Maybe the financial elites knew that at the time and were just saying what they thought might help them get government money.

You think?

Maybe the financial elites knew that at the time and were just saying what they thought might help them get government money.

Awww, gee, ya think?

Thanks, Masaccio!
This is actually quite disgusting. Looks like I really will have to move all my accounts over to my credit union, inconvenience be damned.

FunnyWheelieDiva

PS, wouldn’t and easy penalty be “No records, you pay it back NOW.” Since it was pretty obviously used to bolster their record earnings/profits, etc.

Whatcha drinkin’ this evening, Evans? (good Welsh name, that!)

FWDiva

It would be a refreshing change of pace if I could be surprised as well as appalled.

Sort of OT question, sorry, but I’ve been wondering forever about this. Smart folks on here might be able to help.

Didn’t the TARP money “count” against the deficit?? And if so, why is that, considering I thought it was to be paid back? And if so, what does that mean for the future budgets when it is paid back?

Probably wrong place to ask, if so disregard.

Just really liking this FDL place, never heard of it until a documentary I saw recently.

Of course credit didn’t expand. Like it or not that is a good thing. Credit was the cause and it cannot be the cure. Over and over financiers, liberals and even progressives try to square a circle. Attempting to find a way out of our dilemma.

Now I want to separate myself from the strict Austrian School. A fractional reserve banking and fiat monetary system can work and the roots of the system are democratic and intrinsically American. No system is perfect or perfectible. Every system is subject to capture by a small segment of people who then use their advantage to increase their advantage. There are legal and regulatory means to discourage this but in the end it takes cultural pressure.

There is a common compliant here and elsewhere that decrys the conservative calls to liquidate liquidate liquidate like JP Morgan did. The thing is that FDR did let the banks and corporations liquidate.

Let’s look again at FDR’s first inaugural address.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True they have tried, but their efforts have been cast in the pattern of an outworn tradition. FACED BY THE FAILURE OF CREDIT THEY HAVE PROPOSED ONLY THE LENDING OF MORE MONEY. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The highlighted sentence is the wisest part of this. More credit, for bankers, is not the answer. Of course the system needs credit but it has to be used wisely.

The thing that is holding me back is concerns about ATM fees. I use them regularly so I don’t have to carry a lot of cash, and I want the convenience without the fees.

Welcome. We’re glad to have you here.

Welcome to the Lake! No dumb questions here: we answer if we know. In fact, this is a great question. Treasury treats TARP as it would any expenditure: it counts against the deficit, and when it is repaid, it counts as revenue. That means that in the years that TARP funds are repaid, the deficit will be lower.

The alternative would be to treat it as an investment, and keep it out of the deficit. It would just go to the balance sheet, not the revenue and expense statement. That was the treatment given by the Congressional Budget Office. They estimate that every dollar will return some percentage, maybe 75%. They record expenditures of $.25 per dollar of TARP money, and adjust later if it turns out differently.

And there’s also the debt — not deficit — calculations, which folks often confuse. TARP expenses are counted against the debt as they are incurred, and repayments then are included in the revenues that would reduce the debt as they come in.

Lots of the GOP ranting talks about running up the national debt, as if none of this will ever return.

As a former risk management analyst, recently –but not currently– operating under the auspices of BAC (previously, C), I am legally prohibited from agreeing with masaccio commenting on this matter.

Uh, people I am no freaking genius, but I worked as a temp for at least four of the five major banks. Since I was a temp what I learned as a temp would never bother anyone. Most of the damn banks gave me access to their central computers. The ones that didn’t, the manager, VP or whomever would have to sign me in with their personal code, and they DID not make me stand aside while they did it. I amused myself by tracking things and fixing and covering cracks, but at ANY of those banks, eventually I could run a complete balance sheet of everything and trace every dime. The banks found me useful with my experience.

Don’t ever lie to me and tell me that a bank cannot account for every dime they got or gave.

The exception was when First Interstate Bank was absorbed by Wells Fargo, who were stupid enough to tell the processors of the check filming unit when they would be canned. Amazing, a couple of days and there were at least ten to fifteen tapes of checks that were blank after the beginning of the reel and had something at the end of the real. When I worked on cleaning up that mess, I figured Wells Fargo lost $10 to $50,000,000 without wincing. I just filed it under incredibly stupid. Gotta admire a bank that knows how to do a takeover.

Plus, they NEVER ever checked to see if a TEMP owed them money. Hell, I owed unpaid credit card debt of over $30,000 to the banks that I temped for.

Lots of the GOP ranting talks about running up the national debt, as if none of this will ever return.

Thanks for the anwers and welcome folks.

This particular quote is why I’ve been wondering. And of course, the right wing media that we have doesn’t ever bring this up.

