TARP is showing signs of life - pt 2

[hanratty21]

The U.S. Treasury Monday pledged to sell all of its 7.7 billion Citigroup common shares in 2010, signaling a wind-down of the banking giant's bailout at a potential profit for the government.
...
After briefly trading higher, Citi was down about 2 percent at around $4 a share in mid-morning trade, making the stake potentially worth $31.8 billion, a rate at which taxpayers would earn a profit over their $25 billion acquisition cost.

http://www.cnbc.com/id/36081059

[Loyal Rogue]

Does this mean I have to give Bush credit for doing one thing right now?

[silverx2]

when it says tax payers are going to see a profit, does that mean i am going to be getting a check in the mail for about $100?

[Frets]

I didn't like ti then I don't like it now.
The only concession I will make is that it shows the U.S Government does a better job of managing assets then the idiots who got themselves into the mess.

[hanratty21]

Does this mean I have to give Bush credit for doing one thing right now?

Actually, this particular part of the various transactions with Citi occurred during Obama's administration. You'll notice the bi-partisan tone of my post. It's about the program kids, not red/blue states.

when it says tax payers are going to see a profit, does that mean i am going to be getting a check in the mail for about $100?

Does this require an answer? When you read in the paper that the government is cutting spending, do you get paid on that transaction too?

I didn't like ti then I don't like it now.
The only concession I will make is that it shows the U.S Government does a better job of managing assets then the idiots who got themselves into the mess.

Fair enough on not liking it...but let's get our facts straight. Citi stock was $5.23 on August 28th, 2009. They're down 20% since that point. Now, who's the idiot for not selling some then?

[silverx2]

"a rate at which taxpayers would earn a profit over their $25 billion acquisition cost."

key word is tax payers, of which i am one, in order for me, a tax payer to earn a profit, i would in turn need some way to realize said profit. thats the key difference in this instance, compared to your analogy of "government is cutting spending, do you get paid on that transaction too" where in this instance would denote that as a whole they are trying to lower costs to come more in line with the amount of money they have to spend.

Profit != lowering costs
Government spending != taxpayers seeing a profit
your Analogy = FAIL

in short stop being a *****

[hanratty21]

Taxpayers never see a rebate (rebate, not refund) or a profit sharing or a portion of revenues. The government is not a publicly traded corporation of which you are a shareholder and can reap the benefit of an 'up' year. This just does not compute. Your simple attempt at posting what you thought would be a cute comment in this thread was the only fail here, champ.

In theory, when 'taxpayers earn a profit,' the profit earned should be applied towards future spending by the government. This (again, in theory) should reduce the amount of tax money needed for the federal government to operate. If this all happens (it won't) then you should see a cost savings in the amount of tax due by you as an individual in order to help to government operate.

What you DO get out of all of this is proof that the plan put forth by those in charge over the last 2 years has actually done it's job. The major financial institutions which were deemed too big to fail (whether they were or not) are still in business. Part 2 - the money used to save them from failure is continuing to be paid back. In this case, it's coming back in to the coffers of the treasury with a profit attached.

Your personal 'bonus' lies in the fact of knowing that you live in a country that has slightly less global debt than it had yesterday. Congrats.

[Frets]

While your argument may merit substance. Your ad hominem attacks are neither warranted nor welcome.
I will therefore advise you Silver to keep your statements civil Silver. As Hanratty made no effort to attack you he smiply expressed a response to your analysis.

[FlashLackey]

Meanwhile, Wall Street continues the same moral hazard practices that they did before they were bailed out and most of the people who suffered the consequences (outside of Wall Street) are still cleaning up the mess without help.

If that's a sign of life, we need to stomp on it.

[hanratty21]

Well, I guess innuendos and generalizations without merit will continue to plague this thread. I'll back out gently with this clarification...

$25,000,000,000 = cost of Citi investment by Uncle Sam
$31,800,000,000 = value of said investment today

'nuff said.

[FlashLackey]

$31,800,000 - $25,000,000 = $6,800,000

Cost of %10.4 unemployment + record high foreclosure rates + doing the same crap > $6,800,000

[Frets]

FL please check your numbers. While your equation is correct for the values you provided. The values you provided are not the same as the actual numbers.

The Obama administration did put together a jobs program initiative that you did not support. I find it disingenuous that you who support outsourcing and do not agree that the government should provide solutions to the unemployed are now complaining about the unemployment rate.

The record high foreclosure rate has much to do with the lack of regulation over the mortgage industry. All parties signed on the dotted line. You the outsider don't have any say in what is contracted by other individuals in a free market. You don't play the game you don't make the rules. So says the free market. You as an insider who may have been either the perpetrator or the victim of said situation made a bad decision and now have to face that bad decision.

[Loyal Rogue]

I have to agree with FL.

Holy sh*t, did I just say that?!?

Just because one aspect of TARP is making a return certainly doesn't outweigh the fact that if Wall Street continues the same practices that got us into this mess without learning anything then we are just setting up America for a fall that will make this recession look like a cakewalk.



*edit* This wasn't in response to Frets' post. Frets posted while I was typing.

[FlashLackey]

FL please check your numbers. While your equation is correct for the values you provided. The values you provided are not the same as the actual numbers.

I did only make a quick search for those figures, I'll admit. It's possible that the sources I found weren't the best or most up-to-date. Since you are saying that they are wrong, you must know what the actual numbers are. Can you provide those?

The Obama administration did put together a jobs program initiative that you did not support. I find it disingenuous that you who support outsourcing and do not agree that the government should provide solutions to the unemployed are now complaining about the unemployment rate.

Frets. You have misunderstood me entirely if you think that I don't care about employment rates. One of the reasons for my positions on economic policy is that I want us to have the best employment rate possible.

Jobs can't simply be mandated. They need to be created by employers according to supply and demand. Government intervention in business frequently creates unintended consequences for employers and thus employees.

The current situation is a good example of that. By creating a giant in Fannie and Freddie, giving them both advantages over other lending institutions and financially unsound directives, government orchestrated the rules of the lending industry that failed us. The financial crisis was a failure of relying on government regulation rather than market forces.

I have to agree with FL.

Holy sh*t, did I just say that?!?

Just because one aspect of TARP is making a return certainly doesn't outweigh the fact that if Wall Street continues the same practices that got us into this mess without learning anything then we are just setting up America for a fall that will make this recession look like a cakewalk.

Heh. Despite our battles, I think that we could find more that we agree about than disagree... if we tried.

If they can count on government to bail them out and avoid negative consequences for risky practices, what motivation do they have to change? Not taking advantage of that gravy train just puts them behind the competition that does.

It takes two to tango and if homeowners who bit off more than they can chew have to pay the consequences, so should the lender that sold them the product.

[gerbick]

I like the fact it's all coming back. That whole "risk" worked out in our favor. I don't mind that.