Comments on: Taxpayers did OK on Goldman, Buffett did better

By: Reje

Reje — Thu, 23 Jul 2009 04:57:37 +0000

Rolfe, I am curious as to why the term ‘windfall profits’ has not entered the discussion considering that the funds are obtained below a true market clearing price and are backed by a government backstop – oh yeah, let us not forgot about the VAR exemption they obtained from the SEC.

I do not view GS as any more altruistic or virtous than Exxon or Conoco.

By: Rolfe Winkler

Rolfe Winkler — Wed, 22 Jul 2009 20:44:10 +0000

I don’t worry as much about that. If the government is making money on this, then private market players won’t want to be involved. The only reason they’re participating in the bailout programs (the only reason that policymakers give to justify them) is because the bailouts are cheaper than private funding sources.

I hear your point about TARP becoming permanent. Already Geithner is recycling funds. That’s certainly problematic. It wouldn’t be an issue if he was charging a premium for his money relative to the market, though. Then banks wouldn’t take it.

By: Andrew

Andrew — Wed, 22 Jul 2009 20:39:56 +0000

Point being that if the gov’t actually shows a profit doing this sort of stuff, then its more likely to do it in the future, not less.

The money’s gone regardless of the outcome. They’ve already held the gun to the taxpayer head and lifted our wallets, and then shown that any hope of the TARP paybacks actually being used to wind down the program was unrealistic. Even when all the TARP money is paid back, they’ll plow it into something else rather than end the program.

If the gov’t profits from TARP, what we’ll have actually seen is the creation of the first US sovereign investment fund and not a financial bailout.

I’d rather see the program go down in flames and leave a bad taste in the mouths of people and politicians alike. The tax payer would probably get a better return on their money to lose on the TARP funds than suffer the gov’t being intoxicated with “success” and start wallowing around in the economy with a new investment fund like a walrus on the beach during mating season.

By: Rolfe Winkler

Rolfe Winkler — Wed, 22 Jul 2009 20:27:04 +0000

Not sure what you mean. My point is that once we’re in, I want to be adequately compensated. Take deposit insurance….as long as it’s being provided, banks should be forced to pay up on their insurance premiums. We need to charge appropriate fees for the use of our balance sheet. Otherwise we’re providing a subsidy.

By: Andrew

Andrew — Wed, 22 Jul 2009 20:06:46 +0000

Soo… if you’re against bailouts, shouldn’t you in some way hope the gov’t LOSES money on the bailouts?