Improved economy Citigroup ready to repay TARP

[top gun]

Bank of America with several other banks paid back... and now Citigroup and Wells Fargo ready to pay back all taxpayer bailout money. GM has said it's ready to start paying back it's bailout money.

I know this news just kills the "America must fail to hurt Obama crowd"... but like I've said from the beginning watch and see how different things are in a good way come the last quarter of 2010!

Citi positioned to repay TARP
09-12-2009

NEW YORK (Reuters) - Citigroup (Citigroup Inc) plans to pay back TARP by raising money in an equity offering that could be announced as early as this Thursday, cable television network CNBC reported on Wednesday, citing sources.

Earlier, the bank's chairman, Dick Parsons, told CNBC that Citigroup was in talks with regulators about repaying its $45 billion (27.6 billion pounds) bailout from the U.S. Treasury's Troubled Asset Relief Program.

"We believe Citigroup is in a position to repay the TARP money, but there is an active discussion we have to have with regulators ..." said Parsons, who was at New York Governor David Paterson's speech on the economy on Wednesday at the Museum of American Finance.

Citi spokesman Jon Diat declined to comment.

The reports come two days after Reuters reported on Monday that Citigroup and the U.S. government disagreed over how much the bank should raise to repay taxpayers, according to people briefed on the matter. The people said talks could take weeks or months.

Bank of America Corp (BK of America CP) sold $19.3 billion of shares last week and today announced it had completed repaying its $45 billion of government money borrowed through TARP. In June, major banks including Goldman Sachs Group (Goldman Sachs GRP), JPMorgan Chase (JP Morgan Chase CO) and Morgan Stanley (Morgan Stanley) paid back their bailouts.

Exiting TARP would allow Citigroup to get out from under the thumb of the U.S. government's pay czar, who has the authority to rule on how the bank pays its employees.

Citi shares closed down 5 cents at $3.86 on the New York Stock Exchange.

(Reporting by Steve Eder and Dan Wilchins; Editing by Leslie Gevirtz, Gerald E. McCormick and Steve Orlofsky)

 

[Bunz]

Stop trying to make this country a commie dictatorship

 

[top gun]

Stop trying to make this country a commie dictatorship

All my life I have tried to pluck a thistle and plant a flower wherever the flower would grow in thought and mind.
Abraham Lincoln

 

[BigRob]

Bank of America with several other banks paid back... and now Citigroup and Wells Fargo ready to pay back all taxpayer bailout money. GM has said it's ready to start paying back it's bailout money.

I know this news just kills the "America must fail to hurt Obama crowd"... but like I've said from the beginning watch and see how different things are in a good way come the last quarter of 2010!

Citi positioned to repay TARP
09-12-2009

NEW YORK (Reuters) - Citigroup (Citigroup Inc) plans to pay back TARP by raising money in an equity offering that could be announced as early as this Thursday, cable television network CNBC reported on Wednesday, citing sources.

Earlier, the bank's chairman, Dick Parsons, told CNBC that Citigroup was in talks with regulators about repaying its $45 billion (27.6 billion pounds) bailout from the U.S. Treasury's Troubled Asset Relief Program.

"We believe Citigroup is in a position to repay the TARP money, but there is an active discussion we have to have with regulators ..." said Parsons, who was at New York Governor David Paterson's speech on the economy on Wednesday at the Museum of American Finance.

Citi spokesman Jon Diat declined to comment.

The reports come two days after Reuters reported on Monday that Citigroup and the U.S. government disagreed over how much the bank should raise to repay taxpayers, according to people briefed on the matter. The people said talks could take weeks or months.

Bank of America Corp (BK of America CP) sold $19.3 billion of shares last week and today announced it had completed repaying its $45 billion of government money borrowed through TARP. In June, major banks including Goldman Sachs Group (Goldman Sachs GRP), JPMorgan Chase (JP Morgan Chase CO) and Morgan Stanley (Morgan Stanley) paid back their bailouts.

Exiting TARP would allow Citigroup to get out from under the thumb of the U.S. government's pay czar, who has the authority to rule on how the bank pays its employees.

Citi shares closed down 5 cents at $3.86 on the New York Stock Exchange.

