Skip to content
 
If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Phys Org2)   Turns out the TARP was a TRAP all along   (phys.org) divider line
    More: Followup, Investment, Finance, Economics, fair return, Bank, U.S. taxpayers, government bailout of financial institutions, Rate of return  
•       •       •

2481 clicks; posted to Business » and Politics » on 18 Sep 2020 at 1:41 PM (6 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



35 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2020-09-18 1:49:57 PM  
No shiat.
 
2020-09-18 2:03:19 PM  
When the government completed its Troubled Asset Relief Program in 2014, the results were widely described as taxpayers getting back their full investment, plus interest.

"This is a misleading claim. Unfortunately, this narrative has found a large audience and it misses the point," said Amiyatosh Purnanandam, professor and chair of finance. "The real question is whether the return was good enough for the risk, not whether it was positive."


Stop evaluating governmental programs the way you evaluate private equity funds. Yes, there was a good chance the government would not get repaid. As a pure business proposition, it would have been an unsound investment. No shiat. That's not what this was about.
 
2020-09-18 2:06:14 PM  
... And, I will add, the whole notion that the government should be run like a business is and always has been a terrible idea, and it has gotten us into a horrible place as a country.
 
2020-09-18 2:13:00 PM  
Article is useless without stating what the effective rate of return on TARP actually was, and what a "fair" rate would have been.
 
2020-09-18 2:22:45 PM  
The lack of admirals in this thread is very unFarkish.
 
2020-09-18 2:29:21 PM  
I look forward to this professor's analysis of the 2017 Republican tax cut bill sometime by 2035.
 
2020-09-18 2:36:20 PM  

Rambino: The lack of admirals in this thread is very unFarkish.


historynet.comView Full Size
 
2020-09-18 2:37:04 PM  
i.redd.itView Full Size
 
2020-09-18 2:37:52 PM  
Fark user imageView Full Size
 
2020-09-18 2:38:47 PM  
upload.wikimedia.orgView Full Size
 
2020-09-18 2:40:05 PM  
vignette.wikia.nocookie.netView Full Size
 
2020-09-18 2:40:23 PM  
Better?
 
2020-09-18 3:04:51 PM  
WTF - did the Obvious tag call in sick or something?
 
2020-09-18 3:09:32 PM  
Fark user imageView Full Size


Better.
 
2020-09-18 3:50:34 PM  

tyyreaunn: Article is useless without stating what the effective rate of return on TARP actually was, and what a "fair" rate would have been.


that's like the weaselest article I've read in a long time
 
2020-09-18 4:17:21 PM  

tyyreaunn: Article is useless without stating what the effective rate of return on TARP actually was, and what a "fair" rate would have been.


I thought the ROI was avoiding the much higher costs associated with a chain reaction of financial institutions failing triggering a Depression. Without knowing how bad things would have gotten without TARP, it is hard to fully evaluate the true costs.

Of course, you also have to take into account the moral hazards created by the bailout, and the possibility that a failure of the financial system would have led to true reforms that would have put us in a better position today.
 
2020-09-18 4:38:49 PM  
Well, at least there was some returns

The money we threw in the pot for Covid, they've spoke nothing of it.
Just some corruption and no return

This virus harmed more that just health
Our debt is going to take a LONG time to recover, this time.
Hey, they're going to volunteer pay it back
 
2020-09-18 4:39:12 PM  
NOT volunteer
 
2020-09-18 5:36:48 PM  
it's easy.  You take what would have happened and you subtracted it from what did happen and then you divide by what would have happened.  You take that number, carve it in stone (a medium sized stone, like about the size of a 1975 Honda Civic) and then you drop it on the study's author for being so bad at this.
 
2020-09-18 5:47:55 PM  

Super Chronic: When the government completed its Troubled Asset Relief Program in 2014, the results were widely described as taxpayers getting back their full investment, plus interest.

"This is a misleading claim. Unfortunately, this narrative has found a large audience and it misses the point," said Amiyatosh Purnanandam, professor and chair of finance. "The real question is whether the return was good enough for the risk, not whether it was positive."

Stop evaluating governmental programs the way you evaluate private equity funds. Yes, there was a good chance the government would not get repaid. As a pure business proposition, it would have been an unsound investment. No shiat. That's not what this was about.


Only because Obama did it and Joe needs to latch on the leadership he supposedly had on the program.
 
2020-09-18 6:05:09 PM  
Average Americans knew it was a trap from the very start.
The wealth and income gap afterward along with the many handouts since have shown everyone( except the politicians)how much . They think they are getting over on us instead the rabble are trying to burn it down with a moron as president and his toadies.
 
2020-09-18 6:47:05 PM  
Super Chronic is correct.

tyyreaunn is technically correct and I too would like to point out the lack of context. And why I don't pay for journalism.
 
2020-09-18 7:53:04 PM  

Super Chronic: When the government completed its Troubled Asset Relief Program in 2014, the results were widely described as taxpayers getting back their full investment, plus interest.

"This is a misleading claim. Unfortunately, this narrative has found a large audience and it misses the point," said Amiyatosh Purnanandam, professor and chair of finance. "The real question is whether the return was good enough for the risk, not whether it was positive."

Stop evaluating governmental programs the way you evaluate private equity funds. Yes, there was a good chance the government would not get repaid. As a pure business proposition, it would have been an unsound investment. No shiat. That's not what this was about.


The GOP keeps talking about running the government like a business.  Given the higher incomes college graduates can expect, why give them education loans which are unforgivable, tied to their social security, with absurd penalties for missed payments, and at much higher interest rates than the prime rate or even the 30 year mortgage rate?  It's absurd.  Right now Trump and Powell are allowing the wealthy to gorge on a 0.75% interest buffet plus hundreds of billions in free grants.  For businesses that have no market.  Shouldn't those be loans from the private sector at private rates?  Why is the GOP picking winners and losers?
 
