Episode Transcript
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Speaker 1 (00:00):
Today's Q and A where corporate bailouts ever paid back.
This is brought to you by Molista Nashes check Mark Collections.
Each day I feature a listener question that is sent
by one of these methods. You may email me Brian
Mudd at iHeartMedia dot com, hit me up on social
at Brian Mudradio. May also use the iHeartRadio talkback feature.
We'd love it if you would love us, go into
(00:20):
the iHeart Radio app. Make w J and O your
number one preset, VRO Patriot your number two preset. How
about that? And then you can make the Brian Mudshow
podcast number three. I always tell you to do like
J and O or VO. You can actually do all three.
You just make it all happen. That kind of cool,
stinking out loud here anyway, when you're there, you'll see
a little microphone button. You see it, It's happen. You
(00:41):
may lay down the message right here, maybe something for
a future Q and A like this. Good morning guys,
did the banks and the airlines ever pay back the
bailout money? Thank you? Have a good day. Yeah. So,
in the wake of the longest federal government shutdown in
the American history, and with the debate on going about
the future of Obamacare and the Not So Affordable Care
(01:05):
Act subsidies comes today's question about what happened with federal
government bailouts of kind of that same era It started
during the previous administration, because TARP actually came about when
Bush was still president and Republicans still had influence in Congress,
which was not the case at all when the Not
(01:26):
So Affordable Care Act was passed with Democrats in control
of everything. But whatever happened to the taxpayer money used
to prop up the banks, auto companies, and related companies,
So the Troubled Asset Relief Program I remember TARP. It
was established in October of two thousand and eight, the
(01:46):
financial crisis was really getting going. Under the Emergency Economic
Stabilization Act, and A doled out money to a total
of nine hundred and ninety one companies. The total amount
doled out six hundred and thirty five billion dollars, with
five hundred and fifty five billion of that going to
financial service companies and about eighty billion going to other entities,
(02:12):
largely American automotive companies. The stated objectives at the time
were these prevent the collapse of major financial institutions, restore
liquidity and confidence in the credit markets, and mitigate foreclosures
and support economic recovery. So the way TARP was carried
out worked like this. The US Treasury was authorized to
(02:32):
purchase up to seven hundred billion dollars and troubled assets.
So called troubled assets often like mortgage backed securities from banks.
Funds were primarily used for direct capital injections into the
banks via preferred stock purchases. Now it's that second piece,
(02:54):
the preferred stock purchases, that proved to be key in
the long term outcome of the TAR program and its
impact on taxpayers. Had the program simply been reliant on
companies repaying the bailout money they received the program, what
do you think, Joel, It just simply hey, we gave
you this, give it back. I think that would have
(03:14):
think that worked out? No, did not. You're right. Of
the six hundred and thirty five billion paid through the program,
only three hundred and ninety billion was ever directly paid back.
Not only would that have been a loss of two
hundred and forty five billion dollars that's back then in
two day's dollars. That would have been the equivalent of
(03:38):
a three hundred and seventy billion dollar loss, or the
equivalent of nineteen hundred dollars per federal taxpayer. But and
there's a big old b on this butt in a
good way for a change. That wasn't the end of
(03:58):
the story. Due to this stock ownership interest in many
institutions which recovered from the financial crisis, an additional three
hundred and fifty three billion dollars was derived through those
assets over time, and by the time the program was unwound,
(04:18):
TARP produced a net profit for the federal government of
approximately one hundred and eight billion dollars. Among the largest
recipients of TART funds, here are names that turned a
profit for the federal government. Many of them were like
where most of the angst was pointed at the time
(04:40):
this was all going down. Fannie May, Freddie mack Aig,
City Group, Bank of America, JP, Morgan, Chase, Wells, Fargo,
Ally Financial, Morgan, Stanley, Goldman, Sachs, p and C to One,
(05:00):
sun Trust now Truist, and American Express all term profits.
Among the companies that lost money for the federal government
during TARP, General Motors, Chrysler, Wills, Fargo's mortgage servicing company,
JP Morgan Chase's mortgage servicing company, Vava's mortgage servicing company,
and also Citty Mortgage back in the day. So with
(05:21):
nine hundred and ninety one companies having been involved, there
are no short just story lines associated with the TARP
program back in the day, how the bailouts were doled out,
and everything else unbalance, though, the TARP program proved to
be a success, serving to create some stabuilding in the
financial system while again leading to a net profit, a
meaningful profit by the time it was all unwound, and
(05:43):
so notably the federal government's equity interest in companies proving
to have been a good value for taxpayers. You actually
have President Trump most recently, it's kind of employed that
strategy while seeking to secure rare earth minerals and technology
needs for US defense efforts. Back in August, President Trump
invested just over eleven billion into Intel. By the way,
based upon Intel's current share price, the federal government's already
(06:05):
realized about a seven and a half billion dollar profit
on that investment. The Trump administration also ended up investing
in rare earth mineral companies, one of those investments made
just last week for what we can see in the
public markets already a ten percent net return on that.
So it's clear that President Trump's kind of using some
of those techniques that were successful during the troubled asset
(06:29):
relief program, this preferred stock purchases in a different way
to deal with some of our country's needs today. Of course,
there's that fine line, because you go too far with
this thing, then you start talking about nationalization. Obviously now
where we want to go.
