TARP: Federal Bailout, or Sweet Deal for the Feds?

" Was last fall’s Troubled Asset Relief Program (TARP) a bailout as the Congress and administration insist endlessly? In a recent interview, Sandler O’Neill’s Jimmy Dunne described the TARP as “more of an income-producing hedge for government … than a bailout.” It’s an intriguing argument, and one borne by the numbers, too. By my calculation, the Federal government’s annualized return on investment approaches a weighted average 18% for the 10 banks approved to repurchase their government-owned preferred stock and warrants, including dividends paid through this June. Results are summarized in the accompanying table."