(Reporting by Steve Eder and Dan Wilchins; Editing by Leslie Gevirtz, Gerald E. McCormick and Steve Orlofsky)

Let us remember that Citigroup was given not only cash but also got close to $300 billion in government guarantees of its bad assets. Those assets are still there.

You also have to remember that a lot of banks never even wanted TARP money, and the government basically forced some to take it to prevent bank runs.

It is good people are paying it back, however it remains doubtful that the bailouts overall will turn a profit, and it seems a lot of the profit from these repayments will go right back out the door in new spending, leaving us right where we are.

All of this aside, the government still had no role (in my opinion) bailing out anything in the private sector.

 

[top gun]

Let us remember that Citigroup was given not only cash but also got close to $300 billion in government guarantees of its bad assets. Those assets are still there.

You also have to remember that a lot of banks never even wanted TARP money, and the government basically forced some to take it to prevent bank runs.

It is good people are paying it back, however it remains doubtful that the bailouts overall will turn a profit, and it seems a lot of the profit from these repayments will go right back out the door in new spending, leaving us right where we are.

All of this aside, the government still had no role (in my opinion) bailing out anything in the private sector.

Good news is good news anyway someone wants to slice & dice it!

If things were not getting much better or getting worse these HUGE ENORMOUS paybacks would not/could not be happening.

As far as bailing out the private sector. I agree it should be avoided as much as possible or greedy businesses will only rely on it. That said this time we had very little choice.

My advice: Stricter regulation so these mega "too big to fail" type of businesses are benchmarked much more often looking for financial problems. This is exactly how insurance regulation is (Mom used to be the executive assistant to an insurance co. CEO). You play to hard and fast with your liquid funds and the state comes in an slaps you into receivership.

In addition: Make monopoly restrictions even tighter is some areas and/or don't allow what could be risky mega mergers that create a lot of these "too big to fail" mega businesses in the first place.

All in all though... just thrilled with this SUPER EARLY payback of taxpayers money news!

 

[BigRob]

Good news is good news anyway someone wants to slice & dice it!

If things were not getting much better or getting worse these HUGE ENORMOUS paybacks would not/could not be happening.

Is it really a good sign to you if a bank pays back money it never wanted/needed?

Certainly Citigroup has problems, however they are simply covering the cost by offering more stock. Why couldn't they do that to begin with? Additionally, the roughly $300 billion in toxic assets they hold are still there. That has not changed at all.

As far as bailing out the private sector. I agree it should be avoided as much as possible or greedy businesses will only rely on it. That said this time we had very little choice.

We had a choice.

My advice: Stricter regulation so these mega "too big to fail" type of businesses are benchmarked much more often looking for financial problems. This is exactly how insurance regulation is (Mom used to be the executive assistant to an insurance co. CEO). You play to hard and fast with your liquid funds and the state comes in an slaps you into receivership.

In addition: Make monopoly restrictions even tighter is some areas and/or don't allow what could be risky mega mergers that create a lot of these "too big to fail" mega businesses in the first place.

Why don't we not force people to make risky loans in the first place?

All in all though... just thrilled with this SUPER EARLY payback of taxpayers money news!

Being paid back is good... unfortunately it seems we have plans to spend it all again right away.

 

[Mirror Lake 444]

You also have to remember that a lot of banks never even wanted TARP money, and the government basically forced some to take it to prevent bank runs.

Bull! No one HAD to take the TARP money. That is just so ridiculous.

 

[BigRob]

Bull! No one HAD to take the TARP money. That is just so ridiculous.

The Bush White House applied tons of pressure to banks to accept money even if they did not want it.

The reason being is because if only a few banks got payments it would be a clear sign of which banks were weak, and it was widely believed it would cause bank runs on those banks, and ultimately do them in.

So a bank did not "have" to take TARP money, but if they wanted to maintain a good relation with the FED and have access to a good discount rate, they effectively had to take it.


That said, my original point has never been addressed. TARP was supposed to get toxic assets off the bank balance sheets. The TARP oversight committee in an August 2009 report said almost all those assets remained on the balance sheets, and in a December 2009 report they said TARP helped "at a significant long run cost to the performance of our market economy."

