The news that TARP earned a 8.25% rate of return is good, and a lot of the emotion over TARP is irrational, but I don’t think it’s entirely wrong to still be upset about TARP. If a private investor were taking on the kind of risk, they’d want a rate of return far in excess of the average corporate bond return (which is now about 6%), because at the time the TARP investment was made, it was far riskier than the average corporate bond.
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[…] Mistermix at BJ, who today was trumpeting the entirely fictional 8.25% rate of return on the bank bailouts while asking if, considering the […]
WereBear
Personally, I was pissed about TARP because it meant assholes were in charge of waaaaaay too much and would suffer no ill consequences.
But the way the Obama administration handled it, it got paid back, at least. If it were a McCain finance move… not so much at all.
BR
I’m okay with TARP in a narrow way of looking at it (i.e. we got our money back). (And a big frustration of mine is that most “journalists” don’t seem to remember that TARP was from the Bush administration.)
I’m not okay with it in the big picture because it was a move to paper over the problems the big banks had and still have – “assets” that are worth nothing that they keep on their books and will some day have to mark to market and take huge losses on. TARP was all about kicking the can down the road. Instead we needed to and still need to force the banks to open their books and be inspected line by line until we unravel the mess and they take their lumps.
The bigger problem is that The Fed has been pumping tons of money into the banks post-TARP and hoping nobody notices. Indeed, I think most folks aren’t aware of the Fed’s Open Market Operations and the tens of billions they are electronically conjuring up every month.
pablo
Bush’s or Obama’s Tarp…..can’t have both!
Dennis SGMM
TARP pissed me off because there were no quid pro quos and because, in the end, the same TBTF institutions that necessitated TARP were enabled to become even bigger. It reminded me of a saying that we had in the Navy, “If you just fuck up you might get a Captain’s Mast or even a Court Martial. If you fuck up huge then they give you a medal.”
JPL
Personally, I would have liked to see some of the asses who claim that Obama killed the economy suffer. Although they could have taxed the bonuses of the bankers, TARP did stop the bleeding.
Moses2317
I was upset about TARP, but was willing to accept it as a necessary evil given that the economy was collapsing. The critical thing to me was whether TARP was followed up with effective oversight of the funds and re-regulation of Wall Street to make sure we didn’t get into the type of mess that triggered TARP to begin with. While far from perfect, we got that oversight from the Obama Administration, and Democrats in Congress passed reasonably good Wall Street reform legislation. Republicans, of course, tried to filibuster that legislation.
http://www.winningprogressive.org/the-democratic-record-reforming-wall-street
Don
Regardless of rate of return, anyone who is angry at TARP because they perceive it as some bankster giveaway is misguided. It may be that some people who didn’t deserve it were enriched, but the point is and was to keep market liquidity on life support.
Lefties are guilty of TARP-bashing in a way we’d never forgive if the accidental beneficiaries were the poor. We quite reasonably say that the occasional welfare cheat is a macGuffin, a forgivable flaw when compared to insuring a society where the legitimately needy are helped and a safety net maintained.
But the money injected into the banking system, without which day-to-day functioning is impossible, let alone recovery? Pfft, screw that – Wall Street didn’t suffer enough! Bonuses! Burn the witch!
TARP was money well spent, regardless of return.
Spiffy McBang
Like those above, I understood TARP was necessary for the economy but wanted serious-ass regulation to be part of the deal. I don’t think the rate of return is an issue- the fact the money was recouped is good enough for a situation like this.
brantl
Goddamnit, once we were in the fix, you really had to spend the money. Now, everybody’s got a bitch coming that they shouldn’t have been able to get there, that regulation both before and after the fact should have been/ should be better (and they’re dead right, goddamnit!), and we should have gotten more for our money, but it was necessary to do something like what was done in order to get the economy to stop acting like a cyanide victim.
(And that’s a very apt metaphor, as cyanide blocks enzyme pathways, and stops your metabolism cold, which is exactly what was happening without lending.)
Liberals need to stop shooting themselves in the feet like this. It’s time to bitch about not getting better regulation (because of the Republicans), and start using the type of framing that we need to elect more and better Democrats to get more and better regulation of these markets, to prevent the runaway deregulation that the Republicans typically do, when sufficiently in power.
