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View Full Version : Economics 10 Banks set to pay back TARP Money


dirk digler
06-09-2009, 09:01 AM
http://www.foxnews.com/politics/2009/06/09/report-allow-banks-repay-tarp-money/

WASHINGTON The Treasury Department has approved 10 of the nation's largest banks to repay $68 billion in government bailout money.

The department on Tuesday said the banks, which were not named, will be allowed to repay the money they received from the $700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis.

The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation.

Among the banks that passed government "stress tests" last month and likely were approved to repay the bailout funds are: Goldman Sachs Group Inc., JPMorgan Chase & Co., and American Express Co.

Experts say allowing 10 banks to return $68 billion in bailout money illustrates some stability has returned to the system but caution that the crisis isn't over. Some worry the repayments could widen the gap between healthy and weak banks.

More than 600 banks nationwide have received nearly $200 billion in TARP money and 22 smaller banks already have repaid it.

"These repayments are an encouraging sign of financial repair, but we still have work to do," Treasury Secretary Tim Geithner said in a statement.
The firms now have the right to purchase the warrants Treasury holds in their firm "at fair market value." Besides Treasury's potential income from the sale of the warrants, the 10 banks already have paid dividends on the preferred stock totaling about $1.8 billion over the last seven months.

Dividend payments received for all participants are about $4.5 billion to date, according to Treasury.

Northern Trust Corp. was not among the 19 banks subjected to stress tests, but that company also was in line to receive repayment permission, according to two industry sources with knowledge of the matter who requested anonymity because they were not authorized to discuss it.

The push to repay the funds comes a month after "stress tests" of the nation's 19 largest financial firms found that 10 needed to raise $75 billion more to protect against future losses. All of those banks, including Citigroup Inc. and Bank of America Corp., had submitted plans by late Monday to bolster their capital cushions that were enough to help them survive a deeper recession, the Federal Reserve said.

The other nine institutions had to prove they could raise enough private capital without federal guarantees before they could return the money.
So far, 16 of the 19 banks have raised $75.2 billion, mostly by selling common stock.

Regulators want to avoid letting a bank repay its TARP money only to have it return months later in worse shape, seeking another handout.

KC Dan
06-09-2009, 09:04 AM
What would make me pleased as punch would be if once the money is paid back that they subtract that from this gov't induced slush fund and can't reuse it without congressional approval. Anything short of that and I won't be happy. Having said that, I am very happy that they are paying us back and getting off the gov't.

KC native
06-09-2009, 09:05 AM
Bad idea. These same banks will be back at the government trough before long. They are facing another wave of foreclosures. They have implemented more opacity in their balance sheets (thank FASB for that crumbling) and unsustainable business models.

SBK
06-09-2009, 09:09 AM
http://www.foxnews.com/politics/2009/06/09/report-allow-banks-repay-tarp-money/

WASHINGTON The Treasury Department has approved

Seriously, how pathetic that they have to beg permission to pay back a loan?

dirk digler
06-09-2009, 09:09 AM
Bad idea. These same banks will be back at the government trough before long. They are facing another wave of foreclosures. They have implemented more opacity in their balance sheets (thank FASB for that crumbling) and unsustainable business models.

They did stress tests on all of these banks and if the banks and Treasury feel they are stable and are able to pay the money back I don't see what is not to like.

dirk digler
06-09-2009, 09:10 AM
Seriously, how pathetic that they have to beg permission to pay back a loan?

I would assume that they want to make sure these banks are stable and don't come back a few months from now asking for more money.

SBK
06-09-2009, 09:11 AM
I would assume that they want to make sure these banks are stable and don't come back a few months from now asking for more money.

In all seriousness, do you think the leaders of these banks or the government is more capable of determining how viable a bank is?

dirk digler
06-09-2009, 09:13 AM
In all seriousness, do you think the leaders of these banks or the government is more capable of determining how viable a bank is?

LMAO

Who was responsible for the financial crisis again?

I am not saying the government knows that much better but the banks fucked us big time by their greed.

KC native
06-09-2009, 09:16 AM
They did stress tests on all of these banks and if the banks and Treasury feel they are stable and are able to pay the money back I don't see what is not to like.

The stress tests were a joke. The scenarios were hardly stressful (meaning it's very likely that their worst case scenario will come to pass). Also, they lacked to the proper amount of staff to analyze these banks so they were dependent on what the banks told. Finally, the banks were allowed to negotiate the final amount with the government.

Throw in the change from mark to market accounting and we get financial companies that have low quality balance sheets with over valued assets. Long story short, while the credit markets aren't in panic right now we still have an insolvent financial sector.

SBK
06-09-2009, 09:16 AM
LMAO

Who was responsible for the financial crisis again?

I am not saying the government knows that much better but the banks ****ed us big time by their greed.