 

[top gun]

Is it really a good sign to you if a bank pays back money it never wanted/needed?

Almost all the banks not only wanted but were basically saying they'd go under without help. To do this type of thing properly it made total sense to stress test all banks to see if any were closer to failing due to poor liquidity than they were actually saying they were.

But to answer your question directly. Hell yes! Getting back hundreds of billions of dollars back with interest for the American taxpayer this early in the game is unbelievably great. Obama hasn't even been President a full year and things have stabilized that much. From begging for help not to go under... to paying back tens of billions at a time. All good!

Certainly Citigroup has problems, however they are simply covering the cost by offering more stock. Why couldn't they do that to begin with? Additionally, the roughly $300 billion in toxic assets they hold are still there. That has not changed at all.

Everything is now accounted for and stabilized. It's not at all the same ball game.

We had a choice.

True... choice of the cascading financial sector collapse renaming The Bush Recession, The Great Bush Recession. I was against that.

Why don't we not force people to make risky loans in the first place?

I've already called you out on this before with good documentation. Only 12%of belly up bad mortgages were sub prime loans.

That means a full 88% were actually very normal loans to totally qualified people that went bad because of a few things.

At the time lenders were big to push ARM's and even interest only loans. Not because they buyers had bad credit but because they could sell a bigger loan and make more money themselves. The other thing was the overall economy sourering and the job losses that come with that.

Vilifying that 12% of struggling new home owners and looking the other way on the problem of not enough standard regulation on the other 88% is unjustified.

Being paid back is good... unfortunately it seems we have plans to spend it all again right away.

Well I'm glad we agree now on that. I will be watching to see what happens from here. I'm sure we'll discuss it further.

 

[BigRob]

Almost all the banks not only wanted but were basically saying they'd go under without help. To do this type of thing properly it made total sense to stress test all banks to see if any were closer to failing due to poor liquidity than they were actually saying they were.

Stress tests came later as banks wanted to repay TARP, there were no stress tests in the beginning.

But to answer your question directly. Hell yes! Getting back hundreds of billions of dollars back with interest for the American taxpayer this early in the game is unbelievably great. Obama hasn't even been President a full year and things have stabilized that much. From begging for help not to go under... to paying back tens of billions at a time. All good!

And the end result is that we are now spending that money, so the deficit remains larger.

Everything is now accounted for and stabilized. It's not at all the same ball game.

Not according to the TARP oversight committee.

True... choice of the cascading financial sector collapse renaming The Bush Recession, The Great Bush Recession. I was against that.

So you admit you oppose a free market?

I've already called you out on this before with good documentation. Only 12%of belly up bad mortgages were sub prime loans.

Tell me in terms of dollars what 12% of mortgages amounts too, and then tell me that cannot pose a systemic risk.

 

[pocketfullofshells]

Let us remember that Citigroup was given not only cash but also got close to $300 billion in government guarantees of its bad assets. Those assets are still there.

You also have to remember that a lot of banks never even wanted TARP money, and the government basically forced some to take it to prevent bank runs.

It is good people are paying it back, however it remains doubtful that the bailouts overall will turn a profit, and it seems a lot of the profit from these repayments will go right back out the door in new spending, leaving us right where we are.

All of this aside, the government still had no role (in my opinion) bailing out anything in the private sector.

well if they never turn a profit, even came close....but saved us from a compleat econ melt down...then worked pretty damn well I say.

I don't think the US econ would have been able to handle that meltdown if it just let them all fail....it would kill any investment, make the carppy houseing market now look rosy, and crush companies like the one I work with who need that credit line to keep inventory ready for sale. even with the bail out the credit crunch hurt us bad in terms of what we could have ready for someone who wanted to buy...and trust me evry time I lost sale to that issue I was very aware....evry lost sale directly is lost money for me. 2000 buck sale that I can't get do to inventory issue...that was a few hundred bucks out my pocket....lose 2 of those in a month,..that was same as losing a months rent.....

 

[top gun]

Stress tests came later as banks wanted to repay TARP, there were no stress tests in the beginning.