Allan
Yes, because the purpose of TARP was to produce above-average rate of return on investment.
Yeesh.
BR
@Don:
That’s not my problem with it – it’s that in keeping market liquidity on life support and thinking about it in a crisis mindset it allowed us to ignore the fundamental problems on their balance sheets. The banks are still holding all sorts of valueless “assets” and are allowed to keep pretending everything is okay. Also, TARP and subsequent Open Market Operations have not been all that good at injecting liquidity, simply because the banks themselves aren’t lending at anywhere near the rate we want them to.
Resident Firebagger
Wasn’t part of TARP funneling all that money to Goldman from AIG?
mai naem
Actually from what I understand we will still lose the AIG money and that was a huge chunk of money. I think seeing some of these people do a perp walk would have gone a long way to making Obama’s financial policies look better. Fuld may have lost money but they aren’t even in Club Fed.
mistermix
I realize that the TARP investment was a necessity to save the banking system, no matter what return we got. But the narrative I see developing is that we even made a better return than T-bills, so what’s all the fuss? That narrative ignores the risk we took on by funding TARP, and I agree with those who are saying that we still need more and better regulation, no matter if we beat the T-bill (or even corporate) returns on this investment.
Blue Neponset
I was pissed about TARP because no CEO’s were hanged in front of the Capitol building. Until they fix that I don’t care what the rate of return was.
mclaren
Werebear, Dennis SGMM and JPL are all correct: the essential problem with TARP is that it provided a gigantic hammer to hold over Wall Street’s head and demand fundamental reforms. Instead, it became a “get out of jail free” card from the organized criminal conspiracies that wrecked the economy.
First, as a condition of TARP, a lot of the criminals on Wall Street should’ve been forced to go to jail. “You want your firm to survive? No problem — you CEO goes to prison for life without parole.”
Second, as a condition of TARP basic reforms should’ve been instituted. No more CDOs, no more quants confecting derivative financial instruments no one can understand, bonuses limited to tiny amounts, capital gains tax rate abolished and all bonuses and other capital gains taxed at the same rate as normal income.
Third: everyone who had a hand in wrecking the world economy never gets to work in finance again. Ever. Lifetime ban.
As a minimum, those should’ve been the starting conditions. And if all the firms refused to agree? No problemo, the government seizes every firm and marches U.S. army corporals into the board rooms and starts making loans. The banksters won’t do it, arrest ’em all and nationalize every last goddamn bank and investment house and get marine fucking corporals to run the places until new managers can be found.
“Oh, but Wall Street finance is too complex for ordinary people to understand!” Exactamundo, buckaroo. That’s the problem. Jettison all the CDOs, get rid of the convoluted bullshit dealmaking, reduce banks to what they were intended to be — places to loan businesses money and places to loan homeowners mortgage money. High-security loans with tons of collateral. It’s not rocket science. Ordinary people can do that. It’s the bullshit fail-parade casino capitalism finance that ordinary people can’t understand, so throw it out.
EconWatcher
Get bailed out, then get big bonuses. That’s the problem. There was no accountability. People have every right to be mad about that, even if the bailout saved all of of our bacon (as it did).
Belafon (formerly anonevent)
Yeah, but I thought the government was bad with money. There’s no way they could make money.
El Cid
My question is, is the rent too damn high?
Don K
@Blue Neponset:
Well, I wouldn’t go quite that far, but I’d feel a hell of a lot better about it if the shareholders, managers, and creditors (oh, and the traders and the math geniuses responsible for this clusterfuck) had been made to take haircuts as a condition of the bailout. Look at GM for an example. Shareholders wiped out, top managers out on their asses, and creditors taking major hits to the value of their loans.
I agree something had to be done, but this was structured in such a way as to have no consequences (with deterrent value) for the people actually responsible.
Calvin Jones and the 13th Apostle
@EconWatcher: But it really didn’t. It’s all “extend and pretend.” Kicking the can down the road. And people are forgetting something else. We’re on the hook for Fannie and Freddie. AIG will never fully get paid back. The Fed is printing money in hopes they can help the banks get well(Hello Japan!!).
