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46 Companies Behind on TARP Payments
American taxpayers may be unable to recoup their bailout money from 46 companies that had missed dividend payments to the government by the end of September. Analysts expect that many bailed-out firms will fail or struggle to repay the government in the coming months. CIT Group is under bankruptcy protection after receiving $2.3 billion from the Troubled Asset Relief Program. United Commercial Bank of San Francisco, which at the beginning of the month became the first to collapse under TARP, cost taxpayers $299 million. Of the TARP program, former Assistant Treasury Secretary Phillip Swagel said that "the taxpayers certainly have gotten a very strong return on many of those investments, but it's inevitable that when you invest in hundreds of institutions, some of them are going to go bad."
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If I were behind on my house payments what would the bank do? Let's let THAT be our guide and start repossessing!
Let's see.. we forget to pay these banks and our credit score goes down at the least..and our homes get repossessed at worse....
WTF!!!
We saw a first wave of foreclosures on homes with ARM mortgages.
We are seeing a second wave of foreclosures from those who have lost their jobs and can no longer afford to pay mortgage payments.
In a few months we will see the foreclosures on homes with unpaid mortgage balances far higher than the home is worth. If you are paying on a mortgage with a balance of $300,000 and your home is currently worth $200,000 why continue to stress out over $4,000 per month mortgage, insurance and tax payment when you could rent for $800 per month?
There was a time when I felt a moral/ethical obligation to pay my mortgage. Considering that the banks are receiving government aid in billions of dollars and still threaten me with late payments, I am beginning to see my responsibility in a different light.
Aww....I don't think any citizens have to worry about that. After all....how many citizens got "bailed out" of their money mismanagement? None that I know of but then I don't count Congressmen as citizens either.
This whole series of bailouts was a disaster for America. I suspect history (if America as we know it somehow survives the current powers that be) will correctly record all of this bailout madness started by Bush and expanded and perpetuated by Obama as one of the biggest and most corrupt actions of the Federal Government yet.
Quite simply, if these companies had been allowed to fail, as bad as it would have hurt a lot of innocent people, the country would be over it and the jobless recession by now. The economy would be roaring back and unemployment numbers would be falling. Our big headlines would again be the argument about how to stop the millions of illegal's pouring across the border to take those jobs as half the pay.
Good point. Instead of letting them fail and hurting a mixed bag of innocents and guilty people, only innocent people are hurting while the guilty parties are getting rewarded.
The stupidity of the Obama administration people excusing the financial losses is staggering. The job of the US government is not to "INVEST." The job of the US government is to govern.
The last thing we need is the same kind of airheads who caused the financial crisis in the first place now put in control of the Fed and Treasury and giving hundreds of billions of taxpayer dollars to their cronies on Wall Street under the guise of "investments."
Plant, are pigs flying?? With the exception of blaming the situation on Obama...I agree with you!
Is TARP a failure due to gaping loopholes? Was the Obama administration incompetent lacking the foresight to anticipate misuse of TARP funds by the recipents? Most importantly, have the stimulus funds had the desired results?
Thus far, it looks like the Obama Administration has squandered borrowed money on banks that took advantage of the administration. Unresticted capitalism has given the mega-banks more leverage over the average American.
Adding insult to injury, the start of the credit reform bill is March, 2010, giving the banks added time to take advantage of Americans.
Capitalism is not at fault here, corrupt and poor decisions by the government is.
Those that created policies that led to this demise and those that made the decisions to bail out the special interests that put them in power (Unions, Car Companies, Banks), those are the people that should be held accountable. With business, accountability begins at success or failure. By allowing bad decisions to go unpunished, and using our good money to bail them out, we have just made it worse. By becoming stockholders as a country we have gone to bed with the same companies that should be out of business. By giving the Unions stock we have transfered wealth and backed up by your dollars. The entire thing stinks.
Unregulated capitalism is bringing America down just as Communism brought the USSR down. The Russians and the Chinese have found the middle ground before we did. It is taking us 20 years to learn our lesson. Even after near economic disaster brought on by capitalistic greed, we still have not learned our lesson. Without seeing a middle path, Americans are destined to repeat our mistakes and to find 99% of us are nothing more than slaves of the other 1%.
Call in the collection agencies.
The Obama administration? Are we rewriting history now?
A liquidity crisis in 2008 puts financial markets and institutions on the brink of total collapse.
