TARP Repayments

[patientrenter]

[quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)

[davelj]

[quote=patientrenter][quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)[/quote]

The average valuation on the Big Banks over the last 20 years has been about 2.2x book value. Consequently, in “normal” times, the market has determined that the present value of these banks’ future cash flows was worth north of a 100% premium to their GAAP equity. The MARKET capitalizes earnings – the banks do not capitalize earnings (since the restrictions placed on Gain on Sale accounting several years back). The banks capitalize estimated cash flows of the individual assets on the balance sheet, however, in order to come up with an estimate of value, however there is a bias toward using the asset’s cost basis unless it has become impaired. This is a long-winded way of saying that there really isn’t much difference between our banking system today and a recent college graduate – the future earnings of both will, on average, lead to a positive equity position… over a long enough time horizon.

Again, a spread lender – almost no matter how bad its balance sheet is – can repair that balance sheet given enough time. The FDIC is in the process of shutting down those banks that it deems to have such bad balance sheets that, in effect, they will take “too long” to earn their way back to solvency. The Big Banks have been exempted from this exercise because they are, in fact, Too Big To Fail (according to the Powers That Be). But we are going to see 500 banks, or thereabouts, fail this cycle because the FDIC simply doesn’t have the patience for these banks to repair themselves (and justifiably so). So, they’re doing these “calcs” that you’re discussing, although it’s not a transparent process because shutting banks down is, by nature, a process that requires discretion and, well, secrecy.

One of the challenges, however, is that all of this business requires a lot of guesstimates about what’s going to happen in the future. It isn’t an exact science… hence the messy nature of the whole process…

[davelj]

[quote=patientrenter][quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)[/quote]

The average valuation on the Big Banks over the last 20 years has been about 2.2x book value. Consequently, in “normal” times, the market has determined that the present value of these banks’ future cash flows was worth north of a 100% premium to their GAAP equity. The MARKET capitalizes earnings – the banks do not capitalize earnings (since the restrictions placed on Gain on Sale accounting several years back). The banks capitalize estimated cash flows of the individual assets on the balance sheet, however, in order to come up with an estimate of value, however there is a bias toward using the asset’s cost basis unless it has become impaired. This is a long-winded way of saying that there really isn’t much difference between our banking system today and a recent college graduate – the future earnings of both will, on average, lead to a positive equity position… over a long enough time horizon.

Again, a spread lender – almost no matter how bad its balance sheet is – can repair that balance sheet given enough time. The FDIC is in the process of shutting down those banks that it deems to have such bad balance sheets that, in effect, they will take “too long” to earn their way back to solvency. The Big Banks have been exempted from this exercise because they are, in fact, Too Big To Fail (according to the Powers That Be). But we are going to see 500 banks, or thereabouts, fail this cycle because the FDIC simply doesn’t have the patience for these banks to repair themselves (and justifiably so). So, they’re doing these “calcs” that you’re discussing, although it’s not a transparent process because shutting banks down is, by nature, a process that requires discretion and, well, secrecy.

One of the challenges, however, is that all of this business requires a lot of guesstimates about what’s going to happen in the future. It isn’t an exact science… hence the messy nature of the whole process…

[davelj]

[quote=patientrenter][quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)[/quote]

The average valuation on the Big Banks over the last 20 years has been about 2.2x book value. Consequently, in “normal” times, the market has determined that the present value of these banks’ future cash flows was worth north of a 100% premium to their GAAP equity. The MARKET capitalizes earnings – the banks do not capitalize earnings (since the restrictions placed on Gain on Sale accounting several years back). The banks capitalize estimated cash flows of the individual assets on the balance sheet, however, in order to come up with an estimate of value, however there is a bias toward using the asset’s cost basis unless it has become impaired. This is a long-winded way of saying that there really isn’t much difference between our banking system today and a recent college graduate – the future earnings of both will, on average, lead to a positive equity position… over a long enough time horizon.

