Wall Street Bailout Returns 8.2% Profit Beating Treasury Bonds

[Newsjock]

Source: Bloomberg News

The U.S. government’s bailout of financial firms through the Troubled Asset Relief Program provided taxpayers with higher returns than yields paid on 30- year Treasury bonds -- enough money to fund the Securities and Exchange Commission for the next two decades.

The government has earned $25.2 billion on its investment of $309 billion in banks and insurance companies, an 8.2 percent return over two years, according to data compiled by Bloomberg. That beat U.S. Treasuries, high-yield savings accounts, money- market funds and certificates of deposit. Investing in the stock market or gold would have paid off better.

When the government first announced its intention to plow funds into the nation’s banks in October 2008 to resuscitate the financial system, many expected it to lose hundreds of billions of dollars. Two years later TARP’s bank and insurance investments have made money, and about two-thirds of the funds have been paid back. Yet Democrats are struggling to turn those gains into political capital, and the indirect costs of propping up banks could have longer-term consequences for the economy.

Read more: http://www.bloomberg.com/news/2010-10-20/bailout-of-wall-street-returns-8-2-profit-to-taxpayers-beating-treasuries.html

[Radical Activist]

1. I never expected most of the money to be paid back.

It's a nice surprise.

[northzax]

2. so wait, this act that so many people hated

not only slowed to destruction of the US economy, but also made a profit? sheesh, maybe government can sometimes do the smart thing?

[Frustratedlady]

3. You won't hear it on the MSM, though.

[JackRiddler]

5. Bloomberg is the "MSM" and it's all they've reported for weeks - and it's complete bullshit.

[Frustratedlady]

6. Why do you say that? I don't understand. nt

[JackRiddler]

9. Which part do you not understand?

... that Bloomberg is "MSM"? It is.

... that the "MSM" (corporate media) have covered the supposed success of TARP? They have.

... or that TARP

- has not been paid back in full, with most of it still exposed?
- represents a small portion of the banking bailouts?
- did not save the economy?
- punished responsible and local lenders?
- rescued essentially criminal organizations that now continue to wreak havoc upon the people while paying themselves absurdly high bonuses?
- will not in the end suffice to prevent the zombie banks from going under, since they're still exposed for trillions in derivatives?

You can find all that out for yourself. Maybe you should read beyond the "MSM."

[MannyGoldstein]

11. +1

Testify!

[MrTriumph]

4. Maybe this is part of why TARP is so poorly thought of

From the article:

“The huge wealth transfer from fixed-income pensioners to the banks has helped the banks repay TARP,” Petzel said.

[pnwmom]

7. What are they referring to specifically? n/t

[jtuck004]

8. Uh, they are leaving out the treasuries and money that the toxic assets

were replaced with. The banks continue to borrow at near zero, with which they are buying longer term treasuries. That has allowed them to rake in billions of dollars over the past year or two.

That goes to big paychecks and bonuses.

The story above only talks about TARP and the 700 billion in that program. That is just a line item in a list that, if you go back to July of '09, eventually reached $15 trillion.

That Troubled Assets Relief line item is under TREASURY in this report, the latest I can find.

[SomeGuyInEagan]

10. What about the $29 billion loss reported earlier this month?

That was all over the news, claiming the that final cost of the $700 billion TARP would end up being "only" $29 billion. Are the only counting the returns from one pot of $309 billion of the entire $700 billion? What am I missing?

http://finance.yahoo.com/banking-budgeting/article/110920/exclusive-treasurys-tarp-aig-bailout-costs-fall-to-30-billion?mod=bb-budgeting

http://www.politicsdaily.com/2010/10/06/tarp-bailout-loss-to-taxpayers-put-at-29-billion/

http://www.realclearpolitics.com/2010/10/01/tarp_bailout_will_cost_less_than_anticipated_242909.html

http://www.nytimes.com/2010/10/01/business/01tarp.html

[Fool Count]

12. All that means is that the toxic crap the US government took off

the banksters' hands is now back to its pre-crisis valuations (actually even 8.2% over them) and circulating in the marketplace again.
It also means that the next bailout will require at least 8.2% more money. Is that supposed to be a good thing?