Without Government provided liquidity asset fire sales would make the deflation of the 1930's and the collapse of current real estate market appear trivial.
G.W. Bush and Goldman Sacs, I mean Henry Paulson, devise a plan that throws needed liquidity at institutions with no accounting or accountability. A plan steeped in the market knows best after clearly demonstrating it only knows how to maximize bonus potential.
Elizabeth Warren, Tarp Administrator is appointed months after the disbursements are made. A needed program administered very poorly. Picking up that accounting trail and making the companies who received the money accountable had proven difficult after the initial threat of total collapse subsided.
You do not really know what would have happened without TARP.
My guess is we would have seen a miracle on Wall St. with companies tightening their belts and surviving.
TARP funds have gone to make banking executives richer and to bank lobbyist to enourage congress to give them more money with no regulations.
The TARP funds would have been better spent paying off portions of the principal on mortgage loans for homeowners and bringing down the interest and monthly payments to affordable levels.
the magical words here are..."My guess is"
Coming from a poster on the Daily Beast - thank you for your in-depth economic insight. We should have the government contact squareyellowpaper next time the US economy is on the brink of potential collapse so they can get your best guess. Why go with hundreds of opinions of economists who's job this is, when we can just consult - squareyellowpaper - to get your best guess. Thanks
What makes you think that their guesses are any better than yours and mine? Wake up! Geithner may have friends on Wall St. but that does not mean that he has a clue.
billybob, puleeease...it is the economists and bankers that don't seem to be able to do their jobs that got us into this mess together with the regulators who are supposed to be watching our backs. Maybe people competent in other businesses need to step in and take control. Obviously, the finance guys can't handle it as they have shown again and again through history. 'My guess is' is appreciated and a lot more humble!
Most of these financial institutions will fail during the next few years despite the TARP 'investment'. The only difference is that it will be a slow motion train wreck that costs taxpayers billions of tax dollars.
Never going to happen. They are considered "too big to fail."
They are holding our enconomy hostage.
"G.W. Bush and Goldman Sacs, I mean Henry Paulson, devise a plan that throws needed liquidity at institutions with no accounting or accountability."
Wait a minute. Aren't you talking about Obama's bailout here?
Every time the government touches something it is poorly managed and supporting a special interest. We know this, yet we elect people, and defend them, that do this right before our eyes. We blame one man, the President, whom is definitely a part of it, but we always excuse those who are the writers of the process, namely Congress.
They should all be fired. Remember that at election time.
It would be nice if "election time" meant anything. The people we elect, such as Obama, are on puppet strings manipulated from afar and have no connection with the citizenry of this country. Please note Obama's campaign promises/intentions and how, when elected, he followed in Bush footsteps.
You'd think if "many of those investments" were really yielding "a very strong return" we'd have the administration naming names and patting itself on the back all over the media - but so far, not so much.
DUH ! What did you expect from this loser? The tarp was just a slush fund for the democratic culture of corruption..
At this point, the conservatives answer would be to give these companies more tax breaks. Conservatives would say it is not fair to expect these companies to pay back the TARP money.
The conservatives have told us for years that corporate welfare would bring jobs. Well, yes, CITI brought jobs to India.
Dumb comment ...yellowsheet
Tax breaks buy JOBS. Wouldn't you like more money in your check ?
More money in my paycheck is not going to buy jobs.
Besides, I would just put it into savings. How will that buy jobs?
How wrong your are squareyellow. All companies that borrow taxpayer money, SHOULD PAY BACK the money. It is US, not companies, that need more of our own money. One of the MANY problems with Washington is that the companies that DID pay back the borrowed money, was not given back to us, it just got given out to other cronies. It's lost money I'm betting.
I love the line that the banks are now too big to let fail.
Instead of paying for college for your kids, I am certain that most Americans would rather give the money to the mega-banks.
What would you do if you as a taxpayer took out bankruptcy owing money to the I.R.S., you would continue to pay, you can't bankrupt an I.R.S. debt.... hold these CEO's accountable.
It's not the same thing - this isn't debt. The government didn't make a loan to these companies - it gave them money in exchange for preferred stock, which in good times would pay a higher dividend than common stock. But in bad times, like bankruptcy, stockholders are way down on the list of who gets paid - they usually lose everything.