El Cid
Most of the people I’ve talked to about this subject have the feeling — and I can’t really strongly disagree with them, given it’s more of an empirical question — that maybe it’s not quite true, that maybe there’s something about the TARP payback and interest that comes from somebody not telling us something, things still covered up, or tricky accounting, etc. For a lot of people I just don’t think there’s a lot of willingness to trust these stories.
Juicebaggers, ho!
Liberals are free to complain about TARP all they want. I have it on good authority that they are responsible for all our problems, so no one listems to them anyway.
Eric U.
@BR: somehow, I think blaming Obama for Bush’s bailout is a feature and not a bug. For years, the Washington Post web site listed the Ruby Ridge clusterfuck as happening under Clinton, whereas in reality it was very much over by the time that Clinton took office.
Zach
People are pissed off about TARP because they think that we gave away hundreds of billions and never got any of it back. This is what they hear every time they hear a politician speak, because no (vulnerable) politician is willing to defend it.
You might still be peeved about TARP because it didn’t return enough on what we paid in, but that’s not the sentiment of the average American.
Also, you’re computing your 8.25% return relative to 0%. You ought to figure in the value of avoiding the global economic meltdown that may have happened absent TARP.
L. Trotsky's Nat'l Security State
Why did Clinton decide to intervene in Somalia, anyway?
Alex S.
TARP itself wasn’t bad, well, it was a huge success considering that it did what it was made to do. But I am disappointed because not enough changes were made to avert another disaster, in my opinion. The bailout let a whole class of people off the hook who got drunk of their superiority and they still haven’t learned, it seems. Bonuses, the mortgage mess, record overdraft fees, not to mention the political influence.
ornery curmudgeon
It’s funny how many say the TARP investment was a necessity to save the economy, or save the banking system. Crawk!
It means you are one of the Very Serious People!
We’re about to have TARP2, ie, Quantitative Easing, and I look forward to the many serious commenters who will hem and haw but reluctantly realize how necessary it is to save the
Republiceconomybanking systemum, whatever sounds good enough to load more fake debt on the taxpayers; next stop, austerity!It’s unfortunate, but anyone serious must realize we must cut government services to save the … wait, I’m a few weeks too soon. Consider this last one a promo trailer for your next thoughts, Very Serious People!
L. Trotsky's Nat'l Security State
The world hasn’t ended, therefore everything we did was correct and proper!
Bill H
Last night on Hardball, Chriss Matthews angrily declaimed, “Bush bailed out the banks.”
He did not mention that it was a Democratic Congress that passed the bill, nor did he mention that Obama took time during his presidential campaign to lobby for passage of that bill and to vote in favor of it.
At least he didn’t “suspend” his campaign and bail out on David Letterman to go to Washington in its behalf.
Lee
EDIT: Zach beat me to it.
I’m not sure that is really 8.2%.
Wouldn’t it really be 8.2% if we got back 8.2% more than the $309b we invested ($334b). I assume they are making this statement with the understanding that we might not have seen any money back from TARP.
Don’t get me wrong it is great that we have actually make $25b so far, but that is not really a rate of return of 8.2%.
TooManyJens
@ornery curmudgeon: By all means, share with us your ideas on how the banking system should have been stabilized. Or maybe we should have just “Let ’em fail!”. That surely wouldn’t have had any negative consequences for anyone but the banksters.
Bullsmith
I’m eternally grateful to my betters in the financial industry for letting the government look like it made a decent profit on some of the money it gave, and in return the banks have to this day no meaningful oversight nor reason to comply with the most basic rule of law.
Do I believe for a second the government made money off the banks not the other way round? Hahahahahahaha.
Zach
@Bill H: “At least he didn’t “suspend” his campaign and bail out on David Letterman to go to Washington in its behalf.”
To be fair, McCain had to be incredibly tempted to demagogue the whole thing, embrace the nascent economic populism in the country, and turn his entire party against Bush and Dems in Congress. It would’ve been a political winner as it devastated the country. Luckily, his campaign listened to the “serious” voices who thought this would’ve been a bad idea. Remember that the bailout nearly failed when it didn’t pass the House (causing the DJIA to drop 7 or 8 hundred points), and enough donors got on the phone to yell at enough Congressmen to get it through. McCain could’ve easily gotten in the way and increased his chances of winning. The narrative would be that Obama already had a legislative failure because he couldn’t convince a Democratic congress to act.
