OK, looking in more detail, I think the Wiki link is probably the best comprehensive link. Almost all of the outstanding stuff wasn't money provided to banks - it was money provided to Fannie, Freddie, and the FHA. To clarify my earlier post to rhad, I don't know if that part of the money will be recouped. I suspect it will be over time when the housing market recovers, but it's a bit more of a complicated issue there. But those were failures by government institutions - not banks. They should never have been buying all this crap on the terms they did, and I don't really fault banks for selling stuff to them. That seems to total about $1-$2 trillion. Most of those mortgages will continue to get serviced, so the potential loss is only a subset of that amount - but I don't really have a sense of how big a subset. For a lot of the other trillions, I think SF's post clarifies that. A lot of this was overnight lending. It gets borrowed in exchange for collateral so the bank can show it on its balance sheet overnight, and then gets repaid the next day and then repeated. So if I borrow $10B each day for a year, that's potentially $3.65 trillion in borrowings. I don't know how they are accounting for all that, but that could easily explain the $9 trillion. If done over the course of a year, that could be as little as $30 billion in actual debt outstanding at any given time. This is all certainly true. But the government also made a profit on this; and the banks putting the money back in the economy would have made the banks unstable again. The whole purpose here was to recapitalize the banks to prevent them from collapsing. As for the TARP repayments, much of that money was raised by issuing new shares and diluting shareholders. The government wasn't allowing them to repay TARP with overnight borrowed money. I agree with the fact that we lost a lot of paper wealth due to greed and fraud - we see that in the recession we faced; and banks were hugely complicit in that and were the instigators and enablers. But the greed extended on to middle America living beyond it's means as well. Individual's balance sheets were just as messed up as the banks, though an individual doesn't have too-big-to-fail implications. I don't think the solution to fix it is unsustainable. It will, however, take time. It means living on less credit and repairing balance sheets. It means taking out less loans and shrinking the amount of available credit out there. These are ugly processes, and there's really no way around that part of the fix.
There are a whole host of people and companies complicit in this mess that deserve punishment, be it from fines, jailtime, or well-deserved poverty. It has not happened. Many (most) have gotten even more wealthy. At the heart of it, this is what makes me the most upset about TARP. After a previous debate some time ago with Major I (reluctantly) concluded it was necessary. But it's so horribly wrong regardless. What was needed was something to prevent the above "necessary" argument, a set of regulations that actually worked to limit or undo the "too big too fail" mantra that underlines much of the TARP rationale. That did not happen, unfortunately - although I'd argue that failing hardly unexpected.
Hey, look. It's the Fed continuing to try to help out the banks! http://www.mcclatchydc.com/2010/12/01/v-print/104568/fed-wants-to-strip-a-key-protection.html EDIT: I realize this isn't really the place for this post but it definitely wasn't threadworthy and I thought it might interest some people
Interesting... I would like to borrow money at 1% and make 20-40% please. Oh wait, I'm little enough to fail. Still, it's good the Fed is making a 1% profit on these repaid loans. Yay!
As soon as I can get enough of you suckers to stop believing in "capitalism" ... because really, it's just code word for "get the poor to support the same system that keeps us in control and them in misery."
Lame. I'm interested in righting an injustice, not suicide. Rest assured, when I've convinced enough suckers like you that they've been suckered - then it's time to burn Wall Street to the ground.
TARP Profit on Citigroup: $12.3 Billion WASHINGTON—The U.S. is set to record a net $312.2 million from its sale of its final 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department said Wednesday. The sale of the warrants, expected to close Monday, will allow the government to dispose of the remaining stake in Citigroup obtained through the Troubled Asset Relief Program, or TARP. Overall, taxpayers are expected to end up with a $12.3 billion profit on the government's $45 billion investment in the company during the 2008 financial-sector bailout. Last year, Treasury sold its 34% stake of common shares ...
You've been suckered into zealously adopting a viewpoint that works against you and against others like you - you are a boot licker of billionaires. Congratulations.
