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Bank bailout returns 8.2%

Original post made by dublinmike on Oct 21, 2010

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.

For further details:
Web Link

Comments (8)

Posted by Arroyo, a resident of Another Pleasanton neighborhood
on Oct 21, 2010 at 7:52 am

Mike, Thanks for sharing.

Okay, I'll play your straight man. And, your point is??????


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Oct 21, 2010 at 8:44 am

Stacey is a registered user.

I find that ProPublica does an excellent job of covering the bailout. Web Link

"The Treasury has been earning a return on most of the money invested or loaned. So far, it has earned $39 billion. When those revenues are taken into account, $305 billion is the net still outstanding as of Oct. 18, 2010."

So there's a return on the investment, but the total hasn't broken even yet, which is information the CCTimes article leaves out. Buried in the ProPublica site somewhere is an examination of past government bailouts. Many of them earned a return on the investment.


Posted by GX, a resident of Foothill High School
on Oct 21, 2010 at 9:00 am

The White House and most press has been incredibly disingenuous regarding the bailout returns. Please note that it does not include the conversion of debt into potential GM stock if/when they go public. It is highly unlikely they will break even on this investment for decades.

Also it doesn't include the Freddie/Fannie baiouts which are HUNDREDS OF BILLIONS to date and with Geither Christmas Eve present last year, taxpayers may be on the hook for TRILLIONS in bad debt.

The US government will never get a risk adjusted return on their investment. This is socialization of irresponsibility/corruption at its best. A once in a lifetime event.


Posted by SteveP, a resident of Parkside
on Oct 21, 2010 at 9:59 am

SteveP is a registered user.

Good thing Bush approved of the bailout and Obama inherited the results. Any idea who will be tring to take credit for it?


Posted by Patriot, a resident of Another Pleasanton neighborhood
on Oct 21, 2010 at 10:15 am

GX,

I was with you right up until you said "A once in a lifetime event". TARP 2 could be right around the corner. The "too big to fail" problem really hasn't been solved.

Its also funny that these calculations only look at TARP (the US Treasury bailouts) and not the Federal Reserve bailouts. Look at the article on Bloomberg for more details. The FED is still holding over a trillion dollars worth of "toxic assets" that it purchased from these companies to keep them from going under. The New York FED is currently suing Bank of America to try to get them to buy some of this stuff back.

Web Link

And there is also the issue of moral hazard. The government has sent the message out to financial companies that it you grow to a sufficient size, you needn't worry about risk. The government will be there for you as long as your failure threatens the entire financial system.

Republicans and Democrats are both to blame for this.


Posted by GX, a resident of Foothill High School
on Oct 21, 2010 at 11:24 am

Patriot - I agree with your point. Unfortunately, we aren't even close to being through this (essentially a balance-sheet recession aka depression) and TARP 2 may be around the corner.

I'm just tired of the gross mis-representation of the government's bailouts to put a positive spin on things, the almost useless mainstream press these days, and the gullible public who believes this stuff.

I wouldn't care so much if I didn't know I, you and anyone else who pays taxes will end up paying for all this corruption, incompetence, etc.


Posted by dublinmike, a resident of Dublin
on Oct 21, 2010 at 9:53 pm

dublinmike is a registered user.

Arroyo, my point? Geez, I thought plain enough. It's information.

So, let me ask you a question, honestly, why do you think I posted this information? Please answer.


Posted by Arroyo, a resident of Another Pleasanton neighborhood
on Oct 21, 2010 at 11:21 pm

Mike,
I was unsure why you started the thread, since all the information was already published in the local newspapers. However, I forgot that many on this forum do not subscribe to the printed media, and may not have had the information you posted.


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