More encouraging news about the TARP program…

From Washington Post:

Among the banks that rule Wall Street, Citigroup got a bailout that was bigger than the rest. Now the company is about to pay a king’s ransom for its federal rescue.

The Obama administration is making final preparations to sell its stake in the New York bank, according to industry and federal sources. At today’s prices, the sale would net more than $8 billion, by far the largest profit returned from any firm that accepted bailout funds, and the transaction would be the second-largest stock sale in history.

On paper, the government’s 27 percent stake has grown in value to $33 billion. The size of the deal in the works has Wall Street buzzing. Only the stock offering by Japan’s Nippon Telegraph and Telephone, which raised $36.8 billion in 1987, was larger, according to Thomson Reuters.

So, considering that these banks were in serious peril in 2008 and now we’re looking at making profits from those deals…does anybody question that this was a good idea?

And, as a reminder…from the CBO’s projections in late January

The CBO projects the government will ultimately make a profit of $7 billion from assisting the banks: $3 billion from the Capital Purchase Program, in which the government propped up banks by purchasing preferred stock; $2 billion from helping Citigroup and another $2 billion from helping Bank of America.

In other words, the banks are on track not only to pay taxpayers back all the $200 billion plus we’ve lent them, but put a dent — albeit a small one — in our enormous budget deficits.

So, since the CBO thought Citigroup would only gain us $2M, looks like we’ll be up another $6B…which results in a $13B profit.

Seems a fair cry from the claims of conservative and libertarian economists’ claims that we’d lose this money forever.

But hey, let me know what you think…

Business Government To Gain $8B In Profit From Citigroup TARP Buyback