Again, a spread lender – almost no matter how bad its balance sheet is – can repair that balance sheet given enough time. The FDIC is in the process of shutting down those banks that it deems to have such bad balance sheets that, in effect, they will take “too long” to earn their way back to solvency. The Big Banks have been exempted from this exercise because they are, in fact, Too Big To Fail (according to the Powers That Be). But we are going to see 500 banks, or thereabouts, fail this cycle because the FDIC simply doesn’t have the patience for these banks to repair themselves (and justifiably so). So, they’re doing these “calcs” that you’re discussing, although it’s not a transparent process because shutting banks down is, by nature, a process that requires discretion and, well, secrecy.

One of the challenges, however, is that all of this business requires a lot of guesstimates about what’s going to happen in the future. It isn’t an exact science… hence the messy nature of the whole process…

[davelj]

[quote=patientrenter][quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)[/quote]

The average valuation on the Big Banks over the last 20 years has been about 2.2x book value. Consequently, in “normal” times, the market has determined that the present value of these banks’ future cash flows was worth north of a 100% premium to their GAAP equity. The MARKET capitalizes earnings – the banks do not capitalize earnings (since the restrictions placed on Gain on Sale accounting several years back). The banks capitalize estimated cash flows of the individual assets on the balance sheet, however, in order to come up with an estimate of value, however there is a bias toward using the asset’s cost basis unless it has become impaired. This is a long-winded way of saying that there really isn’t much difference between our banking system today and a recent college graduate – the future earnings of both will, on average, lead to a positive equity position… over a long enough time horizon.

Again, a spread lender – almost no matter how bad its balance sheet is – can repair that balance sheet given enough time. The FDIC is in the process of shutting down those banks that it deems to have such bad balance sheets that, in effect, they will take “too long” to earn their way back to solvency. The Big Banks have been exempted from this exercise because they are, in fact, Too Big To Fail (according to the Powers That Be). But we are going to see 500 banks, or thereabouts, fail this cycle because the FDIC simply doesn’t have the patience for these banks to repair themselves (and justifiably so). So, they’re doing these “calcs” that you’re discussing, although it’s not a transparent process because shutting banks down is, by nature, a process that requires discretion and, well, secrecy.

One of the challenges, however, is that all of this business requires a lot of guesstimates about what’s going to happen in the future. It isn’t an exact science… hence the messy nature of the whole process…

[davelj]

[quote=patientrenter][quote=davelj]….
If mark-to-market accounting were required of most US citizens, a large percentage of them would be in “receivership” (re: bankrupt) as well. (That is, their liabilities are greater than their assets on a liquidation basis.)

To use an obvious example, consider just about every college student that graduates with a student loan…[/quote]

For the recent graduates with a student loan, their major asset is their future earnings. Hopefully, even a conservative estimate of those earnings far exceeds their debt. If not, then there is a bad debt issue.

For the banks, aren’t some of the future earnings capitalized, at least on a conservative basis? If not, it seems reasonable to do that. Why? To separate those that should be shut down from those that should be allowed to live, and in a transparent way that can be subjected to questioning. (It doesn’t have to be radical, just add and publish the calcs to the normal reports that don’t capitalize any future earnings.)[/quote]

The average valuation on the Big Banks over the last 20 years has been about 2.2x book value. Consequently, in “normal” times, the market has determined that the present value of these banks’ future cash flows was worth north of a 100% premium to their GAAP equity. The MARKET capitalizes earnings – the banks do not capitalize earnings (since the restrictions placed on Gain on Sale accounting several years back). The banks capitalize estimated cash flows of the individual assets on the balance sheet, however, in order to come up with an estimate of value, however there is a bias toward using the asset’s cost basis unless it has become impaired. This is a long-winded way of saying that there really isn’t much difference between our banking system today and a recent college graduate – the future earnings of both will, on average, lead to a positive equity position… over a long enough time horizon.

