The Political Environment: TARP Bailout: What A Failure! Wait...What's That? It Isn't?

Friday, June 11, 2010

TARP Bailout: What A Failure! Wait...What's That? It Isn't?

We didn't socialize the banks?

Or lose our collective shirt?

What will the Right complain about after the public's share of GM is sold off - - for a profit?

5 comments:

Anon Jim said...: James – I realize you think that linked article is all sunshine and lollipops and taking into consideration your public sector background, let me translate the article into the real world of private sector finance.

Of the $384 Billion loaned out via TARP, $194 or 50.5% has been paid back. Sure that’s good but what are the expectations for getting the remaining 49.5% back?

The article says the expected “cost” of the TRAP program is now $105 Billion, is that a fancy way of saying they expect to lose that much money on the program.

You might consider that a huge win for the Left, but in the real world a -27.3% rate of return is not a good thing.

Regarding your anticipated profit from the sake of the GM stock, please link even one article from a credible source that projects that ever happening.; June 13, 2010 at 11:43 AM
James Rowen said...: http://topnews.co.uk/26434-initial-public-offering-gm-stock; June 13, 2010 at 10:46 PM
Anon Jim said...: Could you give us some background on the website TopNews and the journalist Simrat Kang before that is deemed a "credible" article.

Curious that the projected valuation range starts around the break even point for the government.

And no response on the negative "profitability" of the TRAP program?

Maybe a $105 Billion loss is no big deal to you, but it will be for our grandchildren.; June 14, 2010 at 9:59 AM
James Rowen said...: Vhttp://www.businessweek.com/news/2010-06-11/morgan-stanley-jpmorgan-said-to-lead-gm-s-stock-sale-update1-.html; June 14, 2010 at 10:25 AM
Anon Jim said...: James - thanks for linking that interesting BusinessWeek article.

It says more than once the sale might raise up to $12 Billion, not sure how the Feds make a profit on that when we have at this point in time $42.2 Billion still invested in GM.

If you can explain where the profit is, please illuminate us.

And even if they are able to negotiate a bargain rate of 2%, JPMorgan Chase and Morgan-Stanley would still get a $240 million commission. Guess that explains their political donations to Obama of $695k and $515k respectively.

An average rate of return of around 20,000% on their “investments”, now that is a sweet return.

In addition the article makes a reference to GM wanting to re-establish an automotive lending unit before the stock sale. Please note GM’s previous lending unit, GMAC, is now called Ally Financial of which the government is the majority stakeholder via the $12.5 Billion in even more TARP funds it was given.; June 15, 2010 at 10:30 PM