The government has a lot to do with the crisis as well. As does the federal reserve. As does Wall Street. As did greedy borrowers who borrowed more money than they should have been allowed.

petegz28
06-09-2009, 09:16 AM
LMAO

Who was responsible for the financial crisis again?

I am not saying the government knows that much better but the banks ****ed us big time by their greed.
Yes actually you are saying the government knows better.

Let's see who proliferated the crisis??
Tim Geithner??
Dem Congress??
Baraq Obama??

KC native
06-09-2009, 09:17 AM
In all seriousness, do you think the leaders of these banks or the government is more capable of determining how viable a bank is?

In all seriousness, what makes you think the same managers that ran these banks into the ground and have required taxpayer financing to survive are able to determine if they are viable?

KC native
06-09-2009, 09:18 AM
Yes actually you are saying the government knows better.

Let's see who proliferated the crisis??
Tim Geithner??
Dem Congress??
Baraq Obama??

Really pete? is it so long ago that you don't remember the history?

dirk digler
06-09-2009, 09:21 AM
The government has a lot to do with the crisis as well. As does the federal reserve. As does Wall Street. As did greedy borrowers who borrowed more money than they should have been allowed.

I am not disagreeing with you I just find it humorous that people would suggest that the bank CEO's know better when their companies greed are the primary reason why the financial crisis happened.

petegz28
06-09-2009, 09:22 AM
Really pete? is it so long ago that you don't remember the history?

I remember that a Dem controlled congress handed over billions of $'s blindly at the request of Messers Paulson, Geithner and Bernanke. And then President Barry came along and added billions upon billions of $'s more.

What am I missing? Unless you don't consider the ever-expanding deficit proliferation of said crisis?

petegz28
06-09-2009, 09:22 AM
I am not disagreeing with you I just find it humorous that people would suggest that the bank CEO's know better when their companies greed are the primary reason why the financial crisis happened.

If my choice in the matter is the CEO or a Politician I have to side with the CEO. But that is assuming the Politician let's said CEO fail if he makes a bad decsion as opposed to giving him my tax $'s.

KC native
06-09-2009, 09:25 AM
I remember that a Dem controlled congress handed over billions of $'s blindly at the request of Messers Paulson, Geithner and Bernanke. And then President Barry came along and added billions upon billions of $'s more.

What am I missing? Unless you don't consider the ever-expanding deficit proliferation of said crisis?

Um, let's see. Paulson asked for the money first (remember him? Bush's Treasury Secretary?). Or how about we go back to Chris Cox (former SEC chair) who refused to exercise proper oversight and even enabled these firms to lever up to absurd levels? Or how about we look at the time line of the whole crisis (it started in 2005)?

To say that this crisis proliferated under Democrats is nonsense.

KC Dan
06-09-2009, 09:25 AM
In all seriousness, what makes you think the same managers that ran these banks into the ground and have required taxpayer financing to survive are able to determine if they are viable?Banks answer to their shareholders. If they are wrong and they fail, so be it. The gov't is in bed with them anyway so it really doesn't matter. Tell me again, where did Paulson and the rest work before they were in gov't? jeez....

petegz28
06-09-2009, 09:26 AM
Um, let's see. Paulson asked for the money first (remember him? Bush's Treasury Secretary?). Or how about we go back to Chris Cox (former SEC chair) who refused to exercise proper oversight and even enabled these firms to lever up to absurd levels? Or how about we look at the time line of the whole crisis (it started in 2005)?

To say that this crisis proliferated under Democrats is nonsense.

Who approved the billions of $'s Paulson asked for? Would that be the Dem Congress? Who controlled Congress from 2006 on?

I never argued who started the crisis. I said who made it worse. And that would be your Democratic heros.

KC Dan
06-09-2009, 09:27 AM
Um, let's see. Paulson asked for the money first (remember him? Bush's Treasury Secretary?). Or how about we go back to Chris Cox (former SEC chair) who refused to exercise proper oversight and even enabled these firms to lever up to absurd levels? Or how about we look at the time line of the whole crisis (it started in 2005)?

To say that this crisis proliferated under Democrats is nonsense.And it's nonsense if I owe you money and I want to pay it back that you say no. Who the hell are you to say no? They want off the gov't and there is nothing wrong with that as that is how it should be. This is not supposed to be Denmark or any other EU country.

KC native
06-09-2009, 09:27 AM
Who approved the billions of $'s Paulson asked for? Would that be the Dem Congress?

I never argued who started the crisis. I said who made it worse. And that would be your Democratic heros.

Doing nothing wasn't an option. Despite your already biased revisionism, doing nothing as our economic system crumbled is unacceptable.

KC native
06-09-2009, 09:29 AM
And it's nonsense if I owe you money and I want to pay it back that you say no. Who the hell are you to say no? They want off the gov't and there is nothing wrong with that as that is how it should be. This is not supposed to be Denmark or any other EU country.

