CBO: Just $25B Owed on $700B TARP

[sabra]

Source: CBS News

Outlook on Payback of Controversial Bailout Package Much Rosier than Previously Estimated, Independent Budget Agency Finds

(AP) Congress' independent budget agency says the cost to taxpayers of the contentious $700 billion financial rescue has dwindled down to $25 billion.

The Congressional Budget Office estimates that as of this month the government will recoup most of the money spent. The $25 billion represents unrecovered money spent to bail out insurance giant American International Group and automakers Chrysler and GM. All three, however, have paid back some of their rescue money.

The payback outlook is far rosier than it was in August when CBO forecast losses of $66 billion and in March when it foresaw losses of $109 billion.

In a report issued Monday, CBO said the brighter prospects are the result of repurchases of preferred stock by recipients of bailout funds, a lower estimated cost for assistance to AIG and to the automotive industry, and lower participation in mortgage assistance programs.

Read more: http://www.cbsnews.com/stories/2010/11/30/business/main7102546.shtml

[Botany]

1. That socialist Obama strikes again*

So it worked?

:wow:


* Yes, I know it started under W.

[Lorien]

13. See response #4. nt

[democrat_patriot]

2. Send to your teabag email lists! Watch heads explode.

[Botany]

5. Government is the problem! Socialism is on the march!

I never got how Obama who has Hank Paulson and Timothy Geithner working for him
could be such a socialist .... :crazy:

[Romulox]

3. LOL at "just $25,000,000,000" gifted to banksters and multinational corps.

:puke:

[dkf]

7. The banksters paid it back with interest.

The outstanding funds are from AIG and the mid to small sized banks.

Sorry they survived and paid back the taxpayers.

[w4rma]

10. They did not pay back the Federal Reserve for the trillions they were given. (nt)

[TheWatcher]

46. Sorry you are still hypnotized by the Propaganda.

What a farce.

You'd believe the Earth was flat if it helped the Perception of the Party Line and The Football Team.

[jtuck004]

4. So TARP was only $700 billion. We got that. Yet they don't talk much

about the toal bailout of $17 to $23 trillion, which at least one author estimates will net them about $3.2 trillion or so that we will never get back. And the investment banks are holding treasuries today that were traded for toxic assets that they continue to collect, potentially, billions of interest on.

Stories like this play us for fools.

[dkf]

8. The toxic assets the fed is holding paid enough back to make the Fed the most profitable bank here.

And the reinvestment of payments on these assets are enough to help keep mortgage rates low.

[jtuck004]

11. Oh yeah, tremendous profit, Here's a headline...

Federal Reserve Profit Hit Record $46.1 Billion in 2009
http://www.huffingtonpost.com/2010/01/12/federal-reserves-profit-h_n_419835.html

What a tremendous return on an investment of potentially $23 TRILLION dollars, of which the governemnt has paid out $2 TRILLION so far.
http://www.politico.com/news/stories/0709/25164.html

Last time I had a math class they would have called that a loss. To top that off, there are at least 7 million homes left to be foreclosed, and
that doesn't count the ones that have been purchased as "deals" of late, which are going to slide off in value just like the rest.

It's highly unlikely that the worst case scenario will come to pass, of course. Just like Bernanke said when he went on T.V. and told
the CNBC anchor in 2005 about the worst case scenario that housing prices would come down across the country "I guess I don't buy your
scenario, it's a pretty unlikely possibility...".
http://www.garynorth.com/public/7228.cfm

'Course, that same year AIG quit selling credit default swaps because things looked so bad, and in less than a year we were headed into the first of
many millions of foreclosures. I wonder what an ostrich feels like with it's head in the sand when it is run over by a truck.

The only thing keeping interest rates down is lack of demand and activity. The Fed, even with the power of raising the bank rate knows that if it raises that one the economy will fail even faster than it is. And because all of our plans seem to be based on the idea that the economy is going to recover in a year or two, the same plan we have had for at least 3 years now, they can't walk it back without looking foolish. Again.

[joshcryer]

45. Please drop the nonsense $23 trillion Fox News BS.

http://mediamatters.org/research/200909020004

[jtuck004]

48. Please drop the "guilt by association" nonsense on completely accurate

figures, even though I am sure Joe McCarthy would be proud of such an assertion.

What Scarborough said was inaccurate, but that's not what I wrote. As I said in my post, "potentially" - and that is still an accurate accounting of the theoretical maximum. Statements by the inspector general make this clear:

It is clear that the Treasury submitted figures which may have concealed a $40 billion loss to taxpayers, and had to insert statements into their report to justify potenially imaginary accounting

"It is not clear whether the Treasury will be able to sell so much stock without making the price fall. Mr. Barofsky said the Treasury’s projection also assumed that all the other steps for the federal government to withdraw from A.I.G. would go smoothly.