Again, a spread lender – almost no matter how bad its balance sheet is – can repair that balance sheet given enough time. The FDIC is in the process of shutting down those banks that it deems to have such bad balance sheets that, in effect, they will take “too long” to earn their way back to solvency. The Big Banks have been exempted from this exercise because they are, in fact, Too Big To Fail (according to the Powers That Be). But we are going to see 500 banks, or thereabouts, fail this cycle because the FDIC simply doesn’t have the patience for these banks to repair themselves (and justifiably so). So, they’re doing these “calcs” that you’re discussing, although it’s not a transparent process because shutting banks down is, by nature, a process that requires discretion and, well, secrecy.

One of the challenges, however, is that all of this business requires a lot of guesstimates about what’s going to happen in the future. It isn’t an exact science… hence the messy nature of the whole process…

[davelj]

[quote=davelj][quote=davelj]
I said many moons ago (I’ll try to find the thread) that we’d likely get back 80%-110% of the bank-related TARP. I think I can tighten that band to 90%-110%.
[/quote]

Found it: http://piggington.com/tarp_has_lost_40_since_inception

While we’re not out of the woods by any stretch and I expect continued ugliness and perhaps even a mini-crisis… I think the hysteria over bank-related TARP by certain Piggs in this thread was misplaced. But, again, we’re still only in the middle innings of this thing.[/quote]

An update:

**************************

KBW TARP Tracker – 76th Edition: “Oh So Close”

Summary–

We update our TARP Tracker to review the cost and returns to the Treasury to date from the TARP program. Specifically we review the TARP CPP program, the primary program supporting banks.

Key Points–

* The Treasury Is Very Close To Breaking Even on the TARP CPP as it invested $204.9B in 707 banking institutions, and earned back $204.1B to date. In total, Treasury received repayments totaling over $179B, earned income of $25B from dividends, interest, and warrant dispositions, and posted losses of $2.6B. The Treasury currently has about $23B remaining in outstanding CPP capital investments in 559 banking institutions.
* For the 101 banks that fully repaid CPP (inclusive of warrant disposition), Treasury’s average return on investment (ROI) is 9.3%, with seven investments yielding ROIs >=20%: First ULB Corp. (29%), Centra Financial Holdings (28%), FPBF (26%), AXP (23%), LNC (23%), FMWC (21%), and GS (20%). SBIB’s $125M CPP TARP investment has the lowest ROI of 2.9%.
* The Treasury posted a $2.6B loss on CPP investments in CIT, Pacific Coast National Bancorp, The South Financial Group and TIB Financial Corp.
* In aggregate, through February, the Treasury collected $10.6B in CPP dividends and interest, and tallied $204.3M in missed dividend and interest payments.
* A total of 163 institutions contributed to this $204.3M in non-current TARP dividend/interest payments.
* For the entire TARP program, Treasury invested $410.9B and has received $305.7B in repayments and income (inclusive of dividends, interest, warrant income, and other income). Treasury currently still has $142.5B in TARP investments outstanding.

**********************

So, with the passage of time I think I can say with a high degree of confidence that We the People are going to get back at least 105% of our principal on the TARP’s CPP (that is, the “bank-related TARP”), comfortably inside my initial prediction of 80%-110% of principal, or roughly break-even (perhaps a small loss) in real terms. I suspect that the entire TARP program will result in a loss of about 10% of principal… but that could be too high. We’ll know in about 18 months.

While TARP was, admittedly, just a part of the overall “assistance” given to financial institutions… this thread was about TARP, so I’m sticking to the topic at hand. TARP may be a horrible program in all sorts of ways (particularly with respect to moral hazard), but… the CPP money will get paid back, which few of you believed would happen. Not to worry, I don’t expect anyone to post acknowledging they were wrong about this.