If they can't raise needed capital on their own and their entire existence was dependent on tax payer financing then they don't have a say. They get out from under the government when the government says they can. When you dance with the devil you wait for the song to stop.

KC Dan
06-09-2009, 09:31 AM
If they can't raise needed capital on their own and their entire existence was dependent on tax payer financing then they don't have a say. They get out from under the government when the government says they can. When you dance with the devil you wait for the song to stop.
They say that they raised the capital and the gov't agrees with them, why can't you? Are they all liars and you know best?

KC native
06-09-2009, 09:38 AM
They say that they raised the capital and the gov't agrees with them, why can't you? Are they all liars and you know best?

Oh, so when it's convenient for your arguments the government is right huh?

I've put in a good amount of work regarding the financial sector and knowing what's going on with them. I'm not the only one who is saying these things. You can ignore the massive gaming going on right now if you want but these banks are far from stable.

Have you read the stress test white paper because I have and the scenario they put forth is hardly stressful. It assumes a resumption of GDP growth in 2010. It has contraction through the rest of this year and then a resumption of GDP growth of about 2% going forward. That's a pretty rosy scenario if you ask me. It also ignored continued degradation in the banks loan portfolios (specifically on the commercial side). In short, yes they are lying and it will hurt us tremendously going forward.

dirk digler
06-09-2009, 09:42 AM
If my choice in the matter is the CEO or a Politician I have to side with the CEO. But that is assuming the Politician let's said CEO fail if he makes a bad decsion as opposed to giving him my tax $'s.

98% of the time I would too but right now all of these banks need alot of oversight.

dirk digler
06-09-2009, 09:45 AM
And it's nonsense if I owe you money and I want to pay it back that you say no. Who the hell are you to say no? They want off the gov't and there is nothing wrong with that as that is how it should be. This is not supposed to be Denmark or any other EU country.

As I stated before why does it makes sense for the banks to pay back the money and 6 months from now come back asking for more money? The prudent thing to do is what they are doing now. Make sure the banks are stable so we don't have a repeat.

KC Dan
06-09-2009, 09:48 AM
As I stated before why does it makes sense for the banks to pay back the money and 6 months from now come back asking for more money? The prudent thing to do is what they are doing now. Make sure the banks are stable so we don't have a repeat.
Agreed and that is why I say let them pay it back. The Treasury dept said go for it but KC Naive says no. Last time I checked we didn't elect him.

dirk digler
06-09-2009, 09:49 AM
Agreed and that is why I say let them pay it back. The Treasury dept said go for it but KC Naive says no. Last time I checked we didn't elect him.

Then we agree. :thumb:

KC Dan
06-09-2009, 09:50 AM
Then we agree. :thumb:
Affirmative, been doing that a lot lately. Feel kind of dirty....LMAO

KC native
06-09-2009, 09:51 AM
Agreed and that is why I say let them pay it back. The Treasury dept said go for it but KC Naive says no. Last time I checked we didn't elect him.

So, who did you elect over at the Treasury?

Mr. Flopnuts
06-09-2009, 09:51 AM
The government has a lot to do with the crisis as well. As does the federal reserve. As does Wall Street. As did greedy borrowers who borrowed more money than they should have been allowed.

Bingo. All that said, the only way this is acceptable is if the fucking government uses the money to pay some it's own bills.

petegz28
06-09-2009, 09:52 AM
Doing nothing wasn't an option. Despite your already biased revisionism, doing nothing as our economic system crumbled is unacceptable.

I partially agree. But handing over billions blindly and without any oversight or conditions was probably worse than doing nothing.

Mr. Flopnuts
06-09-2009, 09:52 AM
Yes actually you are saying the government knows better.

Let's see who proliferated the crisis??
Tim Geithner??
Dem Congress??
Baraq Obama??

LMAO I had no clue Barack was in office in 2007.

KC native
06-09-2009, 09:55 AM
I partially agree. But handing over billions blindly and without any oversight or conditions was probably worse than doing nothing.

I agree to an extent. Paulson was standing there asking for no strings on the money and was saying just trust me and the Dems caved into his demands.

Amnorix
06-09-2009, 09:55 AM
Seriously, how pathetic that they have to beg permission to pay back a loan?

It's complicated, and there's more going on here than a simple borrower/lender situation.

Amnorix
06-09-2009, 09:57 AM
Banks answer to their shareholders. If they are wrong and they fail, so be it. The gov't is in bed with them anyway so it really doesn't matter. Tell me again, where did Paulson and the rest work before they were in gov't? jeez....

What if they take the entire economy with them. Is that a "so be it" also?

Amnorix
06-09-2009, 09:58 AM
Who approved the billions of $'s Paulson asked for? Would that be the Dem Congress? Who controlled Congress from 2006 on?