He said the Treasury’s statements tended to contribute to a “widespread, but mistaken, belief that TARP is at or near its end.”

And that's just one program. We won't know the outcome of this for years, and it is dishonest and disengenuous to ignore the money that has been lost, or the money that is still at risk in a vain attempt to make the taking of taxpayer money wtih the assistance of government officials to cover up the reckless behavior of investment banks smell any better than it does.

Is it still quite possible things won't work out as the Pollyanna's think? We are still working another 7 to 9 million foreclosures, enough foreclosures out there to potentially double the supply of homes for sale, which as of today stands at a 9 year supply. ALL of this real estate is sitting with inflated values, some as much as 30 to 70% higher than they could sell for today - a number which may easily go down in the future - courtesy of the rules from the FASB and their mark-to-myth accounting. We have an unemployment rate near 10%, very likely to be near 12% within the next two years, and quite possible won't be at 5-6% for at least TWO DECADES. That's 30 million of our neighbors who are unemployed, underemployed, or simply too disheartened to continue facing more rejection. Layoffs continue, manufacturers are still moving the work out of the country, and statements about corporate earnings still contain notes that the real strength is overseas while sales in the U.S. lag.

Ignoring the real work ahead is not going to get us anywhere, and not recognizing and taking ownership of what we have allowed to happen is not going to make it any easier.

[girl gone mad]

6. Please...

learn how to read a balance sheet before you push this kind of propaganda.

It's incredibly repulsive to people who can do the math and understand precisely how much money Wall Street stole from the working people in this country.

[dkf]

9. Not just Wall Street...the entire real estate industry.

Between the crooked loan officers, the corrupt appraisers, the slimy real estate agents, and the flippers there was a boatload of money made.

[jtuck004]

12. See, if you just hold the paper up on the window, you can see through

it to trace the signature on the newly prepared paper that shows the strawberry picker in California, who really only makes $14,000 a year, really does qualify for this $740,000 home.

sheesh...

[JuniperLea]

14. TARP Costs Drop

Source: CBO via The Street

TARP Costs Drop
By Lauren Tara LaCapra 11/30/10 - 01:11 PM EST

WASHINGTON (TheStreet) -- The Congressional Budget Office (CBO) has confirmed what the Obama administration has been saying for months: the hated government bailout program will cost taxpayers much less than initially projected.

Tuesday the CBO released its most recent quarterly analysis of TARP - short for the Troubled Asset Relief Program - showing that the cost has dropped 62% in just a matter of months. The U.S. Treasury Department now stands to lose about $25 billion on TARP, according to the CBO, "substantially less" than its August estimate of $66 billion and its March estimate of $109 billion.

To put it in perspective, TARP's cost represents less than 2% of the projected budget deficit for fiscal 2011 (of $1.3 trillion) and less than 0.2% of that year's projected U.S. gross domestic product (of $15.3 trillion).

"Clearly, it was not apparent when the TARP was created two years ago that the cost would turn out to be this low," the CBO said.


Read more: http://www.thestreet.com/story/10934398/1/tarp-costs-drop.html

---

Damn that Obama...

[notesdev]

15. Bad accounting FAIL

Hiding the costs in the AIG bailout and other bailout and liquidity programs and letting the banks lie on their balance sheets doesn't make TARP any less costly.

[JuniperLea]

18. Got a link to your assertions?

Thanks in advance.

[No Elephants]

43. Lots of info about hidden costs out there, if you watch TV, read, etc.-- or simply Google.

A great variety of kinds of hidden costs,too, including things like impact on interest rates, value of the U.S. dollar and on and on.


http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4GGLL_enUS337US337&q=hidden+coats+of+TARP+bailouts

[TheWatcher]

47. Information does no good for people who only believe whatever fits the false paradigm they need

to cling to in order to function.

Waste of time.

If the Earth is flat is what needs to be believed, then the Earth is flat for those people.

They do not want to know the truth.

[Lisa D]

16. Obama will not get credit for any good news.

He's to blame for everything that goes wrong in the world, but anything that goes right is clearly in spite of the president, not because of him. Just check out several current threads on DU to understand how this works.

[JuniperLea]

19. Welcome to the war on Obama...

You speak the truth, Lisa D. The sad, reprehensible, vile and ugly truth.

War on Drugs... War on Terror... War on Obama...