Today's Q and A where corporate bailouts ever paid back.
This is brought to you by Molista Nashes check Mark Collections.
Each day I feature a listener question that is sent
by one of these methods. You may email me Brian
Mudd at iHeartMedia dot com, hit me up on social
at Brian Mudradio. May also use the iHeartRadio talkback feature.
We'd love it if you would love us, go into
(00:20):
the iHeart Radio app. Make w J and O your
number one preset, VRO Patriot your number two preset. How
about that? And then you can make the Brian Mudshow
podcast number three. I always tell you to do like
J and O or VO. You can actually do all three.
You just make it all happen. That kind of cool,
stinking out loud here anyway, when you're there, you'll see
a little microphone button. You see it, It's happen. You
(00:41):
may lay down the message right here, maybe something for
a future Q and A like this. Good morning guys,
did the banks and the airlines ever pay back the
bailout money? Thank you? Have a good day. Yeah. So,
in the wake of the longest federal government shutdown in
the American history, and with the debate on going about
the future of Obamacare and the Not So Affordable Care
(01:05):
Act subsidies comes today's question about what happened with federal
government bailouts of kind of that same era It started
during the previous administration, because TARP actually came about when
Bush was still president and Republicans still had influence in Congress,
which was not the case at all when the Not
(01:26):
So Affordable Care Act was passed with Democrats in control
of everything. But whatever happened to the taxpayer money used
to prop up the banks, auto companies, and related companies,
So the Troubled Asset Relief Program I remember TARP. It
was established in October of two thousand and eight, the
(01:46):
financial crisis was really getting going. Under the Emergency Economic
Stabilization Act, and A doled out money to a total
of nine hundred and ninety one companies. The total amount
doled out six hundred and thirty five billion dollars, with
five hundred and fifty five billion of that going to
financial service companies and about eighty billion going to other entities,
(02:12):
largely American automotive companies. The stated objectives at the time
were these prevent the collapse of major financial institutions, restore
liquidity and confidence in the credit markets, and mitigate foreclosures
and support economic recovery. So the way TARP was carried
out worked like this. The US Treasury was authorized to
(02:32):
purchase up to seven hundred billion dollars and troubled assets.
So called troubled assets often like mortgage backed securities from banks.
Funds were primarily used for direct capital injections into the
banks via preferred stock purchases. Now it's that second piece,
(02:54):
the preferred stock purchases, that proved to be key in
the long term outcome of the TAR program and its
impact on taxpayers. Had the program simply been reliant on
companies repaying the bailout money they received the program, what
do you think, Joel, It just simply hey, we gave
you this, give it back. I think that would have
(03:14):
think that worked out? No, did not. You're right. Of
the six hundred and thirty five billion paid through the program,
only three hundred and ninety billion was ever directly paid back.
Not only would that have been a loss of two
hundred and forty five billion dollars that's back then in
two day's dollars. That would have been the equivalent of
(03:38):
a three hundred and seventy billion dollar loss, or the
equivalent of nineteen hundred dollars per federal taxpayer. But and
there's a big old b on this butt in a
good way for a change. That wasn't the end of
(03:58):
the story. Due to this stock ownership interest in many
institutions which recovered from the financial crisis, an additional three
hundred and fifty three billion dollars was derived through those
assets over time, and by the time the program was unwound,
(04:18):
TARP produced a net profit for the federal government of
approximately one hundred and eight billion dollars. Among the largest
recipients of TART funds, here are names that turned a
profit for the federal government. Many of them were like
where most of the angst was pointed at the time
(04:40):
this was all going down. Fannie May, Freddie mack Aig,
City Group, Bank of America, JP, Morgan, Chase, Wells, Fargo,
Ally Financial, Morgan, Stanley, Goldman, Sachs, p and C to One,
(05:00):
sun Trust now Truist, and American Express all term profits.
Among the companies that lost money for the federal government
during TARP, General Motors, Chrysler, Wills, Fargo's mortgage servicing company,
JP Morgan Chase's mortgage servicing company, Vava's mortgage servicing company,
and also Citty Mortgage back in the day. So with
(05:21):
nine hundred and ninety one companies having been involved, there
are no short just story lines associated with the TARP
program back in the day, how the bailouts were doled out,
and everything else unbalance, though, the TARP program proved to
be a success, serving to create some stabuilding in the
financial system while again leading to a net profit, a
meaningful profit by the time it was all unwound, and
(05:43):
so notably the federal government's equity interest in companies proving
to have been a good value for taxpayers. You actually
have President Trump most recently, it's kind of employed that
strategy while seeking to secure rare earth minerals and technology
needs for US defense efforts. Back in August, President Trump
invested just over eleven billion into Intel. By the way,
based upon Intel's current share price, the federal government's already
(06:05):
realized about a seven and a half billion dollar profit
on that investment. The Trump administration also ended up investing
in rare earth mineral companies, one of those investments made
just last week for what we can see in the
public markets already a ten percent net return on that.
So it's clear that President Trump's kind of using some
of those techniques that were successful during the troubled asset
(06:29):
relief program, this preferred stock purchases in a different way
to deal with some of our country's needs today. Of course,
there's that fine line, because you go too far with
this thing, then you start talking about nationalization. Obviously now
where we want to go.
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