12/07/2009 10:38:49 AM EST

What do you know about TARP?

posted by publius

According to this NYTimes article the Treasury is now projecting to recover $658 billion of the $700 billion TARP program.

We will actually make money on the loans to banks.  The loses come entirely from Chrysler, GM, and AIG.

Interestingly, the second round of TARP funding turned out to be relatively useless as only $7 billion was loaned out under President Obama's administration.

I agree with Cenk that some things could have been handled better, and getting real regulations passed for the financial sector must be a top priority.  But no matter how you see Geithner and Bernanke you have to admit it looks like they saved the world at a pretty cheap price.

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What do you know about TARP? | 14 comments (14 topical, 0 hidden)
They saved the World!!! (none / 0)
ROFLYSATT!!!

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 12/07/2009 10:47:30 AM EST

Holy Sh*t! (none / 0)
Who woulda guessed?  It looks like "socialism" works after all!  I'm sure glad all those bankers are doing so well.  Wew!   We sure can't let them lose their bonuses, can we?

I still believe that the most efficient way to handle things would have been to have had a good bankruptcy system in place to take care of the banks that failed.  That way we could have killed two birds with one stone: irresponsible bankers would be out of their jobs, and banks that are still "too large to fail" would have been broken up.  Well, a third bird would have been that the courts would have overseen their restructuring.  Oh!  And a fourth bird would have been that all of the banks' records would have been opened up.  Oh!  And we can't forget the fifth bird that it wouldn't have cost the taxpayers a dime!

But, I'm sure glad all those bankers are doing so well.

Now if they could just give people their jobs back, maybe we'd have fewer people going hungry in our country.  (But I'm sure the right-wingers will say that those "lazy bums" deserve to go hungry.)

by EveningStarNM on 12/07/2009 12:39:53 PM EST

Top down bailout bad - Bottom up bailout better (none / 0)

Bottom up solutions to crisis and recession including: Mortgage relief to homeowners keep people in homes and save communities. All homeowners get mortgage vouchers to pump cash into banks and free up money in economy. All adults get credit card voucher to pay off existing credit card debt. If banks can't work with consumers to right the ship then let bank go under.

These types of actions would have recapitalized banks and stimulated the economy.

Give everyone on Social Security a raise. Raise the minimum wage. Pump more into food stamps.

They should enforce regulations they have and restore regulations that are needed. Credit Card rates are usurious and should be regulated. 

by DonkeyHotey on 12/07/2009 01:28:23 PM EST

You mean, kill two birds with one stone? (none / 0)
Give people money and let it trickle up to the banks?

There you go again, trying to be rational when rationality must be avoided at all costs.

The whole point of this exercise is to take as much money as possible from the poor and middle classes and to funnel it up to about 400 families who are the real power in our country.  Your plan would do the exact opposite, and we certainly can't have that!

by EveningStarNM on 12/07/2009 04:47:05 PM EST

[ Parent ]
brevity is the soul of wit (none / 0)
Great succinct powerful post. And the first regulation to put back on the books is some form of Glass Steagall or a millennium version to keep straight banking separate from leverage, speculative, derivative or other form of financial banking, as oxymoronic as that phrase sounds.

Whatever you do, don't click this link (studies show you're more likely if you shouldn't)

by tiggerporn on 12/07/2009 05:53:55 PM EST

[ Parent ]
Something I heard (none / 0)
I remember reading that there is a way they can borrow from the Federal Reserve off the books and without the fuss of a congressional "bailout". & nbsp; I don't recall where it was I saw that, maybe on HuffPo, but maybe they're getting the funds that way to pay us back with our own money.   Kind of like little Johnny borrowing 20 bucks from dad to pay Mom back the 20 bucks he borrowed from her.  I would not be shocked.

by bfaul on 12/07/2009 03:59:15 PM EST

Johnny doesn't have the FDIC or the Fed... (none / 0)
...to bail him out when he can't pay back his dad.

But I seem to remember the same thing.  Sheesh!  The whole thing just seems so labyrinthine that I don't even know if we can trust the NYT article.  Somehow we're going to end up paying the interest and the principle on the "loans" we gave the banks.

But what I don't understand is why the Republicans weren't ecstatic about TARP.  It's one more thing that could help to crush our economy and our government, and that is what they want to do, isn't it?

by EveningStarNM on 12/07/2009 04:40:30 PM EST

[ Parent ]
horrified but not surprised (none / 0)
Along this line, I heard last year when they were lowering interest rates (how long can ya go, how low can ya go- I get this image of Erin Burnett of CNBC in a hula on a cruise ship) that they were considering lowering the rate below zero, which sounded absurd and probably illegal. The rational being that when the market was so shaky people would run to the safety of bonds (which they did) and even essentially pay money for the gov't to ensure it. But the flip side no one talked about was that if they did this they would also essentially be paying bankers to take our money. Even if it were 25 basis points below zero, it is like, come on take our money. Big Banker: oh no, I shouldn't really, I'm stuffed to the gills already, oh OK maybe just a lil more, if you insist. No no here, let me pay you to take our money. Ditto: wouldn't be surprised. Bernanke says now he won't raise rates (what can I do, lower them, he jokes) but let's wait and see what happens once he gets reconfirmed.

