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Tarp Overseer Debunks Bailout Myths: Big Companies HAVEN’T Repaid Tarp Funds … And Funds to Help Homeowners HAVEN’T Been Paid
Apologists for government bailouts push two main myths:
- That all of the bailout funds have been repaid
- That the bailouts helped the average American
But the official government overseer of the Tarp bailout program – the special inspector general for TARP, Christy L. Romero – has debunked both myths.
Today, Romero wrote the following to Congress:
After 3½ years, the Troubled Asset Relief Program (“TARP”) continues to be an active and significant part of the Government’s response to the financial crisis. It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost).
And earlier this month, Romero stated that the portion of the Tarp funds which were supposed to help homeowners haven’t been disbursed:
A fund to support homeowners in the communities hit hardest by the collapse of the housing bubble has disbursed just 3 percent of its budget and aided only 30,640 homeowners in the two years since its creation, according to a report released on Thursday by a federal watchdog office.
The Hardest Hit Fund, which was created in the spring of 2010, grants money to state housing finance agencies for efforts to help families that are facing foreclosure. It has “experienced significant delay” because of “a lack of comprehensive planning” by the Treasury Department and limited participation by Fannie Mae, Freddie Mac and the large mortgage servicers, said the report by the special inspector general for the Troubled Asset Relief Program.
“Look at the TARP money that goes out to the banks,” said Special Inspector General Christy Romero in an interview with The Huffington Post. “That goes out in a matter of days. This has been two years and only 3 percent of these funds have trickled out to homeowners.”
Indeed, bailing out the big banks hurts - rather than helps - the American economy. See this, this and this. (And it doesn't take a PhD economist to guess that using bailout funds to buy gold toilet seats and prostitutes is probably not the best way to stimulate the economy as a whole).
The only way to really stimulate the economy would be for the government to give money to the little guy on Main Street – instead of the big boys on Wall Street. And see this.
Yet the big banks continue today to be bailed out through a wide variety of overt and hidden schemes … while the little guy gets nothing.
This is true even though the American people were opposed to the bank bailouts from day one, and continue to oppose them:
As I’ve noted since 2008, Americans are united in their overwhelming disapproval for bailouts to the big banks.
This has remained true right up to today.
As Rassmussen found only last month (as summarized by KXLF news):
Today’s Rasmussen Reports survey finds that most Americans don’t like bailouts for financial institutions.
60% Oppose Financial Bailouts; 74% Say Wall Street Benefited Most
Survey of 1,000 American Adults
***
• Just 20% think it was a good idea for the government to provide bailout funding to banks and other financial institutions, but 60% say otherwise.
• While many activists try to link the Republican Party and Wall Street, Republicans think the bailouts were a bad idea by an eight-to-one margin.
• Those not affiliated with either major party think they were a bad idea by a four-to-one margin. Democrats are much more evenly divided. Thirty-four percent (34%) of those in the president’s party say the bailouts were a good idea while 42% disagree.
• Overall, 68% believe that most of the bailout money went to the very people who created the nation’s ongoing economic crisis, but 12% disagree and 21% aren’t sure.
[And see this]
As the Washington Post’s Greg Sargent notes, the recent proposal from lobbyists to the American Bankers Association recommending ways to co-opt the Occupy movement accurately stated:
Well-known Wall Street companies stand at the nexus of where OWS protestors and the Tea Party overlap on angered populism. Both the radical left and the radical right are channeling broader frustration about the state of the economy and share a mutual anger over TARP and other perceived bailouts. This combination has the potential to be explosive later in the year when media reports cover the next round of bonuses and contrast it with stories of millions of Americans making do with less this holiday season.
(Except that it is the majority of Americans – not “extremists” on either side of the aisle – that share this anger).
The “Tea Party” movement was centered on the protesting government bailouts of the giant banks, before it was hijacked by the mainstream Republican party, Sarah Palin, Neocons and others. See this, this, this, this and this.
Ron Paul said last month at a GOP debate:
Bailouts came from both parties…. If you have to give money out, you should give it to people losing their mortgages, not to the banks.