[ProudDad]

22. Obama is a willing participant

in the "War on Drugs(tm)" and the "War on Terror(tm)"...

That's why there's a "War on Obama's POLICIES"...

[JuniperLea]

24. Regardless of the policy...

He could cure cancer, save every home from foreclosure, feed every family and give every living breathing adult a job and it would mean nothing to some.

Yet not one person here on DU can tell me how long it should have taken to get this country back from the brink of full scale disaster... not one.

[ProudDad]

31. The only "brink of full disaster"

that bush/Obama took the country back from...

Was the potential collapse of the phony "economy" of speculators and hedge fund managers...

The REAL economy, the movement of goods and services required for human needs is actually harmed by forestalling the inevitable collapse of the phony economy...

We need to relocalize, reskill and power down -- NOT prop up the dead-end corporate capitalist system that's destroying the Earth for short term profit...

And no one is expecting Obama to "cure cancer, save every home from foreclosure, feed every family ya-da-ya-da-ya-da <insert red herring here>...

Actually, anyone who's paying attention is not expecting ANYTHING from Obama or any other creature of the Corporate State...

[FiveGoodMen]

41. He's pushing the wrong way.

Timing has nothing to do with it.

[ProudDad]

21. You DO remember that TARP was a gwbush program, don't you?

:shrug:

To bail out the banksters...

But of course, Obama had to sign on too -- Harvard Law - The School for Defense of the Status Quo...

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

[JuniperLea]

26. What would you have done?

How would you have fixed this mess? And how long do you suppose your method would take? Please, enlighten us all.

[ProudDad]

32. I Already Did

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4635608#4635714

But I'd like to add END ALL THE FUCKING WARS!!!

[MrTriumph]

17. TARP supporters spin: "less than 2%". Hey, it is still a HUGE loss.

"To put it in perspective, TARP's cost represents less than 2% of the projected budget deficit for fiscal 2011 (of $1.3 trillion) and less than 0.2% of that year's projected U.S. gross domestic product (of $15.3 trillion)."

Trying to make BILLIONS of DOLLARS sound insignificant is nonsense.

[JuniperLea]

20. What would you have done?

Where would we have been if TARP hadn't been used? So, no credit for taking BUSH's $700 billion debt and turning it into $25 billion... a fraction... and getting better all the time. Gotcha... War on Obama... right on schedule.

[ProudDad]

23. You DO remember that TARP was a gwbush program, don't you?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4635608#4635696

[JuniperLea]

28. You didn't even read my post, did you?

You just went for the vitriol without bothering. Had you actually read my post, you would have seen me crediting Bush for TARP.

You don't get it... you don't care to get it... that would get in the way of your war on Obama.

And you AGAIN fail to answer my question. No surprise to me. No one here has an answer... I've been asking it almost daily for months, no, years. Instead of answering, you try to deflect... in a really ignorant way I might add... telling me something that I actually put in the post myself.

Jesus God... where are the thinkers? My kingdom for a thinker! :eyes:

[ProudDad]

29. I read your OP and post

And I certainly saw the part where you were trying to give Obama the credit...

When he deserves none of it...

Well, I guess he deserves "credit" for maintaining the status-quo...but after all, that's just his job...

But if you read further, I answered your "question"...

[JuniperLea]

35. You claim to have read it...

then pointed out, as if I were clueless and hadn't said that this was BUSH's TARP, that this was BUSH's TARP. Please excuse my confusion... oh wait.. there was none. Never mind.

[No Elephants]

44. Yes, but Obama supported it fully. Remember, Dummya said he would not release

the second part of the funds unless Obama asked him? And just about as soon as those words were out of Dummya's mouth, Obama asked Dummya to release.

Bernanke, Summers, Geithner, Paulson--not exactly greatly diverging economic philosophies amond them.

[ProudDad]

27. I would have let the banksters slush fund banks fail...

and I would have applied the $700 billion to set up local credit clearing houses in every town in the nation...

To finance relocalization and building resilient local economies that will be able to survive the Long Emergency; the coming crisis of Peak Oil (energy decline), Catastrophic Global Climate Destabilization and the inevitable collapse of the Ponzi-scheme capitalist 'economy'...

To CHANGE from the status-quo to a sustainable future...

And I would have charged an asset transfer tax on Wall Street's Casino and the rich to pay for it!

Thanks for asking :hi:

[JuniperLea]

34. Have you followed the "let them fail" scenario through to the bitter end?

Just curious to know what you think would have happened to all those assets, etc.

