Market Overview

This Day In Market History: The $700B TARP Bailout

Share:
This Day In Market History: The $700B TARP Bailout

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened

On this day 11 years ago, U.S. President George W. Bush signed the $700 billion Troubled Asset Relief Program bailout into law.

Where The Market Was

The Dow closed at 10,325.38 and the S&P 500 traded at 1,099.23.

What Else Was Going On In The World

In 2008, the largest U.S. bank, Citigroup Inc (NYSE: C), reported fourth-quarter losses of $9.83 billion due to the collapse of the subprime mortgage market. Illinois governor Rod Blagojevich was arrested on charges of corruption, conspiracy to commit mail and wire fraud and solicitation of bribery. A gallon of gasoline cost $3.39.

Big Bank Bailout

At the time, the fear in Washington was that the bursting of the subprime mortgage bubble would result in the collapse of the U.S. banking system. The TARP program set aside $700 billion in capital that banks could use to keep the financial system liquid.

At the time, TARP did nothing to ease market fears. From Oct. 2 to Oct. 10, 2008, the S&P 500 crashed 19.3%.

Only about $441 billion of the $700 billion was ever deployed. Despite harsh criticism from fiscal conservatives at the time, the TARP bailouts were ultimately a huge success. In addition to preventing the collapse of the U.S. economy, the TARP bailouts and separate crisis bailouts of Federal National Mortgage Association (OTC: FNMA) and Federal Home Loan Mortgage Corp (OTC: FMCC) have generated a net profit of $97.1 billion for U.S. taxpayers.

Related Links:

This Day In Market History: Buffett's $3B GE Bet

Trump's Bailout For Farmers Caught In The Trade War: What You Need To Know

Posted-In: this day in market historyEducation Top Stories Markets General Best of Benzinga

 

Related Articles (C + FMCC)

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial
Book A Demo
Learn How You Can Succeed In The Market With Benzinga Pro

Fastest Market News

Real-Time News Alerts

Customizable News Filters

Book A Demo

'Fast Money Halftime Report' Traders Share Their Thoughts On Royal Dutch Shell, Delta And More

A Peek Into The Markets: US Stock Futures Up Ahead Of Economic Reports