The government did not FORCE money on banks without reason nor did they give TARP funds to every bank. They had a good preliminary idea of who was close to a potential problem.

And the end result is that we are now spending that money, so the deficit remains larger.

It has been purposed by some to use some of the returned TARP money for job creation.

So you admit you oppose a free market?

I oppose an almost total complete collapse of our economic sector turning The Bush Recession into The Bush Depression which would have cost Americans far far more in both money and suffering to turn around with the standard Republicant Hooverville approach.

Tell me in terms of dollars what 12% of mortgages amounts too, and then tell me that cannot pose a systemic risk.

That dog won't hunt... and you know it. It's not that a 12% default wouldn't hurt the system. It's that the other 88% which were standard loans were failing at the same time.

You have to admit your interpretation is a bit funny... The house had some termites in the basement and the tornado that hit at the same time was also the termites fault because without the termites the tornado would not have been able to demolish the house.

 

[BigRob]

The government did not FORCE money on banks without reason nor did they give TARP funds to every bank. They had a good preliminary idea of who was close to a potential problem.

The government essentially did force some banks to take the money, for the reasons I already outlined.

While it was not an outright forcing of them to take the money, if a bank loses access to a discount rate at the FED, it mind as well go out of business or get bought out.

It has been purposed by some to use some of the returned TARP money for job creation.

Actually, it has been passed in the House that a decent amount of it is going to that purpose.

I oppose an almost total complete collapse of our economic sector turning The Bush Recession into The Bush Depression which would have cost Americans far far more in both money and suffering to turn around with the standard Republicant Hooverville approach.

Supporting a bank bailout is akin to opposing the free market. Justify it all you will, but that is a simply truth.

Additionally, lately, it is "Obamavilles" that have sprung up. I imagine you have seen that in the paper? The everyday American public is no longer blaming Bush for our economic problems.

That dog won't hunt... and you know it. It's not that a 12% default wouldn't hurt the system. It's that the other 88% which were standard loans were failing at the same time.

Do tell why they were failing? Then we can get at the root of the problem.

Additionally, I am not sure where your 12% figure comes from, I have seen it go much higher, well into the 20's%.

You have to admit your interpretation is a bit funny... The house had some termites in the basement and the tornado that hit at the same time was also the termites fault because without the termites the tornado would not have been able to demolish the house.

Well, we can both accept that there were hundreds of billions, even trillions, in bad loans that were made worse by packaging them together and reselling them with AAA credit ratings.

All of these "toxic assets" remain on bank balance sheets by the way.

 

[top gun]

Additionally, lately, it is "Obamavilles" that have sprung up. I imagine you have seen that in the paper? The everyday American public is no longer blaming Bush for our economic problems.

HOOVER LOGIC ALERT! Just sit on your hands and do nothing and all will be fine. That's the strategy of... A ship is safest in the harbor... but that's not what ships are for. It's certainly not leadership in a trying and dangerous time.

Hey there are teabaggers who say the President isn't even the President, so that's just their personal problem. The unavoidable fact is you guys own this one mu friend. It's The Bush Recession (worst economic downturn sine The Great Depression). And every economist in the world knows exactly when this Bush snowball started rolling downhill.

Do tell why they were failing? Then we can get at the root of the problem.

Additionally, I am not sure where your 12% figure comes from, I have seen it go much higher, well into the 20's%.

I already told you. The banks were selling bad products to people with good credit. Highly adjustable ARM's when reasonable fixed rate loans were available and interest only loans. And it was also a combination of things some not even housing related but still economic sector related.

The 12% was the independent number stated when this first became an issue. Maybe I should be blaming the 88% of good credit loans going belly up as a factor in the 12% of sub-prime loans going bad. But I wouldn't do that.

Well, we can both accept that there were hundreds of billions, even trillions, in bad loans that were made worse by packaging them together and reselling them with AAA credit ratings.

All of these "toxic assets" remain on bank balance sheets by the way.

Yes we agree but there is now something being done about them. They've been identified and isolated. There will be some losses but there is value there as well. They'll become more attractive to investors looking for deals as the economy and the housing market continues to right itself.

Hopefully regulation changes will halt some of the practices that allowed this to happen.