Even Without TARP, Banks Are Still Heavily Subsidized

Despite the massive repayments of TARP money coming from our biggest banks, the financial system is still very much dependent on the rescue operations of the government.

Perhaps the best illustration of this is the massive balance sheet of the Federal Reserve, which has inflated by purchases of $1.058 Trillion of mortgage backed securities.

The Atlanta Fed's most recent financial highlights point out that in the last two months, the average weekly amount of MBS purchased has averaged $17 billion. That's a significant slowdown from a prior average of $23.4 billion per week. And last week the Fed purchased only $16 billion.

Still, cumulative numbers matter. Prior to this year, the Federal Reserve had never purchased mortgage backed securities. Now the Fed owns more than 15 percent of the market in agency backed mortgage securities, Fannie Mae and Freddie Mac combined own roughly 17 percent of the market, while commercial banks own around 20 percent.

We don't know exactly what the Fed has been buying or the prices it has been paying, of course. We have no idea who the sellers are, either. But it is fair to say that until this program ends--if it ends on schedule, that will be in early 2010--the financial sector is still heavily subsidized by the central bank.

But here's what we do know. Banks are still being propped up on both ends by the Fed. They have access to dirt cheap money and then they can sell the mortgage loans they make with that money right back to the Fed.

55 companies miss payment of TARP dividends: study

http://www.reuters.com/article/idUSTRE5BM3MR20091223

Yea about those tarp paybacks lol

and the real size of the bailout hold on to your hat

http://beforeitsnews.com/story/1887/$700_billion_is_a_LIE_$14_trillion_the_real_size_of_the_bailout

those banksters are still being subsidized and with zeros news dump they can load up their toxic assets right on us

Treasury uncaps credit line for Fannie, Freddie

http://www.reuters.com/article/idUSTRE5BN2ZI20091224

Of course if you look at the size of the donations to obama they made it is little wonder he said the bailout was his biggest accomplishment.

http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/

http://www.opensecrets.org/news/2009/07/jpmorgan-ceo-jamie-dimon-donat.html

http://www.economicpolicyjournal.com/2009/07/president-obamas-favorite-banker.html

http://www.salon.com/opinion/greenwald/2009/04/04/summers/

http://www.opensecrets.org/orgs/list.php?order=A

In his year-end interviews with friendly news outlets like The Washington Post and National Public Radio, President Obama had a curious choice for his biggest accomplishment of the year: the bailout of the financial sector.

http://www.washingtonexaminer.com/politics/Obama_s-pick-for-man-of-the-year_-George-W_-Bush-8677553-79997637.html

even the loons are catching on

http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout

heres what you get lots of fees

http://www.walletpop.com/blog/2010/01/06/coming-to-your-bank-in-2010-new-products-and-lots-of-fees/

763 banks took TARP loans

55 are late paying their quarterly installment on the 5% interest per annum

not exactly a tidal wave just yet...

..not that I de facto approve TARP loans

the real key with TARP will be what they do about the principal debt in 5 years when it is called

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