“U.S. Treasury Secretary Timothy Geithner said in a letter to Senator Judd Gregg last month that $70.1 billion in repayments from 32 banks that received government funds indicate financial firms are healing.”
“The banks have paid back funds from the $700 billion TARP program, enacted last year. Participating financial firms also have paid $5.2 billion in dividends to the U.S. government, Geithner said in the letter, dated June 30 and released July 7.”
– Banks buying back TARP warrants at a discount, panel says (Market Watch):
WASHINGTON (MarketWatch) — A panel that oversees the $700 billion bank bailout package said Friday that financial institutions buying out warrants they gave the government in exchange for capital injections are now buying back those stakes at well below their fair value. The Congressional Oversight Panel, which is charged with overseeing the Troubled Asset Relief Program, or TARP, said in a report that a group of 11 small banks that have repurchased government warrants in exchange for taxpayer-funded assistance, have bought-out the stakes at 66% of their face value.
… and the taxpayer pays for it all. Change!
July 13 (Bloomberg) — The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy.
The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.
Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing (?) because the jobless rate continues to rise — reaching a 26-year high in June — and companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the $787 billion stimulus program President Barack Obama signed into law in February.