This is just more banker-hating class war spin trying to ignore away the inconvenient fact that TARP worked, is being repaid, is making the treasury money not costing it money, and the banks are now sound as a result. Half the world predicted the opposite as loudly as possible, but they are immoral idiots and flat wrong about every scrap of it.
Wrong, they can sell stock, in a real market and then write a check on the monies and/or they can ask the bank owners to increase capital.
Talk to me in 8-10 years if another bubble doesn’t burst. Pieces of the market must be allowed to fail. BTW... TARP was a good thing? Now that we’ve given the government money, they are playing a shell game and spending it elsewhere. That’s a good thing?
After that statement I'm even more convinced you don't know your rear from a hole in the ground.
Calling a bogus trade with the FED repayment. Swapping tax payers monies for a different source of tax payers money.
Yes, I agree. This rescue seems to be well on its way to restoring banks that can be restored, and doing what is necessary with those that cannot.
I recommend to everyone that they read some financial history before they condemn this particular rescue. While in my opinion it would have been better if the original Paulson TARP bill had been passed rather than the bloated monstrosity that did pass, I would rather have had the ensuing year of progress rather than wholesale bank failures of institutions that turned out to be healthy enough to survive with some cash infused, and indeed, the taxpayer will most likely make money off of this whole episode.
The mechanism of using a preferred stock issue has proven itself to be a reasonable choice, though I think next time that we should forgo the kicker of common equity participation that was also thrown in.
Let us assume you have some idea what you're talking about. In that case, you know damn well TARP was/is a complete red herring. Regardless of TARP, the banks were going to make a killing once the FED started radically inflating the money supply by swapping toxic MBS and purchasing Treasuries & agency debt.
There have been no end to the number of snarky analyses of how easy it is for the TBTF to make $billions by borrowing at the -0- (taxpayer subsidized) discount rate and buy Treasuries ranging from 2-4%. Even better, of course, is that without Glass-Steagall and the aid of 20-50x leverage (yeah, Basel II met via AIG CDSs - yet another taxpayer subsidy), the prop desk sides are busy gambling via high-frequency trading computers all the free money the FED (actually, taxpayers) is providing them to gun equity markets to 80-100 P/E ratios.
Banks are now sound? Suspend mark-to-market much? A little 2 pt rise in GSE paper would send MBS values back down another $trillion or so. Can you say inadequate "reserves"? Oh, and what about the $3-4T the US gov't has to roll over/issue in 2010? Anything less than 0-2% rates will send the deficit past $2T. Think the FED can stop buying @ this point? Of course not, which is why the $USD is taking a temporary breather before another bout of QE takes the DX below 70.
Your posts are so invidious I might have to start browsing around FR a little more just to patrol the inanities you continue to spew on a daily basis.
I never thought these were a good thing.
L