Tax payers are still in the red from the bailout money the government issued. However out of the $256 billion returned the government earned $56 billion in profits. $123 billion is still unpaid from the TARP and $133 billion from GSEs. Eventually all the bailout money will be returned but the question is how will the government capitalize and will the tax payers get a cut or anything.

Take a look at this charts, showing where the money is and the returns on investments.

Sources:
Behind Administration Spin: Bailout Still $123 Billion in the Red
Paul Kiel
ProPublica

http://www.propublica.org/article/behind-administration-spin-bailout-still-123-billion-in-the-red

The State of the Bailout

http://projects.propublica.org/bailout/main/summary

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Check out this info graphic from Perceptual Edge. The graphic presents the outrageous spending and the cost of the Iraq war. Money wasted and added to our deficit.

Thoughts from Ritholtz “Whenever I hear a a congress critter discussing deficit spending, the first thing I do is check their vote on the Iraq war to see if they are legitimately concerned about deficits, or not. … You will find most of these born again deficit hawks are hypocritical partisan hacks . . .”

“Deficit hawk or Hypocrite? You decide:”

• Iraq War Resolution, Roll Call Vote – House (clerk.house.gov)
• Iraq War Resolution, Roll Call Vote – Senate (senate.gov)

Sources:

www.ritholtz.com/blog/2011/01/the-three-trillion-dollar-war-2/
Perceptual Edge

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The U.S. Government is estimating to record a $7.7 billion profit according to the U.S. Treasury.

At the peak of the credit crisis in 2008 the government received 7.7 billion shares of Citigroup in return for $25 billion, and was repaid the $20 billion loan last December (TARP).

Late last year Citigroup announced millions of new shares to sell and at that time the government considered selling its stake as well. However, the treasury paid $3.25 a share and with the price at $3.15 a share the government would have lost $158.7 million so they backed out and decided to sell their shares systematically based on market conditions.

If the government is able to sell their stake at $4.25 a share they will earn $7.7 billion profit. Additionally, Morgan Stanley will handle the sale of those shares.

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AIG crashes nearly 15% to settle at $28.40 as a result of a report released by analyst Todd Bault of Bernstein Research. Todd Bault told investors that he downgraded AIG’s target price from $20 to $12 because of significantly deficient loss reserves. Bault foresees AIG’s loss reserves are short $11 billion, which translates close to $10 per share. Bault was also quoted saying that this was a “big surprise” with “significant implications.”

AIG has received $82 billion in taxpayer bailout funds. Therefore, one can classify this company as government owned. This wouldn’t be a stock I would recommend investing in for the long run. However, if you’re a day trader this would be a stock for you!

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