April 24, 2012

TARP Disbursements

The Big Picture posts a great infographic depicting the US Treasury's Troubled Asset Relief Program, aka "the big bailout."

Interesting to note that of the $245 billion disbursed to purchase shares in banking institutions (thereby propping them up), all but $17 billion has been repaid through stock repurchase. The Treasury expects to gain about $25 billion from the sale of the remaining shares held.

About half the money disbursed to prop up GM and Chrysler has been repaid, and those companies appear healthier as a result.

The deadbeat: American International Group, the huge insurance company that sold billions in credit default swaps, in essence insuring those gambling financial firms against losses on their mortgage-backed security purchases. The MBSs became largely worthless when the real estate bubble burst, putting AIG on the hook for far more than they could pay. It'll be a long while before that portion of the TARP is repaid.