Treasury Reaps $245 million Auctioning TARP Stakes in Seven Banks

Contrary Indicator ^ | 6/14/2012 | Daniel Gross

[EBH]

The central component of the TARP program was the Capital Purchase Program, in which the government bought preferred shares in hundreds of banks in 2008 and 2009. In all, CPP recipients took $204.9 billion public funds. Banks have returned $190.26 of that capital. Add in dividends ($11.68 billion), gains on the sale of Citigroup common stock ($6.85 billion), and funds received from the sale of warrants ($7.67 billion) and the CPP has turned a "profit" thus far of about $11.6 billion. (Here's the most recent TARP summary)

But scores of banks have yet to repay their capital. And rather than wait for smallish banks to scrape up the cash to buy back the shares, Treasury has also decided to auction off shares of some banks to the public. The upside: Treasury can accelerate the pace of TARP exits. The downside: in an auction, Treasury commits to accept whatever the market will pay. Which means it often winds up getting less for its stake than it put in. For example, in March, Treasury auctioned stakes in six CPP recipients. It had paid $410.5 million for the stock, but received only $361.8 million in the auctions.

It looks like something similar happened again this week. Here are the results of this week's Treasury's auction of positions in seven CPP receipients, as per Treasury's announcement

[EBH]

That means the taxpayers took a haircut of $35.6 million, or about 13 percent. The upside: $245 million in cash goes into Treasury's coffers. The downside: these seven 'investments' were closed out at a loss

[Toddsterpatriot]

Yup, some small banks resulted in losses. The big ones were all profitable. As well as the bank TARP in its entirety.

[marstegreg]

I worry that the headlind is missing the words “to China”.

[green iguana]

Does the profitability excuse the unconstitutionality for you?

[Toddsterpatriot]

Profits are better than losses.
Some thought TARP was a giveaway, they were wrong.

[Armando Guerra]

$245 million?

Obama spent that in the time it took to read that headline.

[Lurker]

Try answering the question. Does the profitability excuse the fact that it’s in-Constitutional?

Yes or no are the choices.

[Toddsterpatriot]

Prove it’s unconstitutional and then I’ll answer.

[Lurker]

Wuss..

[Toddsterpatriot]

Lazy.

[Lurker]

Cite for me the specific Article and Section of the Constitution which allows the Federal Government to loan taxpayer money to banks, or any other industry for that matter.

Find that and you’ll prove this was Conatitutional. Fail, and you will fail, and I will have demonstrated the truth of my assertion.

Then you’ll puss out and continue to refuse to answer the question originally posed to you.

Because, well, because you’re a wussy.

[Toddsterpatriot]

You made the claim, not me, so that puts the burden on you.
Because I don’t want you to cry yourself to sleep, I’ll say profitability would not excuse unconstitutionality.
There there, don’t be sad.