Svensker
@BR:
Ditto a hundred times ditto.
Svensker
@El Cid:
Also this.
Dan
At least for me, the anger over TARP has nothing to do with money. It has to do with leverage. the big banks were on the brink of failing, the market for lending between large institutions were about to freeze. They were basically screwed.
Instead of using the opportunity to get some really good financial reform, the bail out was no strings attached.
Basically, it’s not about the cash. It’s about the leverage.
psycholinguist
Here’s your money shot from the article:
“The huge wealth transfer from fixed-income pensioners to the banks has helped the banks repay TARP,” Petzel said.
Keeping those interest rates low means Grandma and Grandpa aren’t making any money on those retirement accounts, but the banks are borrowing money from treasury for NOTHING, then loaning it back to us for a tidy profit. What the fuck.
Bullsmith
There is overwhelming evidence that the Banks committed widespread and deliberate fraud in creating mortgage securities. They failed to properly register land titles and pay the required fees. They failed to properly secure the titles to the trusts that back the MBS securites, thus again defrauding the government by taking advntage of tax-exempt status they were not actually complying with. They’ve submitted thousands upon thousands of forgeries to courts, sometimes taking people’s houses who have never missed a payment and who’s title they don’t actually have any claim on.
But yeah, sure, I trust that they paid the government a handsome profit. Just like I trust the government when they say that FROM NOW ON, they will make absolutely super sure that the ongoing crime is kept from the public view.
Where are the fucking perp walks? Why are enormous bonuses being paid out based on obviously fraudulent accounting by the banks? I’m supposed to be happy because the government maybe made a bit of profit by partaking in an ongoing criminal racket that is deliberately trying to sucker citizens into losing their life savings and their houses both?
This is a serious fucking problem and no one is dealing with it. Maybe the States will, but again, until I see some actual perp walks, the evidence is overwhelming that the criminals are above the law, and TARP is part of that swamp.
Jim Pharo
@BR: We’ve effectively used TARP to kick the can of “big shitpile” down the road. When that delayed-fuse stink bomb goes, Citi will expect to be bailed out once more. And we will, because the alternatives are worse.
The only way out would be to institute a regulatory scheme that would force banks to clean up their balance sheets significantly overtime, even as it depresses their earnings. Our society benefits from a stable and functioning Citibank, not a Citibank that earns high rates of returns for its shareholders.
Bullsmith
@psycholinguist:
Exactly, and what’s coming next? They want to push long-term treasury rates down below 2 percent so that there is no possible way Granny can live off safe investments. She will have to eat her principle or hand it to Wall Street, who will of course give her paper that says it’s worth a lot until it turns out to be basically worthless.
The government is helping Wall Street strip out the accumulated savings of the nation and replace them with bogus paper. As a bonus, once Granny loses her life savings, they’ll come and take her 99% paid-off house. All banks are sociopaths at the moment.
rumpole
It’s not just tarp, though, remember. There’s a whole mess of other liabilities that were moved onto the Fed’s balance sheet. And now we find out that Obama’s only concerned with “future compliance.”
What the fuck is wrong with these people?
He added, however, that the administration is focused on ensuring future compliance, rather than on looking back to make sure homeowners and investors weren’t harmed during the reckless boom years.
(alternate title–“Scheme-ass ways, the ransom note”
DougJ is the business and economics editor for Balloon Juice.
Yes, but I don’t think it’s fair for people to say “$700 billion down the drain” or “we are still on the hook for $26 trillion” anymore.
TooManyJens
@rumpole: I will never be able to understand Obama’s fascination with never “looking back.” As if you can divorce the past from the present and the future.
Jesus Christ, if he wants a regime where the powerful can do anything as long as they can just keep people from finding out about it for a few years, just admit it already.
liberal
@Calvin Jones and the 13th Apostle:
That’s the thing: people act as if TARP was the entire bailout. It’s not, not by a long shot.
liberal
@DougJ is the business and economics editor for Balloon Juice.:
Straw man. TARP is only part of the bailout. Look at Fannie/Freddie, FHA, crap on the Feds balance sheet, low rates that banks are making free money off of by investing in T-notes, and so on.
