The Troubled Asset Relief Program, maybe one of the federal government’s most hated initiatives, doesn’t deserve such scorn, Cramer said Thursday. The portion of TARP that comprised the bank bailouts is in fact very close to breaking even. And the Treasury Department thinks the American taxpayer will make $20 billion profits when all is said and done.
With Fifth Third Bancorp paying back $3.4 billion in TARP funds on Wednesday, the Treasury is now just $2 billion away from breaking even on the $245 billion it doled out to ailing banks. Only five banks still owe the government more than $1 billion, SunTrust included—and Cramer wants viewers ready to buy the company’s secondary offering, which it will use to raise funds to repay TARP, when it happens. But there’s still plenty more money expected to come in, hence the Treasury’s profit predictions.
TARP worked, Cramer said. So “at what point do we stop thinking of this as a bailout and start recognizing that it was a necessary rescue of a critical industry that ended up working better than anyone could have imagined?” he asked.
There are some TARP assets still remaining, though, like 74 percent of Ally, or the old GMAC, third of General Motors’ shares and 92 percent of American International Group . What should taxpayers—and investors—expect next? To answer that question, Cramer reached out to Treasury’s Assistant Secretary for Financial Stability Tim Massad. Watch the full interview here.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com