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Bailout Loss Estimated At $29 Billion Claim Us Treasury

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http://www.nytimes.com/2010/10/06/business/economy/06tarp.html?_r=1&ref=business

The Treasury Department expects to lose $29 billion on the federal bailouts stemming from the financial crisis, with most of the losses in its housing finance program and the auto rescue.

In a report released on Tuesday, the administration said it expected a $17 billion loss from its investments in General Motors, Chrysler and the auto finance companies, as well as a $46 billion loss from housing programs like the mortgage modification program known as the Home Affordable Modification Program.

The new figures, which include profits that offset some of the losses, come just as the Obama administration tries to wind down the bailout program known as the Troubled Asset Relief Program, or TARP. Last week, the government announced a plan to exit its investment in the insurer the American International Group.

Treasury officials have declared the bailout a success, emphasizing that much of the program’s money has been returned and that losses are now likely to be less than once expected. The cost, the report says, is far below the $350 billion the Congressional Budget Office once estimated.

“Because of the success of the program, TARP will likely cost a fraction of this amount,” the report said.

Recently, the Congressional Budget Office put the cost at $66 billion. And, after the bailout, the government will still be left with its investments in Fannie Mae and Freddie Mac, the government-backed housing finance companies. The report said Fannie and Freddie were expected to cause “substantial losses,” but it noted that they were financed using other funds, not the troubled asset funds.

The Treasury arrived at its figure by adding in profits that it expects to receive on shares of A.I.G. stock. Those shares were given to the Treasury by the Federal Reserve Bank of New York, and the Treasury expects they will yield a $22 billion profit. Without those shares, the Treasury would have reported a $51 billion loss, rather than a $29 billion loss, the report said.

In total, the Treasury has received back about $204 billion of the bailout funds, or just over half of the money it doled out. The report segregated the money given out under the Bush administration — $294 billion — from the $94 billion awarded under the current administration. All of the large bank bailouts were made under the prior administration, and since then, the money was invested in small banks, automakers, housing programs and A.I.G., the report said.

How nice especially as Freddie/Fannie are using other funds so those losses don't really count.....

Still I'm sure it's all contained and the recovery can progress full pace ahead.

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http://www.nytimes.c...=1&ref=business

How nice especially as Freddie/Fannie are using other funds so those losses don't really count.....

Still I'm sure it's all contained and the recovery can progress full pace ahead.

balanced by profits yet to materialise on those AIG shares it was Given.....course, the cost of them is on anither set of books too.

Edited by Bloo Loo

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balanced by profits yet to materialise on those AIG shares it was Given.....course, the cost of them is on anither set of books too.

Is it just me or is $29 billion now not starting to sound like much in relation to bailouts.

The word trillion is creeping into more articles and analyses.

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Is it just me or is $29 billion now not starting to sound like much in relation to bailouts.

The word trillion is creeping into more articles and analyses.

That's so when we give them trillions we'll see figures of hundreds of billions being recovered, with small scale losses of say $200bn - $300bn for the taxpayer.

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  • 144 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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