US makes $4 bn as banks begin repaying bailout aid

Nearly a year after the federal rescue of the nations biggest banks,taxpayers have begun seeing profits from the hundreds...

Nearly a year after the federal rescue of the nations biggest banks,taxpayers have begun seeing profits from the hundreds of billions of dollars in aid that many critics thought might never be seen again. The profits,collected from eight of the biggest banks that have fully repaid their obligations to the government,come to about $4 billion,or the equivalent of about 15 per cent annually,according to calculations compiled for The New York Times.

These early returns are by no means a full accounting of the huge financial rescue undertaken by the federal government last year to stabilize teetering banks and other companies. The government still faces potentially huge long-term losses from its bailouts of the insurance giant AIG,the mortgage finance companies Fannie Mae and Freddie Mac,and the automakers GM and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages.

But the mere hint of bailout profits for the nearly year-old TARP has been received as a welcome surprise. It has also spurred hopes that the government could soon get out of the banking business. Profits were hardly high on the list of government priorities last October,when a financial panic was in full swing and the Treasury Department started spending roughly $240 billion to buy preferred shares from hundreds of banks that were facing huge potential losses from troubled mortgages. NYT

No need for 2nd stimulus

WASHINGTON: The US economy does not need a second fiscal stimulus package,instead the government should cut spending over the next two years,according to a survey of business economists released on Monday. Most economists in the National Association for Business Economics (NABE) semi-annual poll were concerned about the outlook for the US government budget. Also,they doubted health-care reforms proposed by the Obama administration would lower costs while increasing access and maintaining quality. Reuters