Morgan Stanley pays back $1 billion in TARP funds... Taxpayers get 20% return!

[scheming daemons]

Back in October, when Obama voted for TARP, he said that - if the program is run properly, the taxpayer could end up making a profit in the long run (just like with the Savings and Loan bailout of the early '90s).

Looks like he MAY have been correct. Hopefully this is a sign of more of this to come:


http://www.cnbc.com/id/32312931

[bluestateguy]

1. The problem is that AIG is not paying their money back

and they sucked dry over $180 billion.

[jasi2006]

24. The problem is the MSM is full of shit in this country!!

It refuses to report on anything positive that is happening as a result of this administration's efforts but chooses to focus on the RW-brownshirt-thugs and their lies about healthcare and the economy. I blame the mainstreat media (and therefore their owners...Murdoch etc.) for pitiful state of affairs of this country starting with the invasion of Iraq and what that has cost this nation. The MSM would rather report the lies of Dobbs, Limbaugh, Hannity, Malkin, etc. than actually report on the facts of what is going on. Intimidation, propaganda, lies, half-truths, scare tactics, bigotry, hate speech...thank the MSM. When the truth and information is shouted down (think FL election 2000) the ignorant will once again control. All the MSM does is conveniently keep us from knowing the truth about banks, corporations, lobbyists, and RW thugs in our Congress.

[bluestateguy]

26. You make a lot of good points, but you did not address what I said

nt

[The Straight Story]

2. So.....we made a 20% return in a down economy?

Pretty amazing.

[Junkdrawer]

3. $4 Trillion out....$1 Billion in (with 20% profit)...

Yep...all those nay sayers were just dead wrong.

[scheming daemons]

5. Actually... TARP was only $700 billion, not $4 trillion.... but I'll forgive your lie

Secondly... Morgan Stanley isn't the only one to pay back so far. Over $50 billion has been returned, most at a profit for the Treasury.

Over time, a good portion of the rest will be returned as well.

[Junkdrawer]

6. "Bank bailout could cost $4 trillion"

NEW YORK (Fortune) -- The cost of the bank bailout is likely to be much higher than $700 billion.

While the Obama administration hasn't asked Congress for more money yet, some experts warn that government spending on support for struggling financial services companies will ultimately reach into the trillions of dollars.

The first half of the controversial $700 billion program to help banks has already been spent -- mostly on buying up preferred shares of troubled banks.

Part of the remaining $350 billion may be used to purchase troubled assets from bank balance sheets and place them in what Federal Deposit Insurance Corp. chief Sheila Bair has dubbed an "aggregator bank."

And while taxpayers will surely recover some of that sum eventually, more money is likely to be needed in order for the bank rescue to work.

"The amount of working capital you'd expect the government to take into this would be around $3 trillion to $4 trillion," said Simon Johnson, a senior fellow at the Peterson Institute for International Economics and author of its Baseline Scenario financial crisis blog.

...

http://money.cnn.com/2009/01/27/news/bigger.bailout.fortune/index.htm

[scheming daemons]

8. That article turned out to be false... TARP never grew beyond $700 billion

Weird that you would take a January article that predicted something.... that turned out to be incorrect, by the way.... as proof of your lie.


But keep trying...

[Junkdrawer]

9. I guess the FED money doesn't count. n/t

[scheming daemons]

10. The OP was about the TARP program. But thanks for arguing about something else....

:eyes:

[Junkdrawer]

11. 'welcome n/t

[scheming daemons]

12. Common tactic of one who has lost an argument: Argue about "B" when the subject is "A"

[mkultra]

18. the fed gave out garuntees, not money.

[HamdenRice]

14. You are correct, there were bailouts other than TARP. But they are profitable also.

TARP was around $700 billion authorized, with about $400-500 billion having been used. These seem on course to be profitable

You are correct that the Fed bailout was even bigger, but it is also on course to be profitable. The biggest components of the Fed bailout was the commercial paper facility. Although the Fed has not released data, the money markets stabilized and did not "break the buck" after that one day in September, so there is little reason to believe that the Fed did not make money on the commercial paper bailout.