And the references to liabilities in the tens of trillions were just to the notional size of the derivatives markets and were never serious estimates of the net cost. Even though those can’t be taken at face value, the idea that the total subsidy in the wake of the bailout of the FIRE sector isn’t in the hundreds of billions, or low trillions, of dollars is laughable.
L. Trotsky's Nat'l Security State
DougJ: Exactly. “Some people” should really STFU. Then President Not Me and AG Ida Know can return to looking forwards, not back.
liberal
@Moses2317:
Would that it were so.
brendancalling
people have every right to be angry about the no-strings-attached nature of TARP. because there were no conditions, banks have continued with business as usual, paving the way for more taxpayer bailouts.
L. Trotsky's Nat'l Security State
liberal: Fucking Fireagger. Why do you insist on making it so that we can’t have nice progressive things. Such a selfish asshole.
liberal
@Zach:
Yawn. There were other ways of preventing a meltdown.
Remember how the run on money market funds was prevented?
liberal
@brendancalling:
Exactly. Moral hazzard is still there, in abundance.
liberal
@TooManyJens:
What’s to understand? Obama is at best a centrist president beholden to powerful economic interests, and this is merely his way of saying “laws are for the little people, not the banksters or war criminal like George Bush.”
Cue O-bots…
chopper
@mistermix:
which is exactly why it has such a high rate of return. you don’t get high rates out of zero-risk ventures.
all in all i was pissed that TARP had to happen, and i was pissed that the bush administration was going to run it at first because those guys could screw up a bread sandwich. luckily it all worked out but i still wasn’t happy with it.
Don
Yes, but I don’t think it’s fair for people to say “$700 billion down the drain” or “we are still on the hook for $26 trillion” anymore.
Because it was NEVER fair because it was necessary even if it cost that much.
Everyone up-thread talking about the conditions and reforms that should have gone hand in and are dead right. And if any of the squawk about TARP ever was 1/10th that nuanced I’d take no issue with it. But it’s not. It’s “bank bailout! bonuses! AAAH!” all the time.
Someone above said that now that this has turned out not to be a money-loser it’ll be used as a justification for why it was all okay. Maybe so, but you know why? BECAUSE the hollering was all about the cost and bankster salaries. If there had ever been a hint of nuance in the complaints and an acknowledgment of its necessity it couldn’t be shrugged off so easily.
Instead we have glib clowns like ornery curmudgeon shrugging off a complete economic vapor lock like we all could have just taken a long weekend and no biggie. Instead we have the Tea Party idiots controlling the narrative because it was all about a dollar figure, letting them make this about spending.
Because we were pissed about a few thousand bankster jackasses not having to pawn their Mercedes we overlooked the millions of pension funds that didn’t evaporate and handed the Palin crowd a talking point. “Sure, this time their spending didn’t kill us. How many more bullets will we manage to dodge?” How is it that they’re that fucking stupid but we keep letting them out-maneuver us on the long game?
Remember how the run on money market funds was prevented?
By promising to guarantee them against loss if they broke the buck? How do you believe that was any different? It had the same root cause!
Sentient Puddle
@DougJ is the business and economics editor for Balloon Juice.: It isn’t, but it seems like 95% of people talking about the crisis either don’t know what they’re talking about or are too confused by the mess and more or less don’t realize it. So we continue to hear things like this about TARP.
Cat
@Bullsmith:
Grannys across America are not living of her savings bonds, Money Market, CD, or what ever ‘safe’ investments.
Maybe your granny is, but the vast majorities of granny’s are living of social security. A few of them having enough saved up they don’t have to eat catfood and can pay for all their medication, but they are the minority not the majority.
Retirement and Treasury rates are separate issues.
Cat
I’m upset by TARP because it should have been a nationalization of the banks with an temporary increase to the maximum amount insured.
Saying it was TARP or collapse of the financial system is a straw man.
Not doing tarp may have lead to some huge loss of wealth for a certain class of people, but hey, most of that wealth was earned from the practices that caused the meltdown.
Montysano
If you loved TARP, will you love TARP, The Sequel? If the foreclosure mess causes Wall Street to haz a Big Sad, Obama could be faced with just such a situation. According to Denninger, the rot is deep.