[davelj]

[quote=davelj][quote=davelj]
I said many moons ago (I’ll try to find the thread) that we’d likely get back 80%-110% of the bank-related TARP. I think I can tighten that band to 90%-110%.
[/quote]

Found it: http://piggington.com/tarp_has_lost_40_since_inception

While we’re not out of the woods by any stretch and I expect continued ugliness and perhaps even a mini-crisis… I think the hysteria over bank-related TARP by certain Piggs in this thread was misplaced. But, again, we’re still only in the middle innings of this thing.[/quote]

An update:

**************************

KBW TARP Tracker – 76th Edition: “Oh So Close”

Summary–

We update our TARP Tracker to review the cost and returns to the Treasury to date from the TARP program. Specifically we review the TARP CPP program, the primary program supporting banks.

Key Points–

* The Treasury Is Very Close To Breaking Even on the TARP CPP as it invested $204.9B in 707 banking institutions, and earned back $204.1B to date. In total, Treasury received repayments totaling over $179B, earned income of $25B from dividends, interest, and warrant dispositions, and posted losses of $2.6B. The Treasury currently has about $23B remaining in outstanding CPP capital investments in 559 banking institutions.
* For the 101 banks that fully repaid CPP (inclusive of warrant disposition), Treasury’s average return on investment (ROI) is 9.3%, with seven investments yielding ROIs >=20%: First ULB Corp. (29%), Centra Financial Holdings (28%), FPBF (26%), AXP (23%), LNC (23%), FMWC (21%), and GS (20%). SBIB’s $125M CPP TARP investment has the lowest ROI of 2.9%.
* The Treasury posted a $2.6B loss on CPP investments in CIT, Pacific Coast National Bancorp, The South Financial Group and TIB Financial Corp.
* In aggregate, through February, the Treasury collected $10.6B in CPP dividends and interest, and tallied $204.3M in missed dividend and interest payments.
* A total of 163 institutions contributed to this $204.3M in non-current TARP dividend/interest payments.
* For the entire TARP program, Treasury invested $410.9B and has received $305.7B in repayments and income (inclusive of dividends, interest, warrant income, and other income). Treasury currently still has $142.5B in TARP investments outstanding.

**********************

So, with the passage of time I think I can say with a high degree of confidence that We the People are going to get back at least 105% of our principal on the TARP’s CPP (that is, the “bank-related TARP”), comfortably inside my initial prediction of 80%-110% of principal, or roughly break-even (perhaps a small loss) in real terms. I suspect that the entire TARP program will result in a loss of about 10% of principal… but that could be too high. We’ll know in about 18 months.

While TARP was, admittedly, just a part of the overall “assistance” given to financial institutions… this thread was about TARP, so I’m sticking to the topic at hand. TARP may be a horrible program in all sorts of ways (particularly with respect to moral hazard), but… the CPP money will get paid back, which few of you believed would happen. Not to worry, I don’t expect anyone to post acknowledging they were wrong about this.

[davelj]

[quote=davelj][quote=davelj]
I said many moons ago (I’ll try to find the thread) that we’d likely get back 80%-110% of the bank-related TARP. I think I can tighten that band to 90%-110%.
[/quote]

Found it: http://piggington.com/tarp_has_lost_40_since_inception

While we’re not out of the woods by any stretch and I expect continued ugliness and perhaps even a mini-crisis… I think the hysteria over bank-related TARP by certain Piggs in this thread was misplaced. But, again, we’re still only in the middle innings of this thing.[/quote]

An update:

**************************

KBW TARP Tracker – 76th Edition: “Oh So Close”

Summary–

We update our TARP Tracker to review the cost and returns to the Treasury to date from the TARP program. Specifically we review the TARP CPP program, the primary program supporting banks.

