More than 700 U.S. banks, insurers and automakers applied to the U.S. for cash from the Treasury Department\u2019s $700 billion Troubled Asset Relief Program. Borrowers including Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. have returned more than $180 billion in bailout funds, according to Bloomberg data, and the Obama administration has proposed a levy on financial firms to recoup the government\u2019s costs.<\/p>\n
Special Inspector General Neil Barofsky, the government watchdog monitoring the bailout, said last month that the entire TARP program, including the rescue of American International Group Inc., General Motors Co. and Chrysler Group LLC, will cost taxpayers less than previously predicted. An earlier Barofksy report to Congress said the final cost could be \u201csubstantial.\u201d<\/p>\n
Paulson in 2008 injected capital into banks in exchange for preferred shares paying 5 percent and warrants to buy common stock. He appeared on stage at a meeting of the chamber of commerce alongside Buffett, whose Berkshire Hathaway Inc. is based in Omaha. Buffett asked questions of Paulson about the events surrounding the government bailouts as the two promoted Paulson\u2019s book, \u201cOn the Brink.\u201d<\/a><\/p>\n \u201cI think you\u2019re right,\u201d Buffett said when Paulson said the U.S. would recoup its investment. Buffett declined to comment after the event today.<\/p>\n President Barack Obama last month proposed a fee on as many as 50 financial companies to recover losses from TARP. The levy would apply to firms with more than $50 billion in assets, including Wells Fargo and Goldman Sachs Group Inc., two companies that Berkshire has investments in. Buffett has said he opposes the administration\u2019s plan.<\/p>\n Buffett\u2019s Suggestion<\/p>\n Paulson wrote in the book, which was published last week, that a proposal from Buffett helped him hone the bailout to make it palatable to investors. During a private phone call late on Oct. 11, 2008, Buffett suggested charging banks 5 percent or 6 percent on the U.S. investments and raising the rate later, Paulson wrote. The Treasury team had been considering 7 percent or 8 percent.<\/p>\n \u201cI was convinced Warren\u2019s was the best way to make the capital purchase program attractive to banks while giving them an incentive to pay back the government,\u201d Paulson wrote. \u201cWarren had a vested interest in this idea. But the truth was I was looking for an approach just like his: an investor-friendly plan that would protect the taxpayer\u201d and encourage private investment.<\/p>\n Lenders have bought back $121.9 billion in preferred stock from the TARP\u2019s Capital Purchase Program, with almost $83 billion still outstanding, according to a Feb. 5 transaction report. The agency has collected about $4.03 billion from the sale of warrants in about 35 banks.<\/p>\n Missed Payments<\/p>\n The $2.33 billion government bailout of CIT Group Inc., the commercial lender that emerged from bankruptcy in December, has been wiped out after the reorganization. American International Group Inc., with a bailout from TARP and other government efforts valued at $182.3 billion, missed dividend payments due the U.S. More than 50 other financial institutions didn\u2019t pay dividends in November, according a report from Treasury.<\/p>\n Buffett\u2019s Berkshire is the biggest investor in Goldman Sachs and Wells Fargo. His $5 billion investment in New York- based Goldman Sachs came on September 23, 2008, and Paulson wrote that that injection by Berkshire removed one of his worries.<\/p>\n World\u2019s Most Credible Investor<\/p>\n \u201cThey\u2019d found the most credible investor in the world, Warren Buffett,\u201d Paulson wrote of Goldman Sachs, the firm he ran as chief executive officer and chairman until his appointment to George W. Bush\u2019s cabinet in 2006.<\/p>\n Berkshire earns a 10 percent dividend on the Goldman Sachs preferred shares and the right to buy $5 billion of the bank\u2019s stock at $115 a share. The shares closed yesterday at $151.10 in New York.<\/p>\n Buffett, according to Paulson\u2019s account, told CNBC the day after his Goldman Sachs purchase that he wouldn\u2019t have made the investment if he didn\u2019t think Treasury\u2019s $700 billion Troubled Asset Relief Program would pass Congress. TARP, originally devised as a way for the government to relieve banks of their bad debts, later became the capital purchase plan that Buffett helped shape.<\/p>\n –With assistance from Peter Eichenbaum, Linda Shen, Michael J. Moore and Hugh Son in New York. Editors: Erik Holm, Gregory Mott<\/p>\n Share Investor Links<\/span><\/a><\/a><\/p>\n Share Investor Blog<\/a> – Stockmarket & Business commentary Recommended Amazon Reading<\/span><\/p>\n
Share Investor New Zealand Business News<\/a>– Get more business news
Discuss this topic @ Share Investor Forum<\/a> – Register<\/strong><\/strong><\/a> free
Share Investor’s Daily Forex Updates<\/a><\/p>\n
![\"The](\"http:\/\/ecx.images-amazon.com\/images\/I\/41rcIrKhYiL._SL75_.jpg\")
<\/a><\/td>\n![\"The](\"http:\/\/ecx.images-amazon.com\/images\/I\/51hqcX1xLtL._SL75_.jpg\")
<\/a><\/td>\n