JRManning
“I don’t think it’s entirely wrong to still be upset about TARP… …it was far riskier than the average corporate bond.”
HUH??? – The *risk* was another Great Depression if it -hadn’t- been done.
Sentient Puddle
@Montysano: Before we get to the point of discussing TARP II, we’ll first find out whether or not resolution authority works as currently designed.
Martin
Risk of funding TARP?
On Sept 15, Lehman went bankrupt.
On Sept 16, AIG collapsed in large part due to Lehman, and the Fed came in and bailed them out. Once Lehman and AIG were gone or crippled, every other bank was suspect. Lehman owed a lot of people a lot of money, and nobody knew how the other banks and funds were going to get their assets back.
On Sept 17, Bernacke and Paulson went before Congress to ask that the banking sector get bailed out. They told Congress that the Fed lacked the funds and Paulson the authority to do it themselves. Basically they advertised to the nation that the Federal Reserve and the Treasury were powerless to stop what was coming.
On Sept 18, $550B was withdrawn from money market funds in an hour. It was only stopped because the Treasury instantly created a guarantee program for those accounts. Essentially they created an unfunded FDIC without consulting Congress, and did it in an hour. TARP was formally proposed a few hours later and the idea released to the markets. The run on money markets wasn’t going to stop without intervention, and the money markets weren’t the only problem area.
The guarantees by the Treasury and the idea of TARP helped. I know that the financial geniuses like to talk about how much risk they put out there to justify their salary, but for the most part investors are scared little children, and those assurances have a large magnifying effect. $700B to bail out bad assets can save trillions from being yanked out of the market because investors always worry that the pain will fall disproportionately on them, or that they’ll get caught up in secondary effects. And the truth is, they do. My main holding dropped 65% even though they kept turning out record revenues and profits. In that kind of environment the only way to not lose is to not play, and that’s what investors were doing – they were running for the exits, which was only making things worse and worse.
Was it a shitty thing to have to do – absolutely. I think that Geithner deserves a lot of credit for minimizing the impact on taxpayers and for finding other ways to clean things up that didn’t cost taxpayers. He was pretty creative and level headed. Congress should have ensured that part of finreg was a provision that would have taxed the financial sector until the taxpayers were fully paid back, with interest. They didn’t do that, and that was a mistake. But people don’t get how completely and utterly close we were to a complete collapse, and how completely unprepared everyone was to deal with it. TARP was a hail-mary.
Martin
@Cat: True, but nationalization carried its own risks. Not least being that there would no longer be an independent credit market in the US – and that would carry consequences for the entire rest of the market.
Further, once you nationalize, you assume the bad debt. We’re going to lose more money off of either GM or AIG than we are off of TARP, because we ate all of GM and AIGs debt, but the banks still hold theirs. Both entities have promised to pay the taxpayer back, but TARP is paying us back MUCH faster.
I’m not saying it was a much worse idea than TARP, but it’s not an obviously better one.
russell
Congressional Oversight Panel assessment of TARP:
So, TARP made the bankers pretty much whole, and Treasury got a not-bad return on the capital it put at risk.
The rest of the world got fuck-all.
I say FAIL.
Martin
@Cat: That’s not true. Most people have either pensions or other retirement accounts in addition to social security. In case you hadn’t noticed, poverty rates for those over 65 are lower than for the nation at large, and Social Security alone isn’t enough to get you over the poverty line. They only way that could happen is if most people have other retirement income to draw off of.
L. Trotsky's Nat'l Security State
Personally, I love the name. ‘Troubled Assets’, because the asset’s grades have slipped, it’s staying out past curfew, running with the wrong crowd, it comes home reeking of booze and pot, and I think it may be having the S-E-X!
I only want what’s best for the asset, but I just don’t know what else to do.
300baud
If you are calculating net rate of return, you should include the extra tax income and reduced spending the feds received due to the better economic picture TARP created.
But like others, I don’t think the net rate of return matters. TARP wasn’t intended as a sovereign investment fund. The goal was to avert collapse of key portions of the economy, and the immense suffering that would have followed. That worked. Whether we made 10% or lost 10% is immaterial. We shouldn’t encourage the judging of government by a program’s P&L statement: much of the point of government is to do things that don’t make sense as a business.