Key Points–

* The Treasury Is Very Close To Breaking Even on the TARP CPP as it invested $204.9B in 707 banking institutions, and earned back $204.1B to date. In total, Treasury received repayments totaling over $179B, earned income of $25B from dividends, interest, and warrant dispositions, and posted losses of $2.6B. The Treasury currently has about $23B remaining in outstanding CPP capital investments in 559 banking institutions.
* For the 101 banks that fully repaid CPP (inclusive of warrant disposition), Treasury’s average return on investment (ROI) is 9.3%, with seven investments yielding ROIs >=20%: First ULB Corp. (29%), Centra Financial Holdings (28%), FPBF (26%), AXP (23%), LNC (23%), FMWC (21%), and GS (20%). SBIB’s $125M CPP TARP investment has the lowest ROI of 2.9%.
* The Treasury posted a $2.6B loss on CPP investments in CIT, Pacific Coast National Bancorp, The South Financial Group and TIB Financial Corp.
* In aggregate, through February, the Treasury collected $10.6B in CPP dividends and interest, and tallied $204.3M in missed dividend and interest payments.
* A total of 163 institutions contributed to this $204.3M in non-current TARP dividend/interest payments.
* For the entire TARP program, Treasury invested $410.9B and has received $305.7B in repayments and income (inclusive of dividends, interest, warrant income, and other income). Treasury currently still has $142.5B in TARP investments outstanding.

**********************

So, with the passage of time I think I can say with a high degree of confidence that We the People are going to get back at least 105% of our principal on the TARP’s CPP (that is, the “bank-related TARP”), comfortably inside my initial prediction of 80%-110% of principal, or roughly break-even (perhaps a small loss) in real terms. I suspect that the entire TARP program will result in a loss of about 10% of principal… but that could be too high. We’ll know in about 18 months.

While TARP was, admittedly, just a part of the overall “assistance” given to financial institutions… this thread was about TARP, so I’m sticking to the topic at hand. TARP may be a horrible program in all sorts of ways (particularly with respect to moral hazard), but… the CPP money will get paid back, which few of you believed would happen. Not to worry, I don’t expect anyone to post acknowledging they were wrong about this.

[davelj]

[quote=davelj][quote=davelj]
I said many moons ago (I’ll try to find the thread) that we’d likely get back 80%-110% of the bank-related TARP. I think I can tighten that band to 90%-110%.
[/quote]

Found it: http://piggington.com/tarp_has_lost_40_since_inception

While we’re not out of the woods by any stretch and I expect continued ugliness and perhaps even a mini-crisis… I think the hysteria over bank-related TARP by certain Piggs in this thread was misplaced. But, again, we’re still only in the middle innings of this thing.[/quote]

An update:

**************************

KBW TARP Tracker – 76th Edition: “Oh So Close”

Summary–

We update our TARP Tracker to review the cost and returns to the Treasury to date from the TARP program. Specifically we review the TARP CPP program, the primary program supporting banks.

Key Points–

* The Treasury Is Very Close To Breaking Even on the TARP CPP as it invested $204.9B in 707 banking institutions, and earned back $204.1B to date. In total, Treasury received repayments totaling over $179B, earned income of $25B from dividends, interest, and warrant dispositions, and posted losses of $2.6B. The Treasury currently has about $23B remaining in outstanding CPP capital investments in 559 banking institutions.
* For the 101 banks that fully repaid CPP (inclusive of warrant disposition), Treasury’s average return on investment (ROI) is 9.3%, with seven investments yielding ROIs >=20%: First ULB Corp. (29%), Centra Financial Holdings (28%), FPBF (26%), AXP (23%), LNC (23%), FMWC (21%), and GS (20%). SBIB’s $125M CPP TARP investment has the lowest ROI of 2.9%.
* The Treasury posted a $2.6B loss on CPP investments in CIT, Pacific Coast National Bancorp, The South Financial Group and TIB Financial Corp.
* In aggregate, through February, the Treasury collected $10.6B in CPP dividends and interest, and tallied $204.3M in missed dividend and interest payments.
* A total of 163 institutions contributed to this $204.3M in non-current TARP dividend/interest payments.
* For the entire TARP program, Treasury invested $410.9B and has received $305.7B in repayments and income (inclusive of dividends, interest, warrant income, and other income). Treasury currently still has $142.5B in TARP investments outstanding.

**********************

So, with the passage of time I think I can say with a high degree of confidence that We the People are going to get back at least 105% of our principal on the TARP’s CPP (that is, the “bank-related TARP”), comfortably inside my initial prediction of 80%-110% of principal, or roughly break-even (perhaps a small loss) in real terms. I suspect that the entire TARP program will result in a loss of about 10% of principal… but that could be too high. We’ll know in about 18 months.

