Amount repaid by TARP recipients surpasses outstanding balance

I think anticipation is that about half of the remaining 190 will get repaid eventually.

Not really breaking even...

so if you "loaned" me $100,000 and I paid you back $50,000 you would break even?

this would be good news, but the 50% paid back was largely due to the govt. forcing some institutions to take the TARP money even when they didn't want/need those funds. The numbers are inflated.

BTW don't forget about these guys. LINK ][LINK]

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Come on folks, be fair. You know that is not what he meant. He was simply saying we've passed the half way point.

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I spoke poorly. I said "makes my day" when I meant "would make my day".

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Probably accurate.

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I challenge either of you to make a legit case for that outside of JPM.

I think it might have slightly added to it, but [to be fair] an immaterial amount. Its more likely he just vastly underestimated the downturn (that was in July 08), in both magnitude short-term and in length long-term. Ignoring that I think the article generally comes off as very pro-GSE, Baghdad Bob-esque, I point to this quote:

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Let's assume for the moment that 5 percent of the $5.2 trillion in mortgages that Fannie Mae and Freddie Mac hold or insure goes bad, which would represent a massive (and unlikely) uptick from current numbers.

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I'm sure I don't need to tell you that we passed 5% in serious delinquencies a long ways back (yes I realize they have recently come down from their highs, no I do not think that is a new trend). Anyway, I'm not trying to pick on the guy.

Its sad, they are just such an intractable problem and the housing market's reliance on them has only gotten worse. Not to mention the FHA, which is where I think your stimulus effects show up/are showing up en masse.

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I think the article generally comes off as very pro-GSE

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Yeah, I think that was the point. It was meant to be more rhetorical/logical than quantitative I think. This was written when the official line from Paulson to sell the legislation to Congress was that it was merely a precautionary measure and that he might not have to use the proposed authority at all.

While he was obviously low-balling the estimates (others at the time put estimates as high as around $600 billion), Gross does deserve a little bit of credit for being one of the few unabashedly pro-GSE guys at the time who openly admitted (1) that there had been a Congressionally acknowledged implicit subsidy going on for years, and (2) that we as taxpayers should pay the honest price in exchange for our desired policy preferences regarding cheap housing.

He needed 2 bazookas.

The original plan when Paulson pulled the trigger on Sept. 7, 2008, courtesy of the NY Times ( LINK):

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Paulson refused to say how much capital the government might have to provide or what the cost to taxpayers might ultimately be. The companies are likely to need tens of billions of dollars over the next year, but the cost to taxpayers will largely depend on how fast the housing and mortgage markets recover.

Paulson's plan begins with a pledge to provide additional cash by buying a new series of preferred shares that would offer dividends and be senior to both the existing preferred shares and the common stock that investors around the world already hold.

The two companies will be allowed to "modestly increase" the size of their existing investment portfolios until the end of 2009, which means they will be allowed to use some of their new taxpayer-supplied capital to buy and hold new mortgages in investment portfolios.

But in a strong indication of Paulson's long-term intention to wind down the companies' portfolios, drastically shrink the role of Fannie and Freddie and perhaps eliminate their unique status altogether, the plan calls for the companies to start reducing their investment portfolios 10 percent a year, beginning in 2010.

The investment portfolios are now slightly more than $1.4 trillion, and the plan calls for that to eventually shrink to $250 billion each, or $500 billion total.

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