The bailout final product


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Bailout Explained and simplyfied. (all of the information was compiled from many different information websites, as well as illustrations. I claim no ownership or rights to the art or information in this slide. I compiled the info and symplified it for a college presentation.

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The bailout final product

  1. 1.
  2. 2.
  3. 3. THE BAILOUT<br />Uncle Sam ToTheRescue<br />
  4. 4. INCORRECT!<br />
  5. 5. TaxPayerstotheRescue<br />
  6. 6. Bailout<br /><ul><li>The bailout is really two separate bills:
  7. 7. The Housing and Economic Recovery Act
  8. 8. Emergency Economic Stabilization Act </li></li></ul><li>Bailout<br /><ul><li>These Acts created Umbrella programs and other programs were enabled under these Umbrella programs. </li></li></ul><li>Umbrella Programs<br /><ul><li>The Housing and Economic Recovery Act
  9. 9. Emergency Economic Stabilization Act created the Trouble Asset Program TARP</li></li></ul><li>The Housing and Economic Recovery Act <br /><ul><li>Broad bill that launched a foreclosure relief program. This program enacted
  10. 10. The Preferred Stock Investments Program
  11. 11. Fannie Mae and Freddie Mac Bailout</li></li></ul><li>What Did It Do?<br /><ul><li>Essentially, Fannie Mae and Freddie Mac were nationalized: placed under the Conservatorship of the Federal Housing Finance Agency.
  12. 12. Under the terms of the rescue, the Treasury has invested billions to cover the companies' losses.</li></li></ul><li>Trouble Asset Relief Program<br /><ul><li>TARP consists of several programs that attempt to stabilize the economy by different means. Each program is directed to address a specific problem.
  13. 13. Currently, there are 13 programs, some of which are already being rolled back and some of which are relatively new in TARP. </li></li></ul><li>TheHousingEconomicRecoveryAct<br />and TARP at Work<br />
  14. 14. TARP’S PROGRAMS<br /><ul><li>Capital Purchase Program
  15. 15. Automotive Industry Financing Program
  16. 16. Systematically Failing Institutions Program
  17. 17. Making Home Affordable
  18. 18. Targeted Invested Program
  19. 19. Public Private Investment Program</li></li></ul><li>TARP’S PROGRAMS<br /><ul><li>Small Business Lending Program
  20. 20. Term Asset Backed Securities Loan Facility
  21. 21. Auto Supplier Program
  22. 22. Housing finance Agency Innovation Fund
  23. 23. Community Development Capital
  24. 24. Capital Assistance Program (CAP)</li></li></ul><li>Most Talked About, Controversial and Expensive Programs<br /><ul><li>Capital Purchase Program
  25. 25. Automotive Industry Financing Program
  26. 26. Targeted Investment Program
  27. 27. Systematically Significant Failing Institutions</li></li></ul><li>Capital Purchase Program<br /><ul><li>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.
  28. 28. These measures have prevented a system-wide collapse. </li></li></ul><li>CPP Decoded<br /><ul><li>Through the CPP, Treasury is providing capital to viable banks through the purchase of banks’ preferredshares. In return for its investment, the Treasury will receive dividend payments and warrants.</li></li></ul><li>Automotive Industry Financing Program<br /><ul><li>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.</li></li></ul><li>Automotive Industry Financing Program<br /><ul><li>Reasoning behind AIFP
  29. 29. To Big To Fail
  30. 30. Such an event would pose a systemic risk to the country’s financial system. </li></li></ul><li>What Did It Do?<br /><ul><li>Treasury’s loans to the automobile industry forged a path for these companies to go through orderly restructurings and achieve viability. </li></li></ul><li>Targeted Invested Program<br /><ul><li>TIP provided financial assistance for struggling companies whose failure could damage the financial system.
  31. 31. Financial Assistance in the form of Investments</li></li></ul><li>Systematically Significant Failing Institutions<br /><ul><li>Was a programs specifically created and used to save AIG.</li></li></ul><li>Check Please…<br />How Much did saving America’s collapsing economy cost?<br />
  32. 32. BAILOUT COST<br /><ul><li>The US Treasury set up two funds amounting to 1.1 Trillion Dollars
  33. 33. $400 Billion fund for the Economic Recovery Act
  34. 34. $700 Billion fund for the Trouble Asset Relief Program.
  35. 35. $542.08 billion has actually been spent, invested, or loaned.</li></li></ul><li>Who Got What?<br /><ul><li>Banks and Other Financial Institutions</li></ul> $244.9 Billion 45.17%<br /><ul><li>Fannie and Freddie</li></ul> 125.9 BILLION 23.22%<br /><ul><li>Auto Industry</li></ul> 81.35 BILLION 15%<br /><ul><li>AIG </li></ul> 69.87 BILLION 12.88%<br /><ul><li>Toxic Asset Purchase</li></ul> 19.16 Billion 3.53%<br /><ul><li>Foreclosure Relief</li></ul> 90 million 0.016%<br />
  36. 36.
  37. 37. SHOW ME THE MONEY!!<br />Some of the Recipients of the Bailout Money<br />
  38. 38. Where Did The Money Go?<br /><ul><li>In total there are about 834 companies who did or will benefit from Bailout Money</li></li></ul><li>American International Group Inc.<br />$69.87 Billion<br />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)<br />
  39. 39. Citigroup<br />45 Billion<br />
  40. 40. JPMORGAN CHASE<br />$25 Billion<br />
  41. 41. American Express <br />FinancialServices<br />3.4 Billion<br />
  42. 42. BAILOUT MONEY IN YOURNEIGHBORHOOD<br />Jersey Bailout<br />
  43. 43. Lakeland Bank<br />$59 Million<br />
  44. 44. Valley National Bank<br />300.0 Million<br />
  45. 45. Strings Attached?<br /><ul><li>American Recovery and Reinvestment Act of 2009 created or enhanced restrictions on recipients of TARP money such as
  46. 46. Limitations on the financial risk they are allowed to take
  47. 47. Limitations on how much money they paid in bonuses to top executives
  48. 48. The bailout money has to eventually be repaid. </li></li></ul><li>Paid Back<br /><ul><li>Wells Fargo</li></ul>$25 billion owns $0.00<br /><ul><li>Chrysler Financial Services</li></ul>Paid $ 1.5 billion owns $0.00<br />
  49. 49. No onereallyknowsexacly, ifthegovermentisgoing<br />Tomakemoneyor lose moneythese<br />Invesments<br />Only time willtell.<br />