Sounds to me from masaccio’s response that CBO does it about right, although I thought I heard somewhere that some portion had already been paid back, and that portion had actually made a profit for the government, though it’s possible I’m misunderestimating that. *G* (Isn’t nice to finally have a President with a brain, again?)

Probably iced (or at least cold) tea. However, I believe I have a bottle of beer in the fridge. Gotta check if it’s okay with the antiviral first, though: some drugs don’t mix well.

Belated welcome to you, buddy. Hope you stick around. Lots of good info and smart folks here, and I’d love to know the answer to your question, too. So, keep asking…honest requests for info are treated well here. Sometimes with a link to previous posts/comments.

Best,
FWDiva

There have been returns, and we have made some money on TARP money with banks, and probably will make some money on some of the other programs. It looks like the big problem is the AIG money. There is a fair chance of loss there.

Well, cin cin! Hope you’re feelin’ better soon, since you’re on antivirals.
FWDiva

Sounds like the people who bitched and moaned about sending money into space, even though it all stayed here in paychecks and money spent for materials and supplies.

Idjits.

Ah. I often go for “cash back” at a merchant for this reason. No direct extra fee to me. But that’s assuming my CU debit card would be accepted there, too. And that I could get one of those visa-debit type cards…

FWDiva

It’s only temporary: the antivirals will disappear next week. (Beats having the full-blown condition, I have to admit. Although I’m hoping the intermittent aftereffects don’t last long: a case of roofing only goes so far in the fun department.)

You would think that a bank would have better controls on its investments, loans, and spending. But then, this is BofA ….

Hey, we don’t call ‘em Bunch of A**Holes for nothing!
FWDiva

I am not suggesting that we could borrow our way out of problems. Far from it. However, many of our businesses depend on availability of credit to stay open. The justification for TARP was that it would increase availability of credit, which was necessary to keep the economy from collapsing.

Banks did not lend, and many small businesses were hurt by sudden demands for repayment, refusal to renew lines of credit, and increased fees and interest. This and others of my posts are meant to show that the stated justification for TARP programs is false.

I think that Paulson and Bernanke meant what they said about the need for credit, and I think it was mostly true. I also think that the banksters were lying, and that they fully intended to use the money to stay alive with no thought to the needs of the broader economy.

I think the lack of credit to businesses is a serious problem even today.

He lost his position on CNBC as one of the rising stars in financial land because he wasn’t afraid to speak truth to power. Today on his new show over at MSNBC Dylan Ratigan let lose with the help of Eliot Spitzer. This is the best answer as to where the TARP funds have gone and why both the Federal Reserve as well as the Obama administration don’t want you to know where the money has gone.

http://www.huffingtonpost.com/…..44617.html

Maybe the financial elites knew that at the time and were just saying what they thought might help them get government money.

Well, of course they did. And the lying continues …

At the House hearings today, the names of those companies that we will never see a return from were addressed. AIG 180 billion. Citi 45 billion. The car companies 50 billion and counting. 17 trillion in bad private as well as commercial real estate debt that will have to be sold for pennies on the dollar and the list goes on. All the Fed has done is monitize this debt and privatize the losses with the bill going to the US tax payer. And you wonder why the Fed won’t tell us where the money went? When you take into account the total of the bailout funds to banks and others as well as our unfunded liabilities such as SS, Medicare and Medicaid, the US is currently in a hole for over 65 trillion dollars.

masaccio- okay, I need help. What is your “take home message” here? TARP was a good thing? TARP was not a good thing?

You should be able to track into which accounts at the banks the money went but money is fungible. So where it went could have freed up money to go somewhere else and do something else. For this reason, you really do need to know more generally what the banks were doing. Now we know that banks have only been doing some selective lending. It isn’t much of a stretch to come up with Barofsky’s list.

But there is a lot more to the story. For example, what were the banks doing with the credit lines they had to the Fed and Treasury, in particular the FDIC? Also you have to keep in mind that banks have been allowed to overvalue their assets and write down their debt. It was these things that saved “the banksters from abject failure.” The TARP money, especially for the big banks, was just an add-on and something of a cover to distract from all of these other things that were being done.

I would say that the TARP was mostly about PR. About 15 minutes after it was enacted Paulson knew his reverse auction for toxic assets was a non-starter. The loans were a convenient fallback. Their raison d’être was to free up credit markets and shore up banks. They obviously didn’t do the first and in my previous comment I noted they didn’t do the second. It is the very large programs that we don’t hear too much about plus the accounting changes plus the government refusing to move against the really big insolvent banks that has led to the current respite. But it is important to remember none of the fundamental problems were resolved or even touched. So the prognosis remains what it always was: best case, Japanification of the economy for the next decade, worst case, a very bad depression. The math to me still favors depression.

One of the worst things, IMHO, is that the big banks used TARP funds to get bigger, by buying up smaller banks. That was NOT the intended purpose.

Bob in HI