The bailout final product

THE BAILOUT

Uncle Sam To The Rescue

INCORRECT!

Tax Payers to the Rescue

Bailout

The bailout is really two separate bills:

The Housing and Economic Recovery Act

Emergency Economic

Stabilization Act

Bailout

These Acts created Umbrella

programs and other programs were

enabled under these Umbrella

programs.

Umbrella Programs

The Housing and Economic Recovery Act

Emergency Economic Stabilization Act

created the Trouble Asset Program TARP

The Housing and Economic Recovery Act

Broad bill that launched a foreclosure

relief program. This program enacted

The Preferred Stock Investments

Program

Fannie Mae and Freddie Mac

Bailout

What Did It Do?

Essentially, Fannie Mae and Freddie Mac were nationalized: placed under the Conservatorship of the Federal Housing Finance Agency.

Under the terms of the rescue, the Treasury has invested billions to cover the companies' losses.

Trouble Asset Relief Program

TARP consists of several programs that attempt to stabilize the economy by different means. Each program is directed to address a specific problem.

Currently, there are 13 programs, some of which are already being rolled back and some of which are relatively new in TARP.

The Housing Economic Recovery Act

and TARP at Work

TARP’S PROGRAMS

Capital Purchase Program

Automotive Industry Financing Program

Systematically Failing Institutions

Program

Making Home Affordable

Targeted Invested Program

Public Private Investment Program

TARP’S PROGRAMS

Small Business Lending Program

Term Asset Backed Securities Loan Facility

Auto Supplier Program

Housing finance Agency Innovation Fund

Community Development Capital

Capital Assistance Program (CAP)

Most Talked About, Controversial and Expensive Programs

Capital Purchase Program

Automotive Industry Financing Program

Targeted Investment Program

Systematically Significant Failing

Institutions

Capital Purchase Program

The CPP is a voluntary program whereby

Treasury has made a long-term investment

in financial institutions of all sizes in order

to stabilize the financial sector, enabling the

flow of credit to businesses and consumers.

These measures have prevented a system-

wide collapse. 

CPP Decoded

Through the CPP, Treasury is providing

capital to viable banks through the

purchase of banks’ preferred shares.

In return for its investment, the

Treasury will receive dividend

payments and warrants.

Automotive Industry Financing Program

Provided loans or equity

investments to General Motors,

GMAC, Chrysler, and Chrysler

Financial in order to avoid a

disorderly bankruptcy of one or more

auto companies.

Automotive Industry Financing Program

Reasoning behind AIFP

To Big To Fail

Such an event would pose a systemic risk to the country’s financial system. 

What Did It Do?

Treasury’s loans to the automobile

industry forged a path for these

companies to go through orderly

restructurings and achieve viability. 

Targeted Invested Program

TIP provided financial assistance for

struggling companies whose failure

could damage the financial system.

Financial Assistance in the form of

Investments

Systematically Significant Failing Institutions

Was a programs specifically created

and used to save AIG.

Check Please…

How Much did saving America’s collapsing

economy cost?

BAILOUT COST

The US Treasury set up two funds amounting to

1.1 Trillion Dollars

$400 Billion fund for the Economic Recovery Act

$700 Billion fund for the Trouble Asset Relief

Program.

$542.08 billion has actually been spent,

invested, or loaned.

Who Got What? Banks and Other Financial Institutions

$244.9 Billion 45.17% Fannie and Freddie

125.9 BILLION 23.22% Auto Industry

81.35 BILLION 15% AIG

69.87 BILLION 12.88% Toxic Asset Purchase

19.16 Billion 3.53% Foreclosure Relief

90 million 0.016%

Banks and Other Fi-nancial Institu-tions

Fannie and Freddie

Auto Companies

AIG

Toxic Asset Purchase

Forclosure Relief

Everyone Gets a Slice

SHOW ME THE MONEY!!

Some of the Recipients of the Bailout Money

Where Did The Money Go?

In total there are about 834

companies who did or will benefit

from Bailout Money

American International Group Inc.

$69.87 Billion

The U.S. government owns about 80% of AIG as a result of its injection of capital to save the company from

collapse in 2008 (Wall Street Journal)

Citigroup

45 Billion

JPMORGAN CHASE $25 Billion

American Express Financial Services

3.4 Billion

BAILOUT MONEY IN YOUR

NEIGHBORHOOD

Jersey Bailout

Lakeland Bank

$59 Million

Valley National Bank

300.0 Million

Strings Attached?

American Recovery and Reinvestment Act of 2009 created or enhanced restrictions on recipients of TARP money such as

Limitations on the financial risk they are allowed to take

Limitations on how much money they paid in bonuses to top executives

The bailout money has to eventually be repaid.

Paid Back

Wells Fargo$25 billion owns $0.00

Chrysler Financial ServicesPaid $ 1.5 billion owns $0.00

No one really knows exacly, if the

goverment is goingTo make money or lose money these

InvesmentsOnly time will tell.