Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (36630)	8/31/2009 3:05:08 PM
From: wlcnyc	Read Replies (1) \| Respond to of 71588

"....Nearly a year after the federal rescue of the nation’s biggest banks, taxpayers have begun seeing profits from the hundreds of billions of dollars in aid that many critics thought might never be seen again, The New York Times’s Zachery Kouwe reported...." nytimes.com Does that mean Bush gets credit for that program and the results? Bill

To: DuckTapeSunroof who wrote (36630)	9/1/2009 7:30:59 PM
From: TimF	1 Recommendation Read Replies (1) \| Respond to of 71588

Bailouts Make Money, If You Ignore Losses Posted by Mark A. Calabria Just when you think the headlines could not get any more absurd, the Wall Street Journal declares today that the “Bailouts Yield Returns Amid Risk.” while yesteday’s Financial Times lets us know that the Federal Reserve is turning a profit on its lending programs. What is missing from these headlines is that while some loans and investments have provided a positive return to taxpayers, the overall programs themselves are estimated to cost the taxpayers hundreds of billions. Overall the government has received about $30 billion in dividends, premiums for guarantees, and interest payments: $7 billion in TARP dividends from banks, $14 billion for the Federal Reserve from purchases of mortgage-backed securities and other investments, and $9 from the FDIC’s bank debt guarantee program. While $30 billion may sound like a substantial amount of money, it is less than a tenth of the $356 billion that the Congressional Budget Office tells us we will never see back from TARP. And the Fed’s income from purchasing Fannie and Freddie securities will also amount to about a tenth of the ultimate losses we are likely to suffer from bailing out those entities. In regard to the FDIC’s debt guarantee program, premiums are paid up front, making that look like income, while the guarantees will remain outstanding for several years. Given that there is currently almost $340 billion in FDIC guaranteed bank debt outstanding, all it would take is a loss rate of 2.6% on that debt to wipe out any premiums collected so far. Before Washington starts to spend all its newfound earnings, we should all stop and remember that these bailouts continue to leave the taxpayer in a pretty big hole. cato-at-liberty.org