While TARP was, admittedly, just a part of the overall “assistance” given to financial institutions… this thread was about TARP, so I’m sticking to the topic at hand. TARP may be a horrible program in all sorts of ways (particularly with respect to moral hazard), but… the CPP money will get paid back, which few of you believed would happen. Not to worry, I don’t expect anyone to post acknowledging they were wrong about this.

[davelj]

[quote=davelj][quote=davelj]
I said many moons ago (I’ll try to find the thread) that we’d likely get back 80%-110% of the bank-related TARP. I think I can tighten that band to 90%-110%.
[/quote]

Found it: http://piggington.com/tarp_has_lost_40_since_inception

While we’re not out of the woods by any stretch and I expect continued ugliness and perhaps even a mini-crisis… I think the hysteria over bank-related TARP by certain Piggs in this thread was misplaced. But, again, we’re still only in the middle innings of this thing.[/quote]

An update:

**************************

KBW TARP Tracker – 76th Edition: “Oh So Close”

Summary–

We update our TARP Tracker to review the cost and returns to the Treasury to date from the TARP program. Specifically we review the TARP CPP program, the primary program supporting banks.

Key Points–

* The Treasury Is Very Close To Breaking Even on the TARP CPP as it invested $204.9B in 707 banking institutions, and earned back $204.1B to date. In total, Treasury received repayments totaling over $179B, earned income of $25B from dividends, interest, and warrant dispositions, and posted losses of $2.6B. The Treasury currently has about $23B remaining in outstanding CPP capital investments in 559 banking institutions.
* For the 101 banks that fully repaid CPP (inclusive of warrant disposition), Treasury’s average return on investment (ROI) is 9.3%, with seven investments yielding ROIs >=20%: First ULB Corp. (29%), Centra Financial Holdings (28%), FPBF (26%), AXP (23%), LNC (23%), FMWC (21%), and GS (20%). SBIB’s $125M CPP TARP investment has the lowest ROI of 2.9%.
* The Treasury posted a $2.6B loss on CPP investments in CIT, Pacific Coast National Bancorp, The South Financial Group and TIB Financial Corp.
* In aggregate, through February, the Treasury collected $10.6B in CPP dividends and interest, and tallied $204.3M in missed dividend and interest payments.
* A total of 163 institutions contributed to this $204.3M in non-current TARP dividend/interest payments.
* For the entire TARP program, Treasury invested $410.9B and has received $305.7B in repayments and income (inclusive of dividends, interest, warrant income, and other income). Treasury currently still has $142.5B in TARP investments outstanding.

**********************

So, with the passage of time I think I can say with a high degree of confidence that We the People are going to get back at least 105% of our principal on the TARP’s CPP (that is, the “bank-related TARP”), comfortably inside my initial prediction of 80%-110% of principal, or roughly break-even (perhaps a small loss) in real terms. I suspect that the entire TARP program will result in a loss of about 10% of principal… but that could be too high. We’ll know in about 18 months.

While TARP was, admittedly, just a part of the overall “assistance” given to financial institutions… this thread was about TARP, so I’m sticking to the topic at hand. TARP may be a horrible program in all sorts of ways (particularly with respect to moral hazard), but… the CPP money will get paid back, which few of you believed would happen. Not to worry, I don’t expect anyone to post acknowledging they were wrong about this.

[sdrealtor]

Thanks for the update and FWIW I beleived you. I guess that doesnt qualify as an I was wrong post though.

[sdrealtor]

Thanks for the update and FWIW I beleived you. I guess that doesnt qualify as an I was wrong post though.

[sdrealtor]

Thanks for the update and FWIW I beleived you. I guess that doesnt qualify as an I was wrong post though.

[sdrealtor]

Thanks for the update and FWIW I beleived you. I guess that doesnt qualify as an I was wrong post though.

[Author]

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