Business

US beats Street

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As an investor, Uncle Sam beat Wall Street at its own game by bailing it out — earning an 8.2 percent return on the $309 billion of taxpayer money it used beginning in October 2008 to stabilize the financial markets.

That’s a better return than 30-year Treasury bonds — and quite an accomplishment, as many thought at the bailout’s outset that taxpayers would lose hundreds of billions of dollars.

The fat return amounts to a profit of $25.2 billion, according to Bloomberg, which first reported on the TARP returns.

In one of the more controversial bailouts — that of insurance giant American International Group — the government scored an $11 billion profit, or a 23 percent return on its $47.5 billion bailout loan. The loan’s cash went out AIG’s back door almost immediately to cover insurance policies held by investment banks such as Goldman Sachs.

Goldman Sachs itself also borrowed $10 billion from the government, but has paid it back for a 14 percent gain to the Treasury of $1.4 billion. Citigroup is still paying back its $45 billion bailout, but has provided an 18 percent gain thus far, or about $8.2 billion.

The Treasury quietly reported its portfolio gains two weeks ago.

According to Bloomberg, which crunched the report’s results, the returns were also better than high-yield savings accounts, money market funds and certificates of deposit.

The return on the $309 billion bailout is enough to fund the Securities and Exchange Commission for the next two decades, Bloomberg said.

Other TARP loans of about $80 billion went to Detroit automakers General Motors and Chrysler. They are not expected to perform as well as the Wall Street bailouts.

Carmaker loans are expected to lose about $17 billion, the Treasury said.