The TARP Has a $159 Billion Loss!!
By Larry Doyle on July 1, 2009 at 1:01 PM in Bailouts, Economy, Sense on Cents (Larry Doyle blog), TARP
The American taxpayer was going to make money on the investments in assets related to Bear Stearns, AIG, Citigroup, Bank of America, ad nauseum, correct?
Is it even possible to track the massive government outlays across the entire economic landscape? Is it further possible to measure the actual cost of the outlays as a percentage of the overall subsidies? Can we navigate this terrain without getting bogged down in the midst of a thicket of government data and statistics? You have come to the right place.
Subsidyscope has just released a report, entitled Estimated TARP Subsidy Rate Rises, which links to a report from the Congressional Budget Office highlighting all aspects of the TARP (Troubled Asset Relief Program).
Just as “you can’t tell the players without a program” when attending a sporting event, “you can’t track Uncle Sam without Subsidyscope and Sense on Cents.”
What do we learn? Uncle Sam is still holding some TARP firepower. The TARP was launched as a $699 billion capital commitment. If you recall, the TARP legislation was passed as a vehicle to purchase toxic assets from banks. It has moved a long way away from that.
The TARP now covers 4 initiatives:
1. capital purchase and repayments from financial institutions
2. additional support for large financial institutions
3. financial assistance to automakers and related businesses
4. other actions, such as mortgage modification, TALF subsidies, and purchasing securities backed by Small Business Administration loans.
To be perfectly frank, I think it is very plausible that the actual capital commitments and activities ongoing under the TARP may not have met the pure letter of the initial legislation. That said, in an environment in which so many initiatives are capital constrained, there is no real legislative pushback. When was the last time we worried about the spirit or letter of our laws when we had bigger issues concerning money?? Money is more important than legal precedents, correct? We’ll get into that on another post.
On the numbers front:
Of the $699 billion in total capital, $142 billion has yet to be committed. Of the funds already allocated, Uncle Sam has incurred a total cost of $159 billion. What does that mean?
Recall the number of times that government officials told taxpayers that we would make money on investments in AIG and the like. Well, so far we’ve lost $159 billion dollars across all our TARP investments. The loss is calculated as the difference in funds committed and allocated to securities and the market value of those securities. That loss represents 36% of the funds committed and actually allocated.
Not that anybody in the media or the financial industry would want you to know that.
Program, here….get your program….step right up…program, here!!
Enjoy the ballgame, folks!!
LD
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HOOORAY!!! Oh, wait. That’s our money . . .
I’d also like a little transparency. They still haven’t told us who is getting what under TARP, have they? Bloomberg News had filed a lawsuit in November regarding this. What kind of country are we living in?
The country formerly known as the United States of America.
Kiss it all goodbye. The Government has been gambling with all of our futures and lost. Purposely, I think!
I agree.
Who’s getting what under TARP. Well, here’s my guess at a how a large part of the skeleton is structured: The TARP bone is connected to the AIG bone. The AIG bone is connected to the Goldman Sachs bone. The GS bone is connected to the NYSE manipulation bone. Of course, I could be wrong.
http://zerohedge.blogspot.com/2009/06/nyse-halts-transparency-feels-goldman.html
This is an outrage. I want to puke!
Administrator: please help. My comment drifted too close to the black hole of the Almighty Spam Filter and was compressed into a nonexistent singularity.
In some kind of a bastardized hybrid cross between pre WWII Italy and the former Soviet Republics.
Why am I not shocked or surprised? And yet, there are still pundits and economic wizards saying we will absolutely make money off these lousy, less than transparent deals. All the creative accounting in the world cannot turn an oinker into a silk purse. But the lies just keep rolling down the road.
And is money more important that law? Sadly, there’s no question about it. The shim sham continues and the band plays on.
It’s pretty dispiriting!
“Recall the number of times that government officials told taxpayers that we would make money on investments in AIG and the like.”
The government doesn’t make money. It costs money. People would be wise to remember this when voting to increase its size and scope.
Oh and belatedly, thanks for another great post LD.
Larry … could you comment on Germany’s Merkel’s proposing tax cuts to resurrect German economy, especially pertaining to Ozero’s penchant for spending money before the Fed prints it?
