Feature

Is TARP turning a profit?

The $700 billion bank bailout will probably cost much less, and may even end in black ink.

Turning a profit was “hardly high on the list of government priorities last October,” when Wall Street was teetering, said Zachery Kouwe in The New York Times. But in a “welcome surprise,” the TARP bank bailout has already started making money for taxpayers. According to the Financial Times, the Federal Reserve has raked in $14 billion in fees and interest, said Andrew Belonsky in Gawker. “Maybe Ben Bernanke really did know what he was doing.”

“If you believe that,” said Yves Smith in Naked Capitalism, “I have a bridge in Brooklyn I’d like to sell you.” Credit 101 teaches that “your best borrowers repay first,” and our tiny profit stems from the few healthier banks that have repaid the TARP. Red ink bleeders Citigroup and AIG are fundamentally no better than before, and the place we've made the biggest profits, stock warrants, we should have made much, much more, given the risk we assumed.

Even if we break even on the controversial $700 billion bank bailout program, said Daniel Gross in Slate, that’s still better “than a poke in the eye,” and better than many people expected. There’s still a decent chance taxpayers will come out ahead on the TARP, but if we end up “out some large chunk of cash,” at least let’s place the blame where it belongs: “the incompetence and greed of bankers and the nonfeasance of regulators charged with overseeing them.”

Recommended

Why is Riyadh going it alone on oil cuts?
An illustrated image of oil rigs and oil barrels
Today's big question

Why is Riyadh going it alone on oil cuts?

Jamie Dimon 2024?
Jamie Dimon on Capitol Hill
Profile

Jamie Dimon 2024?

MoviePass stages a Hollywood comeback
MoviePass illustration
Briefing

MoviePass stages a Hollywood comeback

Nvidia joins the trillion-dollar club
Nvidia
Feature

Nvidia joins the trillion-dollar club

Most Popular

Can Chris Christie make a comeback?
A black and white photo of Chris Christie waving
Profile

Can Chris Christie make a comeback?

Is Trump's wall working?
International Border Wall Between Tecate California and Tecate Mexico.
Briefing

Is Trump's wall working?

Orlando's Gay Days draws LGBTQ crowds to Disney World amid DeSantis feud
Gay Days at Walt Disney World in 2023
Come as You Are

Orlando's Gay Days draws LGBTQ crowds to Disney World amid DeSantis feud