Also like others, I’m deeply disappointed we didn’t use this crisis to fix the problem. As far as I can tell, we learned almost nothing. So basically, TARP was fine, it’s the followup that sucks.
brantl
Yes, because the limitations and rules for taking TARP money weren’t adequately defined. It isn’t that a TARP shouldn’t have been done, it should have been done quite differently.
Bullsmith
@Cat:
Deliberately forcing interest rates on Treasuries so low that even the most conservative investors, (which I called Grannie because, yes my Mother (Grannie to my kids) is the kind of deeply conservative investor who wants real, honest to God guaranteed investments but let’s use the traditional Widows and Orphans) can’t afford to invest their money safely but in order to get any kind of inlation-resistant return have to buy stocks is a deliberate, targeted gift to Wall Street and an assault on those who actually did pay of their mortgage, accumulate some wealth and want to protect it. What does she get? Targeted by the government which wants to force her to hand her savings over to proven crooks.
That said, you’re absolutely right Social Security is vastly more essential and widespread component in retirement income than are T-Bills. So of course it’s being targeted too, even as I type this, isn’t it?
I hope I’m totally wrong, really. But 140 Billion dollars in bonuses in this economy makes me think I’m not.
Don
You don’t have the slightest idea what you’re talking about.
L. Trotsky's Nat'l Security State
Don: Yes, to the rest of the world accrued the benefits of not being (completely) beggered by the disaster created by the fuckstains who made out like bandits, both before and after they screwed the pooch to the wall.
Oh, plus, we got the entertainment of watching filthy rich assholes cry and whinge because the didn’t quite as much money as usual for being totally incompetent. However, the value added fir the last was mostly ‘off the balance sheet’.
TooManyJens
@liberal:
But if that were all there is to him, there are easier ways, y’know? Like being a Republican.
Cat
@Martin:
55% of the elderly have other assets and 24% have pensions.
Of those 55% the average elderly person only earns around 12% of their income from those assets.
49% of the average grannys income is from SS and 30% from still working after 65.
Grannys are living of SS.
http://www.ebri.org/publications/notes/index.cfm?fa=notesDisp&content_id=4571
F
This is misleading. At the time the TARP investment was made, creditors were yanking commercial paper left and right. There was a strong chance that the following week there would have been no short term credit at all, after which corporate bonds would have gone strongly negative. Doing nothing was also far riskier than the average corporate bond.
The appropriate comparison is not between TARP and the then-average corporate bond, but between TARP and the cash shelf in the gun safe in the lower level of the bunker that you hope will keep the packs of mutant cannibals at bay long enough for you to ever see the sun again.
Cat
@Bullsmith:
…
‘Safe’ investment is always at risk to inflation. There is no such thing as a safe investment. Who ever told you that is lying to you. However, If you think there should be a ‘safe’ investment that is immune to inflation and still have a positive return your basic understanding of economics is flawed.
The ‘safe’ investments are collateral damage in the war on deflation and a recession. They are not being targeted.
SS and Medicate however are going to be targeted when they should not. They need to be increased to actually ease the elderly out of the workforce and to keep them out of poverty.
Batocchio
I wasn’t happy about TARP, but I looked at it like this.
We needed some sort of bailout, but Paulson’s plan wasn’t the best (and he was corrupt).
We needed some sort of financial system, but not the status quo that caused the meltdown. (Too big to fail, etc.)
We needed someone running the financial system, but not the bastards who caused the meltdown.
Paulson and the gang worked for their buddies and their class, even when it wasn’t good for the country as a whole. We still don’t have the culprits in jail or on trial, and they’re eager to pull the same crap all over again. In fact, after getting their asses rescued by the taxpayers, they’re more obnoxiously, recklessly, destructively Randian than ever.
russell
Quite possible, not really my field. I’m just trying to play the home game.
So, I’m reading the Congressional Oversight Panel’s post-mortem report on TARP.
It says: yes, it kept the banks from imploding. All of the other things TARP was *mandated by law* to address, were not addressed.
So, to me, that says the bankers got a big leg up, the rest of us didn’t really get much.
You’re seeing something else in the situation. Perhaps you would like to expand “you’re an idiot” into something a little more edifying.
The floor is yours.