For Foreign Eyes Only

I read in the Financial Times of London last week that the " Federal Reserve made a record contribution of $79.3 B to the US Treasury from investments in its large portfolio of mortgage bonds."

Today I read in the same foreign publication that the US Treasury is forecasting (on a very conservative basis) a profit of almost $24B from TARP and called it "a positive outcome for despised bail-outs that were once estimated to cost hundreds of billions of dollars."

I read the NYT and WSJ, both days, and saw nothing about this positive economic news. I guess good news about banks doesn't sell newspapers, at least in this country. I also didn't hear about it on Morning Joe, CNN, Fox, etc.

Despite what Neil Barofsky and Elizabeth Warren have said, and of course their views appear in our press regularly, the TARP not only saved this country from economic disaster, but made a tidy profit for the taxpayer to boot.

And as to moral hazard concerns , tell that to the shareholders of Lehman, Baer Stearns, WaMu, Merril Lynch, Wachovia, AIG and others, and all their former executives who lost their jobs and most of their fortunes. Even survivors like Citi saw the value of their stock go from $50 to $1( now back up to $4) and Bank of America's stock plunged as well, and their Chairman lost his job. I think there is plenty of moral hazard arising from this crisis.

As to "too big to fail", recall the words of Paul Krugman in his column about Canada. He noted that Canada was not suffering the same degree of financial distress and observed that "Canada has only 5 banks and they are all too big to fail", so that alone was not the cause of the financial crisis.

Why can't our press tell the American people about all this?

Eric