Of course it's debt!!! If we give CIT several Billion dollars..then amazingly take an inferior position to Bondholders..we end up with ZERO for our money when they go bankrupt! We now have to come up with Billions to refill the coffers...the accountable party?? The idiot Geithner who took a STOCK..rather than a BOND position and set the taxpayer up to lose all!
Georiealist - Well, it's certainly our debt now. Look, I'm not saying this was a good idea - it was an extraordinarily bad idea. It was never clear to me why they had to go this route, except maybe it was easier to sell to Congress the idea of TARP as a "participation in future earnings" rather than just lending money outright. But a presumption of future earnings would mean these companies were essentially healthy with only a temporary liquidity problem, which clearly they're not.
A nice little piece of fiction...Bush and Obama both supported Paulsons money grab..under the illusion they were saving us all from the depths of hell! It didn't save us from anything..but it gave Goldman Sachs et al an incredible windfall...from which both Paulson and Geithner have hugely benefitted.
The solution? Let them fail...that's the way "moral hazard" in a market system works. How bad would it have been? Probably worse than what actually happened...DJIA to around 6000 and property values down across the country 30-40%...BUT..the US would now have flushed this garbage out of its system and the taxpayer wouldn't be holding the bag.
The result of SAVING America from hell and damnation? Another speculative frenzy into the market...taxpayers waiting to get hit with HUGE coming tax increases..and phoney programs like cash for clunkers! Former Goldman big shot Paulson snookered Bush and Obama with scare tactics..and screwed the average person for decades.
We know from experience that we cannot believe a politican. All companies should either make it or fail on their own--AS WE PEOPLE HAVE TO. I say NO MORE MONEY to any company. If they want to give all of the shareholders money to CEO's for bonuses, then it should be up to the shareholders to control their company. Of course this is only if they have to take total responsibility for their own company. NO MORE BAILOUTS OF ANY KIND. Seems like there are no penalties nor responsibility for anything anymore--that is a major problem.
I was always leary of propping up failing companies. Sometimes, filing for bankruptcy and restructuring is the best way to go. I never liked the phrase, "Too big to fail." Maybe some are too big to succeed. Giving GM to the UAW also makes me scratch my head wonder. I know the Democrats are pro union but this is a bit over the top. Plus the bonuses that were approved for execs of bailed out companies by Chris Dodd and the administration does not sit well with me.
"the taxpayers certainly have gotten a very strong return on many of those investments, but it's inevitable that when you invest in hundreds of institutions, some of them are going to go bad."
Its not an "investment"
Its corporate welfare
An investment decision involves an analysis of selecting where to get the best return and more importantly where not to
This program was simply opening the door to the printing press to all comers with the fiction of getting equity
Any chimp would have been able to tell you that some of the companies who got TARP funds would fail anyways. But don't let that minor detail get in the way of Outrage Redux!
This is an old song but still relevant - we need to live on what we make and not live on credit. Cash is king! I don't have a lot of money but all my true needs are met and the wants are the things that get you in trouble. I pay my credit card in full every month because I control my spending so the rate they charge doesn't matter to me. I realize that may not be possible for everyone, but it sure is a goal to strive towards.
The government is the government and it will always do something that irritates some segment of the population so there's not much in it for the individual other than at voting time and even then it's a crap shoot.
It seems there is this incredible reliance on government in the lives of so many when the truth as it appears to me is that the reliance should be on oneself. The only thing that you can have any control over is yourself. All the finger pointing does very little to help the individual and in this world, you get derided for it. It really doesn't matter who is right or wrong; it only matters how you're doing in your life. A little Ayn Rand philosophy goes a long way.
These "successful"--ha--stories will be what we will be hearing about the health care bill, if it passes. Haven't we all had enough of our government promises? If now, then will will never learn.
Washington is talking about ANOTHER stimulus package, and yet they have not even spent but about 14% of the first stimulus money. We all must do all we can to see that no more stimulus(pork) money is given to those crooks to waste. The Democrats want to have a pot of money to spend next year to buy votes.
They will buy a lot of votes, and with Democrats it is always with someone else's money.