2020-09-18 9:21:27 PM  
The article mis-states the issue. The point is not "could the government have farked over the banks the same way the banks would have farked YOU over". The question is "did TARP save the national economy".
 
2020-09-18 9:50:33 PM  
This is an issue that merits long debate: despite the "risk", did the government intervention prevent other meltdowns?  For example, the intervention in financial futures (particularly of CDOs and CDSs) was framed as a defense of the integrity of the American financial system.

However, we've moved into the era of Bullshiat, where a president who touts coal can claim he's the "greatest environmental president since Teddy Roosevelt".
 
2020-09-18 11:21:56 PM  
TARP made sure that the companies that had farked it all up would be around to get bailouts in 2020.
 
2020-09-19 12:00:19 AM  
I propose a simple solution for this next time this happens: The companies get the bailout for the good of the economy, but one provision is that all their CEOs have to agree to execution or suicide. They want to play games with the economy, those are the consequences.
 
2020-09-19 8:22:33 AM  

Super Chronic: When the government completed its Troubled Asset Relief Program in 2014, the results were widely described as taxpayers getting back their full investment, plus interest.

"This is a misleading claim. Unfortunately, this narrative has found a large audience and it misses the point," said Amiyatosh Purnanandam, professor and chair of finance. "The real question is whether the return was good enough for the risk, not whether it was positive."

Stop evaluating governmental programs the way you evaluate private equity funds. Yes, there was a good chance the government would not get repaid. As a pure business proposition, it would have been an unsound investment. No shiat. That's not what this was about.


Government isn't about profit, government is supposed to be here to provide the services and support that Private Industry isn't willing to provide because profit is there driving motive.

Government, properly implemented, should always be there so that if the bottom falls out in your life you don't fall so far that you can never come back.
 
2020-09-19 11:00:03 AM  

Super Chronic: When the government completed its Troubled Asset Relief Program in 2014, the results were widely described as taxpayers getting back their full investment, plus interest.

"This is a misleading claim. Unfortunately, this narrative has found a large audience and it misses the point," said Amiyatosh Purnanandam, professor and chair of finance. "The real question is whether the return was good enough for the risk, not whether it was positive."

Stop evaluating governmental programs the way you evaluate private equity funds. Yes, there was a good chance the government would not get repaid. As a pure business proposition, it would have been an unsound investment. No shiat. That's not what this was about.


I'm not reading this as a criticism of doing TARP at all, rather a call to structure it better in the future.

Specifically, the last part was important here, that the firms that do make it need to share a larger portion of their profits with the people who bailed them out. In other words, they may have repaid us with interest, but we should have charged a higher rate to compensate us for the increased risk. As a taxpayer, I find this eminently reasonable.
 
2020-09-19 11:00:35 AM  

Super Chronic: ... And, I will add, the whole notion that the government should be run like a business is and always has been a terrible idea, and it has gotten us into a horrible place as a country.


Yes, yes it has.
 
2020-09-19 11:40:19 AM  
Phys-Org article on TARP?  This is like a Forbes article on science.

/pass
 
2020-09-19 3:36:40 PM  

cefm: The article mis-states the issue. The point is not "could the government have farked over the banks the same way the banks would have farked YOU over". The question is "did TARP save the national economy".


The answer is "yes".
I do resent the sale of millions of homes for $500 each to the ultra-wealthy, in bundles of hundreds of homes at auctions where you had to qualify and prove you were wealthy to bid.  It would have done a lot more for this country if the deeds were offered to the last owners at $500 each.
The other thing TARP and it's companion efforts failed to do was to prosecute those who caused the crisis.  Specifically Goldman, Moody's, Countrywide, and their co-conspirators.  Instead they were allowed to make money on both sides of the crisis.
But Stonks amirite?
 
2020-09-19 4:52:29 PM  
It worked exactly as intended, again. And it'll work the next time too.
 
2020-09-19 6:54:55 PM  

PhoenixFarker: I'm not reading this as a criticism of doing TARP at all, rather a call to structure it better in the future.

Specifically, the last part was important here, that the firms that do make it need to share a larger portion of their profits with the people who bailed them out. In other words, they may have repaid us with interest, but we should have charged a higher rate to compensate us for the increased risk. As a taxpayer, I find this eminently reasonable.


I said right here back in 2008-09, and I still say today that nobody should have been bailed out, ever, period.  But if they're going to do it anyway, then shareholders MUST be wiped out and bondholders need to take a very serious haircut.
 
2020-09-19 9:44:45 PM  

BMFPitt: PhoenixFarker: I'm not reading this as a criticism of doing TARP at all, rather a call to structure it better in the future.

Specifically, the last part was important here, that the firms that do make it need to share a larger portion of their profits with the people who bailed them out. In other words, they may have repaid us with interest, but we should have charged a higher rate to compensate us for the increased risk. As a taxpayer, I find this eminently reasonable.

I said right here back in 2008-09, and I still say today that nobody should have been bailed out, ever, period.  But if they're going to do it anyway, then shareholders MUST be wiped out and bondholders need to take a very serious haircut.


the problem was that AIG, through several subsidiaries, wrote almost 60% of the liability insurance for US industrial service providers. Crashing AIG would have resulted in almost all manufacturing in the US quickly coming to a halt. It would have been a lot more than the bond holders taking a "haircut"
 
Displayed 35 of 35 comments

View Voting Results: Smartest and Funniest

This thread is closed to new comments.

Continue Farking





On Twitter



  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.