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??