"What a Country!"..... Yisak Smirnoff
It can be said without qualification that the USA economy has been grossly mismanaged by the megalomaniacs for their own gain. There were many people responsible throughout the government inclusive of the Federal Reserve banking system, Treasury Department, congress, on down to the smaller banks. Certainly there needs and needed to be more regulation. Neither capitalism or socialism can survive without regulation. Capitalism is a very small part of the USA economy but cannot properly function without regulation. Socialism which is the lion's share/engine of the USA economy and has been since 1789 has been so poorly managed that it's not worth talking about.
"Too Big to Fail" needs to turned around.
The Bankopolies need to be busted up. Once a bank becomes so big that it's abusing derivates, taking cash from the Fed, etc., then it has no choice but to be downsized with an antitrust law.
And if customers would quit flocking to these giant idiots, they wouldn't be too big to fail.
*gasp* :O
Imagine everyone's surprise!
The "BAILOUT" should be retitled .
The same creeps that tanked us with their
greed and lack of scruples ... ?
They were handed THIS money too!
WHAT -exactly- did 'they' think! would happen?
I am so beyond disgusted...
And...
I'm for skipping over "due process".
Treasury Secretary Philip Swagel said, ""the taxpayers certainly have gotten a very strong return on many of those investments."
And if you believe that, I've got a fancy bridge between Brooklyn and Manhattan that me and my pal Bernie Madoff will sell you at a real good price. Anyone who believes that a government can invest has never looked at the definition of investing. It is done to earn a profit. No government in the history of governments has ever earned a profit. The state always operates by taking taxes from its citizen-subjects and then spending those revenues. Governments can tax, and spend, and borrow and print money, but by no means can it earn a profit. The next time you hear someone speaking about government "investing" in anything, whether it be "jobs" or " the environment" or "space" or "health care," say to yourself, if not directly to the person, "Liar!"
In a much earlier post, SQUAREYELLOWPAPER said,
"Unregulated capitalism is bringing America down just as Communism brought the USSR down."
Define capitalism. I'm willing to bet that what you are referring to is best called "corporatism," and it has virtually nothing to do with capitalism. True capitalism is entirely self-regulating through unfettered competition. All government need do is but out, It is government regulation, subsidization, licensing, lending, leasing, etc., etc., etc., and all other forms of intervention in the free market that deprives the free market of its freedom, which is what makes it work so well. Given the degree of government intervention in the economy, what little remains free in the American market is a mere shadow of true laissez-faire capitalism. Visit the Ludwig von Mises Institute's websitel at www.mises.org to discover what real capitalism would look like.
gee Little-Miss-Sunshine whispered to Alice-in-Wonderland that if you give away free money they will pay it back just because you are pretty
and he believed it
Lest some of us forget, the bailout of the banks, insurance company(AIG), Wall Street firms, and the carmakers all started under the past administration. It is true that the present administration continued the bailouts, especially of the auto industry( GM & chrysler).
If wall street was allowed to fail the entire economy of the world would callapse. Note that Wall Street has recovered and is now doing quite well.
GM may pay back its loan sooner than it has to. The fate of Chrysler is yet to be determined. But it was wise to bail out this industry. There are far too many jobs that would have been lost, and the over all effects on this country's economy would be worse than it is today.
I did not see one comment about bailing out of the insurance giant (AIG). Some people have a love affair with insurance companies, but if AIG had failed no one would have noticed. You see they do not produce one widget that helps any one or the economy as a whole.. They suck money out of the system, in one direction only, never to be returned except maybe to politicians.
The bail out of the banks is similar to the insurance companies, although they provide a service which most of us use on a dailly basis, but for the most part, if a few banks fail, they will and should not be missed. Some banks have already repaid the loans with interest.
At the end of the day, the tax payers will break-even, and the bail out will be judged to have been a wise decision.:
1. People whose jobs were saved are still paying taxes.
2. The companies that will pay back the loan will pay back with interest. This will make up for those who default.
3. By bailing out companies we did not have a run on the banks.
4. The bail-out avoided panic in the general populace.
5.Our capatilist system was saved from total callapse, and the world's economies would have gone down with ours.
6. Most major countries injected billions of dollars in their banking systems to prevent collapse.
7. Most economies created a stimulus package to help stimulate thier economies.
I think that we are a little hard on ourselves, take a look at what is happening in Europe. Un-employment is high (15-18 %)
The Government should publish a list of those who got money and how much, and who has paid back and how much. That way we the tax payer can determine if our money was spent wisely. This list would stop the guessing game and finger pointing.
Thank you.
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