And one of the most common sayings of Occupy Wall Street protesters is:
Banks got bailed out. We got sold out
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Geez, if I ever thought there'd be this many douchetards on comment zomes, I'd never have created the original hyper link nor done all that work on the datacom protocols allowing for backbone communication.....
Being respectful to elders and all; I hate to agree on the generational thing...
Watching commercials of retirees zooming around on "free" medicare electric carts with cup holders pisses me off a little.
How many 20, 30, 40 y/o people will ever able to retire?
Never mind a sleek cart and electric stair climber...
Pension. LOL. That's cute.
"The TARP money not repaid remains with the generally small banks and the auto companies."
Can you cite a source on this?
"There was no money "GIVEN" to the banks"
Did they "EARN" it then?
"If the large financials had imploded in 2008 / 2009 Geo Wash and many others would be plucking chickens and digging dandelions for meals."
Really? Some would argue that this has been merely postponed and when it occurs it will last longer.
Goldman paid it back.
BAC paid it back.
Wells Fargo paid it back.
JP Morgan paid it back.
Citi paid it back. Govt still owns some shares.
Morgan Stanley paid it back.
Fifth Third paid it back
Sun Trust paid it back.
Regions Bank paid it back.
PNC paid it back.
I believe Zions is the only bank receiving $1 Billion or more which has not repayed 100%. Zions has repaid about one half of the $1.4 billion they got.
The auto companies were a last minute Dem add on to Tarp, not part of the Paulson plan. Funding for those was increased under O'Bummer and the Taxpayers will be stuck. Along with the autos, GMAC became a bank and big TARP recipient. that is Alley bank and I don't know about repayment.
Just think, all those banks would be gone now.
Financialization would be over and we'd be living in a free market capitalism.
Just as the tribes do in the Amazon. It is "natural" so i am sure you look foreward to it.
You're way off your rocker now. Better stay in the CNBC comment section.
You will die of old age before you get a substantive link for that- I'd bet a plucked chicken that he heard it on TV or the radio and lacks the mental horsepower or curiosity to look further.
The TARP money not repaid remains with the generally small banks and the auto companies.
There was no money "GIVEN" to the banks, otherwise there would be no repayment expected. Some people cannot comprehend that feature as they never have repaid the government benefit checks they have received.
If the large financials had imploded in 2008 / 2009 Geo Wash and many others would be plucking chickens and digging dandelions for meals.
No, if the insolvent banks were recapitalized via the BK process by converting their bondholders debt into equity in a reorganized bank only the people stupid enough to buy the debt and equity of the banks would have suffered-and of course, that includes pension funds, private equity firms etc but tough luck-that's real capitalism. This is how it should have been done, truly creative destruction and removal of management and their boards. When this happens again-and it will lets learn to force debt into equity-and let those foolish enough to loan capital to banks, insurance companies and car companies suffer the losses not the taxpayer.
And people like you would have repented or starved to death. Capitalism takes out the garbage. That's why it works.
Capitalism takes out the garbage. That's why it works.
____________________________________________
Garbage is still taken out. But US citizens have taken out so much the rest of the world can no longer absorb.
So bits have to be parked in the US.
Augustus,
You can indeed say that TARP wasn't a giveaway to the banks. But ZIRP and QE are the giveaways that enable any repayment of TARP.
Hohum,
No doubt that banks are somewhat benefitting from cheap funding under ZIRP. However I view that as more directed toward housing than banking. It also benefitted me directly in that I got a 4% loan on the paid off house and bought 10% yielding MLPs. It has worked well as the distributions have increased and the mortgage payment is fixed. Banks need to have a spread, it has always been that way, that is the business. There are not really any spreads to be made. The comments that banks can make enormous profits from buying 30 year bonds at 4% yields are just nonsense. Banks don't take on that type of pricing risk.
To the extent that TARP was used by banks to fund or staunch the outflows, that is correct. It is not much different from the situation in the Jimmy Stewart movie with the bank run. The fact that the TARP bank funding was repaid somewhat vindicates the move and the idea that it was successful in preventing that implosion event.
