The NY Times is reporting new estimates from the Treasury Department about the extent of the government’s exposure from the TARP programs. Some of the highlights:

  • Treasury Department loans under the TARP program now total $370 billion.
  • Of that amount, a net $328 billion is projected to be recovered. That includes profits on TARP investments. The losses are centered on the TARP bailouts to GM, Chrysler and AIG. Bailouts to banks are expected to be net positive (more gains than losses).
  • The improved picture lowers the estimated deficit for the fiscal year by $200 billion.
  • Most of the exposure comes from the TARP I program from October 2008. Of the additional $500 billion in authority granted in February (TARP II), only $7 billion has had to be expended.

Of course, the article points out that there are other huge government exposures related to rescuing the financial markets, including a trillion dollars of mortgage-backed securities purchased by the Federal Reserve. But looking at just the TARP piece of the government intervention, is it just me, or does this emerging picture demonstrate a vastly more successful TARP program than we first imagined? I wonder if Geithner’s critics are¬†going to be willing to reevaluate his performance.


We, the people own 80% of AIG. It is time to stop acting like babies, and start acting like owners. Billions of dollars flow through our company every month. The reality is that, in the first quarter of 2009, our company has either made or lost many billions of dollars. I have no idea which. I do know that the answer to that question matters about 10,000 times more than how much it paid in bonuses.

When management has to present quarterly results to Warren Buffet, do you think he tunes out HUGELY important things like revenue growth and net profit and operating income, and skips right down to page 382 to ask about bonus payments??? I don’t think so.

To give a different example, the government now owns a 36% stake in Citigroup. That company recently announced that it is estimating a profit of $8.3 billion in the first quarter. Be happy people: we own 36% of that profit — $3 billion for us! Just one company, and that is far, far, far, far more than the AIG bonuses being kicked around.

Stay focused on the important things.