Whatever you do, don't click this link (studies show you're more likely if you shouldn't)

by tiggerporn on 12/07/2009 06:02:49 PM EST

[ Parent ]
thanks, I missed this (none / 0)
I haven't read the NY Times article yet, which I'm going to do in a minute, so that might answer my question. But as I remember it, there were two rounds of TARP, each being about $350 billion. First Paulson, then Treasury Secretary (and former Goldman Sachs chairman I think, right) appointed by Bush says he needs what he calls a bazooka, a really really big check from congress. Meaning the first plan wasn't to actually even use the funds, just to really really impress his Wall Street friends, he gave a ballpark figure of around a trillion. Then they get authorization for the 700 billion, but with a provision that they must return to congress to get the second half. Meanwhile Obama wins the election. But then once Bush was a lame duck they decide to scrap the first goal of TARP which was to buy off toxic assets of the bank's balance sheet and auction them off. Geithner takes over that program and renames it the legacy assets blah blah something or other, but eventually that gets scrapped too.

So my point is, the second half of the bailout, the second 350 billion, what that just didn't get spent? I mean did they get back 600 plus billion from the first 350 billion? This is where I'm confused. Or did that money just not get used at all? And whatever happened to the toxic assets to begin with that caused all of this? Are they simply all those cheap homes we're seeing the banks putting up for sale online?

Like I said let me read the article, it probably answers all this, right. Thanks for the heads up though.

Whatever you do, don't click this link (studies show you're more likely if you shouldn't)

by tiggerporn on 12/07/2009 04:49:39 PM EST

I understand your confusion. (none / 0)
But the "toxic assets" were the credit default swaps, although some percentage of mortgages have turned out to be bad loans.  But the CDS's, which the banks are still selling to each other with the same abandon that got us all fucked in the first place, are still around, still on the books as assets, although some have been marked down, and just waiting to explode again because no one has done anything at all about them.

The banks are still selling each other credit default swaps, and they're still not regulated.

Barney Frank is an employee of the banks.  Don't expect any significant reforms soon.

by EveningStarNM on 12/07/2009 05:38:28 PM EST

[ Parent ]
Thanks..but no thanks (none / 0)
No, once they are "unwound" at basis there were often loans at the bottom of collateralized debt obligations (if not always the credit default swaps based upon them, certainly so some of the time). And I find it very very hard to believe that all of these repossessed homes the banks are selling right off their own websites (as opposed to real estate agents) have nothing to do with those toxic assets.

The exact same thing happened during the Great Depression.

But my confusion was on the other point which you didn't answer.

Whatever you do, don't click this link (studies show you're more likely if you shouldn't)

by tiggerporn on 12/07/2009 05:45:57 PM EST

[ Parent ]
bobo chimes in (none / 0)
I'm ignoring him, right?

Whatever you do, don't click this link (studies show you're more likely if you shouldn't)

by tiggerporn on 12/07/2009 06:04:33 PM EST

[ Parent ]
I see your point about the CDOs and CDSs (none / 0)
But I've always thought that referring to the mortgages as "toxic assets" was misleading since they actually represent something with real value.  The CDOs and, especially, the CDSs, were always inflated way beyond any actual value that the underlying mortgages may have had.

The bad mortgage loans could have been handled by foreclosure and bankruptcy.  But the freewheeling gambling that the bankers engaged in with the CDOs and CDSs were what really caused the banking system's collapse.  It's the enormously inflated and unjustified valuation of the toxic assets in relation to the actual value of the mortgages that is the problem.

But as for your other question, the one that I didn't answer, I didn't answer it because I don't know.  It certainly looks to be as you describe, but who can tell?  Does anyone really know where all of that money is?  I don't believe it.

I think we have yet to learn about all of the back room deals that were made to funnel taxpayers' money to the bankers.  And if it doesn't turn out that we're simply repaying ourselves in some kind of phoney transaction that leaves hundreds of billions in the hands of the bankers then I'll eat my hat.

I am simply astounded that no one has gone to prison over this mess.  The taxpayers have been defrauded of hundreds of billions of dollars over the last decade, and, as far as I know, only an Air Force procurer has gone to prison for these massive thefts which all started under the last administration.  TARP was just the culmination -- and crowning gem -- of their crime.

by EveningStarNM on 12/07/2009 06:31:58 PM EST

[ Parent ]
They saved themselves, maybe... (none / 0)
But they sure as Hell didn't do any good for us... You're delusional if you think they want to help us...

by bobo1 on 12/07/2009 05:42:55 PM EST

What do you know about TARP? | 14 comments (14 topical, 0 hidden)
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