[ProudDad]

38. There WERE no "assets"

What "collapsed" and were renewed by the TARP were primarily financial instruments made of hacked up bits of "mortgages" that no longer are intact and the bets the banksters made that those instruments would become WORTHLESS...

Case in point: We the taxpayers giving AIG $BILLIONS so they could pay $13 BILLION in "insurance" to Goldman Sachs for the crap paper that became worthless...

Pretty much all the TARP was about...

Now since the only part of the "economy" that's doing quite well is the phony Wall St. version they're "paying back" the money they borrowed AT NO INTEREST...

And they are NOT loaning anything to Main Street...

And the real unemployed/underemployed rate sits at over 25% -- same as during the Great Depression...

And those banks are DRAINS on the economy, they serve as pipelines for the ubber-rich to transfer wealth from us, our Commons, to the very rich...

Big f*ckin' whoop...

---------------------------

If the banks had been allowed to fail their "shareholders", mostly the rich, would have taken a hit...tough shit...

If necessary, the Taxpayers COULD have bailed out just the rare pension funds, etc., real people, that actually had skin in the game. That would have been much cheaper than supplying seed money for the banksters and more billion dollar bonus payouts...

As I said below, setting up local credit clearing houses and credit unions to rebuild LOCAL economies would have been a much better way to end the REAL recession (which is STILL what WE'RE living in!)...

---------------------------

Thanks again for asking :hi:

[JackRiddler]

30. Put'em all in receivership and held some big old trials. Rocket docket.

Guarantee the depositors under FDIC, screw the bank shareholders, and definitely tell anyone with a naked credit default swap to go fish. Sell off whatever assets are left to a thousand new banks.

Put up a couple of trillion dollars in Treasury and Fed bailouts, not for the banks but for the states, on the condition that they all found state banks and credit unions, put their pension funds in as the first deposits, and offer loans to small businesses and homeowners at decent rates.

Encouraged renegotiation of all underwater homeowner debt to reflect market price.

Banned naked derivatives of any kind. No horse betting for Hedgistan.

Restored Glass-Steagal firewalls and put a cap on how big any bank can be.

Cut the Pentagon and stick a few hundred billion into energy and transport transformation (read solar and trains). Make jobs.

Next?

[ProudDad]

33. And what HE said...

:hi:

[JuniperLea]

36. Well done! I like that!

Now tell me how to do this with the party of no.

[ProudDad]

39. You can't...

It's the two-headed party of YES for the rich and the banksters and the corporations...

And "NO" for the rest of us...

Haven't you been paying attention? Who are they going after with the BIPARTISAN Cat Food Commission? Social Security recipients, programs for the poor while lowering tax rates for the rich and corporations?

Those of us who are aware of what's going on must build local communities to survive what's inevitably coming now that humans have run through the fat of the land and are now consuming the muscle tissue of Mother Earth to sustain short-term corporate profits...

Forget the two-headed party of screw you...

[JackRiddler]

40. In 2008-2009? Please, a solid angry majority was mobilized behind NO bailout for banksters.

And more House Republicans voted against TARP than Democrats.

And then the Fed put up about $8 trillion in bailouts, backstops, guarantees and what not, almost exclusively for the zombie banks. What I'm talking about would have been a lot less than that.

And a trillion dollar stimulus was possible.

And immediate drawdowns on the war and military spending were possible, but not even ventured.

Obama had it in his power to do exactly what I've laid out above. For that matter, so did McCain -- who might have won if he'd said: Put the banks in receivership.

Instead they saved them and then watched for two years as the anger was redirected at a bunch of bullshit.

[JackRiddler]

25. Cost of Rescuing The Dying Dragon So That It Eats You Lower Than Ever.

[ProudDad]

37. I would Like to recommend "Aftershock" by Robert Reich.

Even though Robert has not connected the dots enough to recognize the Long Emergency...

He's done a great job at clearly detailing the absolute wrong path down which the current "economy" has been directed...

TARP is a perfect representation of what's WRONG with the approach toward propping up today's "economy". I refer you to pages 101 through 107 in his book, the beginning of the chapter titled "Outrage at a Rigged Game"...

http://www.randomhouse.com/catalog/display.pperl/9780307592811.html

--------------------------------------------------

I shall be writing Mr. Reich with my inquiry as to whether he's heard of or whether he understands the 3 crisis of the Long Emergency and the fact that restoration of the "economy" he's trying to regenerate is impossible because of human overshoot on a finite planet.

But that's another thread... :)

[TroglodyteScholar]

42. Yay!

ONLY $25 BILLION!

That's chump change, and I'm sure it couldn't have been used on anything worthwhile anyway.