Being tarped is such a bad thing that banks are racing to repay government investments to escape restrictions on their compensation and business practices.
Citigroup and Wells Fargo are the latest firms to announce plans to repay the government $20 billion and $25 billion respectively.
The government may make $14 billion on its Citigroup investment, which if realized soon would work out to approximately a 30% return for a year - which is a rate of return similar to what LBO investors and venture capital firms achieve.
As I have previously mentioned, the government's bailout of the banking sector was fundamentally a different exercise than its bailout of the auto industry. One bottom line measure of that difference is the government is making money on its bank bailout, while it is deeply in the red on its bailout of GM and Chrysler.
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