Translation: I loves me some socialism if I can make a buck off it.
Yet another government dependent little porker with his snout in the trough whose only principles are apparently determined by how useful something is to himself.
Translation - Lednbrass was a dumbass who could not qualify for a home loan anyway.
It is not becomming of you losers to keep putting the jealousy on display.
How much did you earn over at the park this evening?
The Ponzi was ripe for an implosion and it's still ripe for an implosion because it never imploded. Forestalling the inevitable IS a grand fucking HANDOUT/GIFT (whatever you want to call it) to the bankers.
This idea TARP wasn't a give-away is pure nonsense and it needs to stop now. TARP covered a shortfall of inflows the Ponzi operators didn't have at the time. Later, when inflows resumed they were able to pay it back. Not only was it a gift from government to keep the Ponzi inflated, it was the end of any vestigial free market.
Bahahahahahaha
Bank shills make me laugh sometimes...Give me a break.
Don't pee on my leg and tell me its raining.
~ Judge Judy
Better to die on your feet than live on your knees.
Banks are just another business. Everybody moans when GM gets bailout money. But ooh, banks are somehow in some special category, we should prop up the zombie ones, instead of letting capitalism try and work for a change. Hank Paulson was like a "suicide banker", came to Congress with a three-page memo strapped to him and said "I'll blow myself up if you don't give me $700 billion RIGHT AWAY". It's terrorism, plain and simple.
When the Fed buys mortgage-backed securities from banks that are worth $0.50 and the Fed gives the bank $1.00 for them, that is a GIFT. Still $1 trillion of those on the Fed's balance sheet in case you feel like looking. When the Fed loans banks money at 0.25% and let's them immediately redeposit at 400 b.p. higher, that is a GIFT.
So don't give me your right-wing BS about the banks not getting any bailouts. Go away.
Read the article again. It's a left wing thing with the bailouts....smarten up.
OpenThePodBayDoorHAL
Paulson did have a three page memo.
Then Barney Frank and the Dems wrote the plan to direct the money to their constitutients. Now they call it the Bush bailout to try to cover up the fact that it was a Dumpocrap plan that went into law.
The Fed has some MBS on the balance sheet from AIG. There are more from active Fed decisions to try to keep rates low, not because of a bailout plan.
The Fed has sold a lot of the assets purchased in the Bear wind down and salvaging AIG. You can confirm that if you know how to look.
Don't expect me to "give you" anything but an opportunity. It seems that you need a brain transplant to be able to understand what that is. Come back when you finish rehab.
LOL...
You are one SOB.
Didn't I read somewhere that the big banks DID, in fact, payback the TARP money by borrowing it from another gov't agency?????????
Can't give you any links but I am almost sure I read that somewhere..........maybe here on ZH?
If you read the latest GAO report, you certainly would have.
Banks are just like another business, except the USA has a central bank in charge of the currency.
BS Augustus. If the Fed gov. had put the full faith and credit behind retail deposits of cash and let the bond and equity holders take the hit, we wouldnt be in the mess.
Centurion9.41
There is a government institution that does that - FDIC.
The large financials have repaid the TARP funding. Did you miss that part?
Repaid, in that they were not GIVEN the money.
.
The bailout of AIG was a gift to Goldman Sachs. Instead of GS being bankruptured, they were made whole at 100 cents on the dollar. Since the bailout technically went to AIG, GS had no legal obligation to repay.
They have a moral and ethical obligation to repay, but on Wall Street such quaint notions as obligations, morals, and ethics (and, for all effective purposes, legality) are foreign concepts which only apply to mortgage slaves.
Bullshit. We would actually be in the process of a meaningful rebuilding without an incompetent financial sector protected by an encroaching government picking winners and losers.
Even so, whats wrong with plucking chickens? Someone has to do it.
Ledenbrass,
It was not intended as a putdown on your family trade. It simply is not considered an aspitational occupation by many in the population. As you note, someone has to do it and I'm glad you found a calling.
