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You're right about Iraq, but I thought TARP actually turned a profit? http://money.cnn.com/2014/12/19/news/companies/government-bailouts-end/ http://money.cnn.c

You're right about Iraq, but I thought TARP actually turned a profit? http://money.cnn.com/2014/12/19/news/companies/government-bailouts-end/ http://money.cnn.com/2014/12/19/news/companies/government-ba...

Symmetry 10y ago
It did but there was no guarantee it would. So you could say the Iraq war cost trillions but TARP put most of a trillion at risk.
youngtaff 10y ago
TARP might have made a profit but the impact of very low interest rates has been detrimental for some and huge benefit to others
djsumdog 10y ago
It doesn't matter that it turned a profit. That wasn't the point; and in some ways that makes it worse! PNC bought National City for $5 billion. National City (an Ohio only bank) was not allowed to apply for TARP. Then PNC got a $5 billion tax credit. They bought a bank for free. http://www.newsproject.org/node/181/ http://www.newsproject.org/node/181/ All the consolidation meant that banks gained a lot of money, and the US government bought debt $1 for $1. Instead of TARP, the US government could have done something for...the people you know? The attorney general could have pushed prosecuting all the people who committed fraud (forging income documents for home loans was rampant, lying to people about home loans, etc.) from the top to the bottom. Banks should have been forced to sell loans back to consumers for quarters on the dollar (you know, what the homes were actually worth now). We saved some retirement accounts, and everyone above 50 at the time was very thankful for that, but young people lost their homes, tons of money and the banks didn't take a hit at all. They just got stronger and swallowed other banks.
- prewett 10y ago
  When the statement was that TARP cost $1 trillion, the fact that it actually made a profit very much IS the point. Your entire rant is what's not the point in this discussion.
marcusgarvey 10y ago
I don't think it can truly be said that TARP turned profit. Because TARP was actually structured as the purchase/hedging of banks' securities. And it is impossible to know profitability of securities without knowing their Sharpe ratio, which no one knew at the time because all their valuation models were garbage as all the defaults happening in real-time soon made apparent.
- caminante 10y ago
  I don't think it can truly be said that TARP turned profit[...] And it is impossible to know profitability of securities without knowing their Sharpe ratio, I think you're mis-interpreting the Sharpe Ratio and saying something different. Profit -- ex-ante or post-ante (edit: ex-post, brain fart!) -- is always a profit.[0] Whereas, you're arguing that the profit (on a risk-adjusted basis) wasn't that good. [0] http://www.investopedia.com/terms/s/sharperatio.asp http://www.investopedia.com/terms/s/sharperatio.asp
blakeyrat 10y ago
TARP turned a profit; it was still a bad use of the money. The US government shouldn't be responsible for propping-up bad business, and if the problem is identified as "this bank is too big to fail", the solution certainly shouldn't be making the bank bigger with low-cost loans.
- randyrand 10y ago
  yes, but the us =does have a responsibility to do wjat is best to help the economy. your statement is good, but only in hindsight. we didnt have that forethought before the crash. its a useless statement.

Symmetry 10y ago

It did but there was no guarantee it would. So you could say the Iraq war cost trillions but TARP put most of a trillion at risk.

youngtaff 10y ago

TARP might have made a profit but the impact of very low interest rates has been detrimental for some and huge benefit to others

djsumdog 10y ago

It doesn't matter that it turned a profit. That wasn't the point; and in some ways that makes it worse! PNC bought National City for $5 billion. National City (an Ohio only bank) was not allowed to apply for TARP. Then PNC got a $5 billion tax credit. They bought a bank for free. http://www.newsproject.org/node/181/ http://www.newsproject.org/node/181/ All the consolidation meant that banks gained a lot of money, and the US government bought debt $1 for $1. Instead of TARP, the US government could have done something for...the people you know? The attorney general could have pushed prosecuting all the people who committed fraud (forging income documents for home loans was rampant, lying to people about home loans, etc.) from the top to the bottom. Banks should have been forced to sell loans back to consumers for quarters on the dollar (you know, what the homes were actually worth now). We saved some retirement accounts, and everyone above 50 at the time was very thankful for that, but young people lost their homes, tons of money and the banks didn't take a hit at all. They just got stronger and swallowed other banks.

prewett 10y ago
When the statement was that TARP cost $1 trillion, the fact that it actually made a profit very much IS the point. Your entire rant is what's not the point in this discussion.

marcusgarvey 10y ago

I don't think it can truly be said that TARP turned profit. Because TARP was actually structured as the purchase/hedging of banks' securities. And it is impossible to know profitability of securities without knowing their Sharpe ratio, which no one knew at the time because all their valuation models were garbage as all the defaults happening in real-time soon made apparent.

caminante 10y ago
I don't think it can truly be said that TARP turned profit[...] And it is impossible to know profitability of securities without knowing their Sharpe ratio, I think you're mis-interpreting the Sharpe Ratio and saying something different. Profit -- ex-ante or post-ante (edit: ex-post, brain fart!) -- is always a profit.[0] Whereas, you're arguing that the profit (on a risk-adjusted basis) wasn't that good. [0] http://www.investopedia.com/terms/s/sharperatio.asp http://www.investopedia.com/terms/s/sharperatio.asp

blakeyrat 10y ago

TARP turned a profit; it was still a bad use of the money. The US government shouldn't be responsible for propping-up bad business, and if the problem is identified as "this bank is too big to fail", the solution certainly shouldn't be making the bank bigger with low-cost loans.

randyrand 10y ago
yes, but the us =does have a responsibility to do wjat is best to help the economy. your statement is good, but only in hindsight. we didnt have that forethought before the crash. its a useless statement.