The second biggest Fed program was the currency swap facility with other central banks -- the European Central Bank, Bank of Japan and Bank of England. None of those central banks have failed and there have been no violent currency swings between the dollar, Euro, Yen or pound, so there's every reason to believe that that bailout has also been profitable.

[Junkdrawer]

16. What about the AIG money? n/t

[Name removed]

19. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Champion Jack]

7. K&R--Thanks for this info

[mkultra]

17. $4 trillion? This is a RW bullshit number

[TexasObserver]

4. Recommend

[HamdenRice]

13. But, but, ... Doomers said it was "free money, no strings attached"!!11! (Seriously one correction)

This is good news. Thanks for posting.

One correction: The S&L bailout, run under Bush I, was not profitable. In fact, it ended up being quite a giveaway to crony banks and real estate fraudsters.

The prior bailout that was profitable was the Mexican peso bailout, which was carried out by the Clinton administration.

Hmmm.... Looks like a pattern there.

[DCKit]

25. I temped at the RTC when they were winding it down.

The only people who came to work were the secretaries and an office manager.

They were paying the secretaries $60K/year to do their nails, answer the phone and, no doubt in my mind, to keep their mouths shut about what went on at the RTC - absolutely nothing.

[Junkdrawer]

15. So I'm guessing the banks are getting ready for the next big bailout....

when the Alt-A mortgage resets hit this winter (and the massive Credit Default Swap wagers undoubtedly laid against those mortgages) come due.

[mkultra]

30. resets?

[Junkdrawer]

31. This

[mkultra]

32. this would indicate the opposite of a threat

but rather that the number of outstanding ALT-A Arms has gone way down. ARMS reset every quarter.

[Junkdrawer]

33. What I'm worried about is when a large number of Option ARM...

mortage holders are no longer able to "Pick their payment" and, instead, have to begin paying off their mortgage like everyone else.

I'm guessing that a large number of Credit Default Swaps were placed betting that the mortgage holders would default when that happens.

BTW: I found the graph here last year:

http://www.calculatedriskblog.com/2008/08/subprime-and-alt-the-end-of-one-crisis.html

[mkultra]

34. yeah, that problem has already happened

It resulted in what was recently refereed to as the credit crisis which lead to the economic meltdown. Thess MSB and CDO products have been mostly flushed, which is what your graph shows.

[Junkdrawer]

35. Nope. Worst of that is yet to come. And it's being delayed...

http://www.businessweek.com/lifestyle/content/apr2009/bw20090416_103126.htm

[mkultra]

37. actually, the story says that the problem of a second wave has been diverted

With the push down of the overnight rate. The writer also feels that this should give them time to move out to fixed mortgages at low rates.

Frankly, this sounds kind of alarmists as the number of ARMS in circulation is very low now.

In summary:
1) Crisis fabricated
2) Crisis averted
3) Profit.

[Junkdrawer]

38. Time will tell who's right...

I think the problem is still out there and Credit Default Swaps will turn it from a minor crisis into another big problem.

[mkultra]

39. yes it will, ill be looking for your appology.

[unblock]

20. of course the first ones to repay are the ones the government will profit on.

it's the last ones to pay, partially or not at all, that spell LOSSES.

[Junkdrawer]

21. To make up for AIG alone, the rest of the $700 Billion would have to earn 25%+....

But then, why listen to me? I'm just a RW troll... :crazy:

[scheming daemons]

22. The Govt owns AIG now... and may still get some of that back...

You are implying it is a total loss of $180 billion.


Not necessarily true.

[Junkdrawer]

23. Last I heard AIG is still bleeding...and my guess is that they will hemorrhage BIG this winter...

When the implications of this hits...

[Uzybone]

27. BOOOOOOO!

[scheming daemons]

28. What are you booing, exactly? That they paid it back, or that the govt made a profit?

...or just me in general for point it out?

[Uzybone]

29. Sorry, as a DUer I am obligated to boo anything TARP related

especially when its good news.


:sarcasm:

I actually recced your OP.

[brentspeak]

36. Hey, brain-stem:

Yeah, you -- the one using DU to shill for Wall Street: http://www.youtube.com/watch?v=Mj0JAfq4esk">Where's the at-least $1.2 trillion the Fed lent to unknown institutions off the balance-sheets?