So Bush wasn't in favor? He didn't support the TARP legislation? The Republicans have been Hooverish in saying we should stand back and let the free market resolve all the problems?

KC Dan
06-09-2009, 10:02 AM
What if they take the entire economy with them. Is that a "so be it" also?The US gov't has more than 100 times the debt with no way to pay if they had to other than printing money. I'm a little more worried about them. The US Gov't Treasury approved this payback. We elected BO, he nominated the Treasury Secretary and he was approved by our elected members of the Senate. They did stress tests (whether you believe the results or not) and said pay it back, you're ok. But, some would rather continue dolling out $$$ because they are ascared. I'm just glad that someone can't stop me from paying off my debts because my balance sheet doesn't please them.

I don't want a bank to fail but who are we supposed to believe here? KC Native? The US Treasury? The Banks?

KC native
06-09-2009, 10:06 AM
The US gov't has more than 100 times the debt with no way to pay if they had to other than printing money. I'm a little more worried about them. The US Gov't Treasury approved this payback. We elected BO, he nominated the Treasury Secretary and he was approved by our elected members of the Senate. They did stress tests (whether you believe the results or not) and said pay it back, you're ok. But, some would rather continue dolling out $$$ because they are ascared. I'm just glad that someone can't stop me from paying off my debts because my balance sheet doesn't please them.

I don't want a bank to fail but who are we supposed to believe here? KC Native? The US Treasury? The Banks?

You don't have to believe me but the work is out there by several others. Check out Meredith Whitney's work (she's an Oppenheimer analyst who has been spot on) or read Roubini's work on this, or go read Dr Hussman's weekly missives. There is an abundance of information out there that supports my claims.

KC Dan
06-09-2009, 10:08 AM
You don't have to believe me but the work is out there by several others. Check out Meredith Whitney's work (she's an Oppenheimer analyst who has been spot on) or read Roubini's work on this, or go read Dr Hussman's weekly missives. There is an abundance of information out there that supports my claims.Fortunately or unfortunately they are not in the Treasury dept and have no say. If they are so right, then BO should replace Geithner now.

KC native
06-09-2009, 10:09 AM
Fortunately or unfortunately they are not in the Treasury dept and have no say. If they are so right, then BO should replace Geithner now.

He should. He should also replace Larry Summers and Robert Reich.

HonestChieffan
06-09-2009, 10:24 AM
we should replace Obo.

Amnorix
06-09-2009, 10:37 AM
we should replace Obo.

You'll get your chance in 3-3/4ths years. :p

petegz28
06-09-2009, 11:19 AM
LMAO I had no clue Barack was in office in 2007.

He was a Dem Senator in the Dem controlled Congress, was he not? Not to mention the gross spending he has done in his short time in office.

petegz28
06-09-2009, 11:19 AM
So Bush wasn't in favor? He didn't support the TARP legislation? The Republicans have been Hooverish in saying we should stand back and let the free market resolve all the problems?

bla bla bla.....The Dems approved it.

wild1
06-09-2009, 11:24 AM
LMAO I had no clue Barack was in office in 2007.

He endorsed what they did, therefore, he owns it too.

memyselfI
06-09-2009, 07:59 PM
http://www.foxnews.com/politics/2009/06/09/report-allow-banks-repay-tarp-money/

The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation.
.

Money quote. No pun intended. :harumph:

Cannibal
06-10-2009, 02:00 AM
I would think the Right Wingers would be ecstatic about this.

Amnorix
06-10-2009, 06:48 AM
bla bla bla.....The Dems approved it.

So Democrats approving emergency requests from a Republican administration makes it a 100% Democrat problem?

And if the Democrats hadn't approved it, they'd take 100% of the blame for the fallout.

What exactly shoudl they have done?

Amnorix
06-10-2009, 06:48 AM
I would think the Right Wingers would be ecstatic about this.

They're reduced to throwing peanuts, so peanuts they shall throw.

mlyonsd
06-10-2009, 09:40 AM
Good, it looks like Bush's plan to solidify banks is working after all.

donkhater
06-10-2009, 10:34 AM
Why do most of you think this is good news? At best it's a non-story.

So the banks return the TARP money back to Congress. Big deal. Is Congress going to take it back out of circulation? Are they going to use it on other parts of the budget so the deficit isn't quite so large? Are they going to give it back to the taxpayers in the form of a refund?

OR...

Are they just going to treat the money as found money and spend it on something above and beyond the current budget? In which case it doesn't really matter that the money is getting returned.

Think about who we are talking about here and ask yourselves which is the most likely scenario.

Cannibal
06-10-2009, 10:43 AM
Good, it looks like Bush's plan to solidify banks is working after all.

So you were for the TARP legislation and it's working out for you. Grats. I'll look foward to more positive posts about the bailouts from you in the future.