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"The Taxpayers are being raped!!!!!"......lets see how the numbers work out..... Chairman of the Federal Reserve, Ben Bernake, yesterday said that he sees the TARP potentially breaking even...........
Lets take a step back a look at what has been happening:
US government sells 5 year notes at 1.87% and raises $700B.
US government invests money it receives from selling the notes in TARP banks who pay 5% interest(dividends) + the government receives15% of the balance in warrants which can be sold on the open market.
example: as of 5/8/09 the government had invested a total of $20B in Goldman Sachs and Morgan Stanley. They have each paid $250M in dividends(interest) for the first quarter, and the warrants that the government received for $0 are now worth a total of $3.4Billion........lets see invest $20B for 3 months....get paid a total of $500M in dividends, and now have warrants that can be sold on the open market for $3.4 Billion? 19.5% return for a 3- 5 month investment.........This sounds like a bad deal ???
US government received a total of $2.7B in dividends for their investment for the 1st quarter alone......... (didn't hear about that in the torch and pitchfork main stream media did you?)
US Government changes cost of funds for banks making it virtually impossible for them to not make excessive profits (0-.25% cost of funds)
US Government makes profits on spread between 1.87% they pay for interest on the notes and 5-8% the receive in return from the banks
Original TARP rules had huge penalty for repaying TARP prior to 5 year plan life...thus locking in their investment and profits.... if the banks do not repay it in 5 years the dividend rate goes to 9%.
US Government sets up kangaroo court to damn the banks on public tv to push attention away from the lawmakers role in this fiasco
On second round of TARP money US government pays 1.87% for money it loans out at 8%(on second TARP round to Citi & BofA) which is fully secured
If this is such a bad deal for the taxpayer....PLEASE .....LINE ME UP TO BE SCREWED LIKE THIS!!!!! Let me borrow money at less than 2% and get a 19.5% return!!!!!
This is arbitrage for the government's profit to fund their programs and control commerce like what is happening at Chrysler and GM. The "sheeples" in America sit around being "outraged" at the banks and not question how the Congress, through its social engineering policies, got us in this mess.
