Profits to the government from the bailout

Discussion in 'News / Current Events' started by Crabtownboy, Nov 23, 2010.

  1. Crabtownboy

    Crabtownboy
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    Perhaps, just perhaps all the nay, doom and gloom people are wrong and the government will actually end up profiting from the bailout and thus so will the tax payers.

     
  2. targus

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    "Two years later TARP’s bank and insurance investments have made money, and about two-thirds of the funds have been paid back."

    Only Crabby would believe that getting two-thirds of your investment back is a profit. :rolleyes:

    Hey, Crabby, ever hear the one about counting your chickens? :smilewinkgrin:
     
  3. Crabtownboy

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    I guess you did not read the quotes. Let me post part of one again ... and please read it.

    You seem to not understand investing. Let's say I buy stock from 7 companies. To date I have sold the stock from 4 of those at a profit. I still have holdings in 3 companies. Now, have I made a profit? Yes on the stock I have sold ... it is a real profit.

    I may show a paper loss or a paper gain on the 3 I still own. That will be turned into a real loss or profit when I sell that stock. It is possible that I could sell those 3 at a loss and still show an overall gain.

    That is probably what will happen with the government. And I will give both the Bush and the Obama administration credit.

    I hope the government does show a profit. It would be good for the country. Do you hope the government shows a loss?

     
  4. targus

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    What "probably will happen" is not a profit until it happens.
     
  5. Crabtownboy

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    So far the gov. is showing profits. That is a hopeful sign that more profits are to follow. When you find a good investment strategy, stick with it. Sure there will be some losses, but the profits should more than erase the loss.

    Remember, "Cut your losses short and let your profits run."

    I see you totally neglect the real news ... again.
     
  6. targus

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    http://www.nytimes.com/2010/10/26/business/26tarp.html

    "The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program. "

    So in reality - Crabby's future profits from the bailout are the result of changes in the valuation of investments.

    IOW - the government is again cooking the books.


    "The Treasury will include more information about A.I.G. when it issues its own audited financial statement in November. Because those numbers must pass an auditor’s scrutiny, the loss it reports is likely to grow once again, to more than $5 billion."

    Even after cooking the books the Treasury is still predicting a loss - not a profit.

    "The Treasury declined. It sent back a letter saying its methodology for calculating losses had not really changed, although its assumptions had. For instance, it based the values of several future transactions on the current price of A.I.G.’s common stock."

    And even then it is based on counting their chickens before they hatch.
     
  7. rbell

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    So Crabby, wouldn't the best thing be for government to take over all business?

    After all, they know best.
     
  8. Crabtownboy

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    No ... and I have never said they know best nor have I ever said they have followed the best policy. But there are times when Capitalism gets out of kilter and steps need to be taken ... 1929 taught us that.
     
  9. sag38

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    And you actually believe that the goverment could have prevented this from happening? I feel sorry for you. I really do.
     
  10. rbell

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    Did 1930's Germany teach you that as well?
     
  11. Crabtownboy

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    Not sure how your question fits this thread. But, yes it does or should teach us something. Conditions were set up for Hitler to take over through the very unjust Treaty of Versailles where European countries took revenge on Germany. The US lead treaty ending WW II was much more intelligent and ended up making Germany a democracy and an ally of the US. The moral of the 1930's is revenge only breeds hatred and the desire of revenge in return ... and there is nothing Christian in that.
     
  12. Don

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    You forgot to include original investment. If I originally invested at, say, $100, while the stocks were at $1 per share; and now I sell back 2/3 of those shares at $1.25, it looks like I'm making .25 profit on each of those shares...but I've only received a return of $82.50 on my original investment of $100. That's still known as a "loss."
     
  13. Crabtownboy

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    You made a profit on the shares you sold. You are ahead on those you still hold ... a paper profit. If those shares go to $2.00 a share you will make a nice profit. If they fall to 0 you will not and will realize a loss.
     
  14. targus

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    Everyone here knows what a profit is - except for you.

    Send me $100.

    I'll pay you back $30 and an IOU for $90.

    You can tell everyone that you made a big profit.

    But good luck getting the rest of your money.
     
  15. Don

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    CTB - you've made a profit only on individual shares. If you try to run your business on that principle, you'll go bankrupt really, really fast.

    Oh, wait -- what was our country's debt amount again?
     
  16. rbell

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    My bad, I forgot about your critical thinking skills disabilities.

    I was referring to the fact that fascism has time and again been demonstrated to be a terrible system upon which to build a society.
     
  17. Don

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    Nice example of a "paper profit."
     

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