TARP Repayment

Major, you know the vast amount of money they are getting back is money from those who didn't need a bailout. This makes 32 banks out of the over 600 that received funds. Will Citi, GMAC, or BOA ever pay back their bailout funds?

 

TARP is gonna cost fifty billion gazillion katrillion over time OMGOMG, my great great great great great grandchildren is gonna be payin for this Socialist Prez.

 

You know as well as anyone that TARP was passed under the Bush regime, and our great grandchildren will be paying for the Stimulus plan. Don't let your sarcastic Republican fear mongering cloud the truth. You will confuse T_J that way.

 

you're right, but I'm talking all the estimates that came out after the original plan that were counting short term loans and guaranties as money that was going to have to be repaid over the long term associated with the bailouts.

 

If the government hadn't bailed out AIG, I would like to see how some these banks like GS would have done.

 

This is certainly good news, money coming back with interest. Which we may never see with the auto bailouts.

Which begs the question, what will Geithner do going forward essentially holding this huge revolving credit line? Remember people were predicting 700B weren't enough and Paulson/Geithner would have to come back for more.

 

Weren't you one of the people who didn't believe the government would be paid back much at all?

There were only 3-4 people on this board who were saying the money would come back to the taxpayers.

 

never said that, I do sometimes criticize the people who are anti government aid everywhere else but have no problem bailing out big business. but I was pro bailout, didn't like the fact that we bought capital, thought it should have been used as originally set up.

 

I don't see much of the AIG funds getting paid off anytime soon - their asset sales have flopped.

 

true, probably won't get paid back from AIG. If the money they recieved went to payoff transactions with other banks to prevent them from collasping, so be it.

 

That's why it's kind of a cop-out for these other banks (like GS) that benefitted hugely from the AIG bailout to claim that they are completely safe, don't need gov't funding, only participated in the TARP because they were forced to etc - without the taxpayer assistance to AIG they would have been DOA. I really think there should be some way to get $$$ back from them to pay for AIG.

 

What did happen with that 2nd half of money? They seemed eager to use it, and I thought they were going to go with the buying up of toxic debt plan. I thought they were even considering asking for more at one point. Was the mortgage crisis not as bad as predicted? Are they using it as emergency money? Do they even still plan on using it?

 

What about the billion paid out to John Paulson who paid $22 million for a Lehman Credit default swap!!

I agree the AIG bailout was a secondary bailout to the banks/ibanks. One concern is that the banks are thinking not as institutions but as individuals. With all these restrictions/caveats to taking tarp funds many execs are pushing bs numbers to raise capital (GS/MS) and then paying these funds back when they probably shouldn't because their execs don't want caps on earnings etc.

My fear is that they pay it back before they can and that restricts credit and lending which adversely effects everyone.

 

What? GS etc. collected on legally written contracts from AIG. Just because the AIG swap desk people were idiots and the fact that US government decided to bail them out doesn't mean others should pay for them. GS benefited being part of the chain that is the financial market, just like the auto parts suppliers benefited from the GM bailout.

 

Sam makes a legit point, its like the bailout is starting at AIG who is the cause of the mess for a large part writing contracts they never had capital to cover. So its like AIG is now just a government insurer using tax payor money that will never get paid back.

you're just substituting AIG for government. so you are right, but I think you are being sensitive as usual to someone criticizing wall street bankers which i really don't think was sam's aim.

 

What? So they could have just gone Chapter 11 and GS would have been able to extract their 15-20bb in exposure, scot-free, and been fine? Cause that's not what we heard last fall....and I'm inclined to think that, 160bb of public investment later, it probably wasn't the case.

It's almost as laughable to claim that GS isn't at all at fault for tying up billions of dollars with an overextended counterparty in a business that neither they nor the counterparty fully understood.

Oh? Well if it's not others, guess who gets to do it? You and me....So you'd rather pay for it yourself? THat's funny, because I recall you b****ing relentlessly for years about tax increases (in particular, yours personally, which I think we established would be pretty minor). Did you have a sudden change of heart and are now willing to foot this bill?

 

I would guess GS understood the counterparty risks a lot better than AIG. Hey they signed a legal contract that paid them accordingly, it really doesn't matter where the money comes from. We decided to bail out AIG to save the whole financial system, you could argue that benefits everyone.

BTW, you don't need to make assumptions about my tax situation. Its irrelevant in this thread.

 

Obviously they didn't understand them well enough since they had 20 bb tied up with a company that went from impregnable to insolvent overnight. Unless you are telling me that was their risk strategy?

whatever, you always made it a point before to mention how you personally would be affected. How about you answer the question though, is it more fair for you to have to pay for GS risk taking or for GS to pay?