Wednesday, April 1, 2009

Watch what I do, not what I say

If you have been an interested observer you've seen that Goldman Sachs, Wells, BofA and J.P, Morgan have all publicly stated that they would/will repay the TARP funds early and perhaps very soon.

The NY Times is reporting today that four small banks have done it already:

Signature Bank of New York said on Tuesday that it had repaid $120 million to the Treasury Department. Old National Bancorp of Indiana returned $100 million, Iberiabank of Louisiana paid back $90 million, and Bank of Marin Bancorp of Novato, Calif., repaid $28 million. All of the banks paid 5 percent interest on the money they had received."

I sincerely hope that some members of the mainstream media choose to focus on this. The perception that money was "given" to the banks and that nobody knows where it went is baloney. That it couldn't be traced dollar for dollar to new loans is unfortunate but stuff happens and the banks' balance sheet to a step function for the worse precisely during that period. Now that there are real live banks repaying the money, after having made interest payments on it, is news. The taxpayer made money. It will not with all banks and certainly not with AIG but let's tell the whole story.

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