other AIG counterparties? If we didn't give AIG 180 billion dollars or whatever the figure is now, these banks wouldn't have the money to cover these interest payments let alone pay back the principal on the loans. Also, the report doesn't cover the hundreds of billions in losses being covered by the Fed and the FDIC on assets they've taken over.
How about instead of cussing and ranting, you actually read what I wrote. Let me bold that part, and then I'll explain to you. At least try to act like you're grown up.
If I lend 5 people $100,000, $20,000 per person, and expect $5,000 in interest from each and get that interest plus the original loan amount from two of them, I've gotten $50k.
$75k is still outstanding from the others. That means I have made no profit. Once I've hit $100k, anything above and beyond that is profit, but I have not realized profit until all of the various loans AND the related interest have been paid back.
You can't say "Well I lent $700 billion, I got $4 billion from some of those loans, so I made profit!!!" It's not profit until there is no deficit (speaking specifically to the bailout money, not the national deficit).
Now do you understand?
That smells like an audible quite frankly, but I'll give it you for being clever and creative if nothing else.
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