$7.5B made off Citibank on bailout stocks?

[MarylandMark]

The Treasury Department said Monday it will begin selling the stake it owns in Citigroup, which could result in a profit of more than $7.5 billion.

So......was it a good move now? I flamed the bailouts, but could they have been a good thing if we are making money on the deal?

Or are we really making money on the deal?

http://www.usatoday.com/money/indust...itigroup_N.htm

[BBB725]

Government and private business should never mix

[sledge]

On a "per investment" basis, we're profiting on most. We haven't gotten every last penny back as some "investments" aren't paying or are pretty much losers. I don't know the exact figures, but something like 70-80% has been paid back already. It might end up that the profits on the winners cover the losers and "we the taxpayer" will net zero loss.

[phragle]

Don't forget the unnamed number that it took for the govt. to actually process and maintain that debt. The govt does nothing cost effectively, so take the private sector cost and multiply by 4 or 5.....

[JupiterSunsation]

On a "per investment" basis, we're profiting on most. We haven't gotten every last penny back as some "investments" aren't paying or are pretty much losers. I don't know the exact figures, but something like 70-80% has been paid back already. It might end up that the profits on the winners cover the losers and "we the taxpayer" will net zero loss.

There was a bank the other day that missed its 3rd consecutive quarterly loan payment......

[Von Bongo]

If you follow what really went on, not what made the front page but what really happened and what is still going on with TARP to date there is a nice profit for the tax payer so far which includes the preferred dividends paid, the warrants that were either sold or redemed and in the case of C a profit to turn on the sale of the preferred stock that was converted to common shares.

Back in February the estimate is the government had made $15 billion.

Now here's the deal.We all remember the $700 billion price tag that made the news about every minute. Of that the actual amount loaned was $545 billion and of that $200 billion went to "Banks". Of that 200 bil, I think the number repaid is around $164 billion so far.

Another $85 billion went to AIG and to my amazement I think that given enough time they may get it paid. They have made some sales recently.

The $25 billion that went to GM and Chrysler will not be repaid by them, but will be paid by the forthcoming tax on banks, more on that later.

But that said the initial investment overall in TARP will be repaid in full regardless of who it went to. Regulators will not let banks increase dividends to shareholders because of pending regulation and taxes that will in the end pay for TARP no matter who it went to. Banks will be tapped to repay GM, GMAC and Chrysler who have no hope of paying back the government in anyone's life time. Also with CIT's bankruptcy that TARP money will fall back to banks again.

AIG actually is making strides to repay, which I doubted would happen but given enough time they may actually get it done.

The real problems is as it always is no matter what party controls the purse is, they are starting to take the repaid money are spending it to other programs like HAMP which have no source of repayment except taxes on someone or something.

Another huge problem is the debt the 3 GSA's have and their unlimited credit line and will take a huge tax (on the banks or consumers probably both) to make up their losses, and the more troubling part is no one wants to tackle the millions getting added to this debt each month they continue to operate although there have been a few mentions of it in the last month, mostly they are being avoided.

So in a nutshell. So far $15 billion profit. Most of the "banks" money repaid. All will be repaid by taxes...err...fees charged to the top 50 banks (so far) to make the consumer whole.

How much the government diverts to other programs and gives away is anyone's guess??

[MarylandMark]

Thanks for the insight!

I don't like the current administration but trying more to look at things at an even keel vs too far right/left even when the right is right most of the time.

[sledge]

I don't like the current administration but trying more to look at things at an even keel vs too far right/left even when the right is right most of the time.

Don't forget this was originated under Bush/Paulson with the intent of infusing liquidity into the banking system. From that perspective it's a huge, perhaps profitable, success.

Don't forget the unnamed number that it took for the govt. to actually process and maintain that debt. The govt does nothing cost effectively, so take the private sector cost and multiply by 4 or 5.....

Sorry phrag, one thing Treasury/FRB knows a little about is managing debt, and overseeing banks. Definitely expenses for outside legal to develop the program and each non-bank deal, plus fees to advisors, but otherwise not a big administrative boondoggle. I'd say anywhere from 1-3% for outside fees and minimal additional personnel.

[Tommy Gun]

Remember...its all Bush's fault.