Citigroup bailout to deliver $12.3bn profit to U.S. taxpayers

The US treasury expects to net $312.2m on Monday when it sells the rest of its stake in Citigroup. The government holds 465.1m warrants in Citi that entitle it to purchase common shares in the banking group. The warrants, which it is auctioning, represent the remaining part of the US government’s $45bn investment in Citi during the financial crisis.

Taxpayers are expected to end up with a $12.3bn profit on the bailout, made under the troubled asset relief programme (TARP). The treasury sold its 34% stake of common shares of Citi last year.

“As we exit our investments in private companies and recover taxpayer dollars, it’s clear that the cost of the Tarp programme will be a fraction of what many had once feared during the depths of the crisis,” said Tim Massad, the treasury’s acting assistant secretary for financial stability.

The Tarp bailout is proving to be less expensive to taxpayers than first feared. The US government made $13.5bn selling its stake in General Motors. Last week the government chose four Wall Street banks to sell its stake in American Insurance Group (AIG), recipient of $180bn in bailout funds. The sale could be the largest in US history. AIG has already paid back significant chunks of the debt…

In his latest quarterly report, Neil Barofsky said “on the financial side, Tarp’s outlook has never been better. Not only did Tarp funds help head off a catastrophic financial collapse, but estimates of Tarp’s ultimate direct financial cost to the taxpayer have fallen substantially,” from $341bn in August 2009 to $25bn in November 2010.

Save a copy of this post for the next time your friendly neighborhood Tea Party nutball starts raving and ranting about how the socialist policies of the bailout were bankrupting the United States.

The U.S. Treasury is walking out of the remnants of Bush’s Great Recession smelling like a rose – the most successful bank in America.

Of course, you’ll have to point out 14 more sources for the information on repayment and the resulting profits. There isn’t anyone in the KoolAid Party who knows what actually is happening in the world of commerce.

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