The financial sector is actually doing loan underwriting now. It is not the same as it once was for you, demonstrate a pulse and qualify. However, it should make it a good opportunity for you to make some money loaning out your cash to the unqualified deadbeats that won't reapy. Go ahead and get rich.
Oh, give me a break you mincing twerp. Fact is you are the one that cant get by without the gubmint rescuing a farcical "industry" and burning everyone else so you can essentially live on the dole.
Better a chicken plucker then a chicken fucker. Now go shave your legs and hit the clubs princess.
Lednbrass,
You already got a break. You wern't born a bug.
Since you are a pickled brain poofter, it was not much improvement for the planet.
My guess is that you are living in a squat and riding a bicycle to your appontments in the park to get some easy cash. If you do have chicken, it is from the welfare kitchen or stolen. If you know who your daddy was, how many generations back do you have to go to find someone with employment for more than six months? Did they pass their favorite wig down to you? Or was it the merkin?
There are obvious misguided dumb butts, then are the ones such as you who are simply brain defective and permanently disabled. Hope you can keep drawing a check when the system implodes from the welfare monstrocity you create.
LOL
What a weak ad hom. You cant deny that you talked from both sides of your mouth and certainly dont have the intellectual capacity to understand the massive incongruity in what you say, but I'll play.
Hardly, you limp wristed little pillow biting urban queen. You are the one arguing that it was a good thing the gubmint saved us all, not me. I dont need the federal government for much of anything. If the entire financial system and federal government imploded tomorrow, my family will get by just fine, my biggest problem will be not running out of ammo having to shoot your sort. You will die, and quickly.
Are you really that damn stupid that you cant see a huge philosophical inconsistency in your stated positions on taxation and TARP? Are you that weak and entirely unskilled that you cant picture survival without the government injecting vast amounts of capital into the financial system at taxpayer cost? And you start calling the guy mocking you for your dependence on government to save your useless hide a government dependent?What a fucking moron. Turn off your TV and break your radio, they have left you a drooling idiot. The world is just lights, sounds, and pretty colors to you isnt it?
Since you seem to care about my genealogy, my family has been university educated for centuries, thanks for your concern. Not only do I know my father well enough, but who my great great great great great great grandfather was-and can read his writing and those of quite a few in between. I am happy that you are proud to be the first in your family to struggle through community college, but it hardly makes you special. You really arent a special and unique little snowflake- your mommy lied. Youre just another weak juvenile beta male baboon who cant live without a keeper to watch over him spanking little Mr. Monkey and flinging poo.
The University of Phoenix has not been around long enough for your claims to be true. Why create those tales of fantasy about getting spanked by a baboon? Were you mistreated in the orphanage?
You've demonstrated that you cannot keep a complete thought in your defective poofter mind. I wrote nothing about taxation.
Your nonsense posts bring visions of someone running with people in flapping white coats chasing to catch. You should go back to the institution and let the medications calm you down.
Thanks for the laugh George.
You write this as if anyone on the fucking planet gives even one good goddamn!
Funny stuff... funny stuff.
Its not made to be funny. It is made to generate hits . Shocking bombshells+ curiosity+click = $$$$$$$$$$$$$$$$$$$$$$$$
Simple, buddy, is this stuff too complicated for you? There's always Fox News.
Hey Bikey, PS dumbass, you obviously dont watch Fox but rather liberal shows that talk about Fox. If you doubt it, then ask yourself why Fox has been the only major news source to give fair and honest view of the Tea Party and the 99%ers?
Fox is far far more of a ZH/libertarian mind than the rest of the MSM.
Dude, I don't trust any MSM, and I am not a liberal. The Tea Party has been, regrettably, co-opted. You'd have to come here to learn that. Fox News won't tell you.
BTW I agreed with your comment below, so chill out, stick around and find out where people are coming from.
The Tea Party screwed up when they allowed themselves to be taken over No Taxes Grover. The No Tax Change for anyone position effectively killed any possibility of Tax Reform because when you transform the current Tax Scheme to any other system (hopefully a straight %), someone somewhere is going to pay more than they were paying. And the MSM is going to find that person and put them on the air 24x7 and say how unfair the new tax plan is. Grover is an idiot and the Tea Party screwed themselves. They needed to keep it simple and just push for a new Tax System that is a straight % on any income.