But the simple answer is Merkel wants to resurrect their economy and Obama wants “change”. Just as cap and trade isn’t about the environment, so stimulus isn’t about the economy… both causes have been hijacked into the larger “change” agenda.
That’s probably why net zero was giving her the “evil eye”. It was at the top of Drudge a day or so ago.
I would like a LOT of transparency. I’m tired of hearing Obama people say we have to spend money to accomplish the Democratic goals. 1. This is not the time to be implementing a bunch of social programs that cost billions when the country is going bankrupt. 2. I object to the feds taking people’s hard-earned money and there is no way of knowing where our money goes. One thing we know, the politicians are never lacking funds for any extraneous thing they desire. And, the president’s (whether Bush or Obama) key constituency are being paid handsomely with tax dollars.
I never like Obama, but I’m getting seriously worried that every bill he pushes through will tax people who are working and give our money to the blocs of voters who voted for him. He doesn’t care about a good American society and economy, he only cares about staying in office–just like GWB.
Slightly OT but it fits in
Democratic Rep. Marcy Kaptur gets $3.5 billion in taxpayer money
http://www.washingtontimes.com/news/2009/jul/01/sweetener-helped-sway-vote-on-house-climate-bill/
Thanks for this info; I read the link. A 3:00 AM amendment with Rep. Kaptur’s name on it, and then, her yea vote for the bill, certainly gives the appearance of impropriety. Before this news, I truly believed she was one of the good ones.
And that money is likely coming from the crap and tax bill. Al Gore has started a wall street exchange business for the bloviator’s crap and tax money…I don’t know details but you can google it.
From Instapundit: Tyrannosaurus Debt.
I feel like this is part of the manufactured crisis to bankrupt the nation to create marshall law and government tyranny.
The crap and tax bill will invade our privacy and empty our wallets.
The inspector general who is supposed to oversee this money has no idea where the money went to and she doesn’t even know WHO knows where the money went to. Anyone want to take a guess? Yes I guess I’m beginning to get the true meaning of tax evading Timmy’s “stress test”. He’s stressing us alright.
Even the swine flu is manufactured because there are 3 strains not commonly found other than manufacturing it…yep…we knew the bloviating zero one would be a nightmare.
And now there’s evidence that he disses Hillary.
What a stupid, rotten man. Why does he need the best and the brightest when he doesn’t listen to their advice. Can we have our real president take the oval office now? She won fair and square.
http://hillary.foreignpolicy.com/posts/2009/07/01/hillary_clinton_pressed_obama_to_talk_tough_on_iran
‘Meant to say-She won fair and square even with her stolen votes and MI/FL delegates.
i think my dem. senator voted against it.
All we see from a little working stiffs point of view is that everybody in New York’s Stock Exchange and the3 companies involved have not seen a lick of the suffering the average Joe is experiencing on the home front. We all are afraid we might lose our jobs any minute just like our friends, neighbors and relatives. The prices at the grocery store, the gas station, our insurance bills and utility bills are going up. The collectors have become more aggressive. The electric company, gas company, cable company and phone company will no longer hold over a balance past the due date - its shut off faster that you can blink an eye. I can’t even go into the credit card stuff and I’m very conservative with those. Its really despair and dread all over the place. So one day there might be a return on the massive bailouts? I’ll be a roaring drunk by the time that happens. A martini or 2 after work has become the only thing that enables me to relax as I worry about what tommorrow holds and I know I’m not the only one. Suggestions for harder, but cheaper mind-numbing substances are welcome. But thanks LD for keeping us aware of this stuff. I don’t bother to watch the news anymore, not that it matters.
The banks? They still aren’t lending. Obama and wonder boy Treasury man…forgot that little item in their give away. So our money is their money andtheir money which is our money can not be loaned to us by them…so what’s new? Mr. Change man and Mr. jingle the coins in your pocket man/…? Nothing…only things are much worse under Obama …
What a fraud.
The banks? They still aren’t lending. Obama and wonder boy Treasury man…forgot that little item in their give away. So our money is their money andtheir money which is our money can not be loaned to us by them…so what’s new? Mr. Change man and Mr. jingle the coins in your pocket man/…? Nothing…only things are much worse under Obama …
What a fraud.
P.S. - Sorry, forgot to tell you great post!
Quick, Spend the Money Before the Rubes (Taxpayers) Find Out.