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Good news!  We’re making money so far on our bank bailouts:

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

This is good news, but I’m not sure it’s worth blaring all over the front page just yet.  Here’s the fourth paragraph of the story:

The government still faces potentially huge long-term losses from its bailouts of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages.

The money that’s being paid back first comes from the very strongest banks — mostly the ones that really didn’t need capital injections in the first place.  They were always the ones who were likely to cash out first, cash out completely, and therefore provide the government with its highest rate of return.  In other words, looking at the results of TARP so far is as distorted as if you tried to get a sense of how an election was going by polling only your own guy’s strongest precincts.  You’d just be kidding yourself.

TARP won’t end up costing $700 billion.  But these early paybacks account for only about 10% of the total and really don’t provide a very good sense of how the program as a whole is likely to turn out.  It’s more like an absolute upper bound.

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

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As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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