And I don't want to hear how investment income is a double tax because it isn't. The principal invested was originally taxed but the gains were never ever taxed and the last I knew, they only tax the gains.
And why should they advocate taxation when the goal is a reduction in the scope, size, and role of an out of control Federal authority? The problem is that Uncle Sugar is an out of control crackhead that wastes money, not that he doesnt take enough.
Of course you don't want to hear about . . . . or . . . .
You swallowed the BS that makes you believe that someone else should pay for your "stuff" and cannot afford to be disillusioned.
But, just to make your day.
Dividends are paid from earnings AFTER CORPORATE TAX.
Listen to you, what a hypocritical little dickhead. On the one hand you complain that this guy wants more taxation, and in the next defend the government playing central planner to rescue an industry of brainless retards that should have been smashed into oblivion by the iron fist of Darwin.
Are you such a fucking idiot that you cant see the total philosophical inconsistency, or are you just so dependent on sucking the government teat to provide you with some income at the expense of having an actual free market to determine who lives and dies financially that you dont realize what a whining little faggot you are? Your statements boil down to "Dont tax me, just prop me up when I need it cause I need my latte and hair products and a new iGizmo".
Absolutely stunning hypocrisy. Pick a direction ya gutless social parasite. At least the lefties are honest about what they want (much as I generally despise it), youre a closet statist and who wants to pretend otherwise. This is the logic of the "Get the Government out of my Socialist Security" crowd, crying little weasels who want government intervention and central plannng but just dont want to pay for it.
Lednbrass
You are obviously a hypocritical Great Big Dickhead. What a shame that you grew that instead of a brain. I guess one advangtage is that it keeps you from hitting yourself in the face when you give it a fast wank and the hand slips off.
Who is going to pay you when O'Bummer is out and there are no more jobs for the paint watchers?
Hypocritical how? Where was I inconsistent? Go ahead, point it out. Youre the jackass arguing two different sides. Im quite consistently against federal intrusion into the economy or my wallet, youre the little pussy boy who wants the gubmint to save you.
And what the hell does Obama have to do with anything you government dependent worm?
What does Obama have to do with anything?
The old news is that he was elected President of the country. I suppose that is news to you, dumbass. Your man O'bummer favored the TARP plan all the way and assured you that there would be no cost to the taxpayer. That is why you supported him, for his honesty, and because he has a history of coke use as you do. You claim to be against intrusion while cashing the benefit checks for the shakey symptoms. It is not intrusion when you get paid, is it. You're the prancing poofter who would get joy from setting dogs on fire or seeing people starve.
Why the hell would I vote for Obama? In political terms I make that average big government repub (you) look like a freaking communist.
Amongst the long list of our differences, here is a big one. I operate from core philosophical principles and dont deviate- minimal centralized government, minimal taxation, and minimal intrusion into peoples lives. I dont like repubs because they are far too reliant on big government, most are as progressive as the left in terms of their belief in using central authority to make life good for them.
You on the other hand joined a team (Team Elephant) and advocate whatever its official policies are regardless of any principle whatsoever or how much it disrupts an actual free market. Yours is the mindless cheering of a sports fan, you just root for your stupid team no matter what. If the TV and radio commenters support TARP, you do too. I dont and wont because it is another example of where the Federal government has meddled where it shouldnt, and gutless repubs loves them some government intervention as long as it supports their wallet.
Your mindless team spirit has left you so mentally deficient that you see anyone who is actually quite serious about principles your useless party theoretically supports (minimized government, non interference in markets) as somehow being an Obama supporter because its all you have. You simply arent bright enough to understand it any other way- you only see a simpletons equation in your head: Not Official Republican Party Stance = Obama Supporter. You really are that dumb. You cant argue in terms of political philosophy or ideology because you dont really understand them, you only parrot what the captains of your team say. It is bad enough to rely on other mens brains to know what to think, you have compounded your error by listening to morons.