Economics: Bad Asset Purchase Program Turning a Profit

The Treasury Department's equity investment in bad mortgage assets — a federal program that combined capital from the government and private asset managers — has grown 27 percent since it was created in 2009, according to new data released Monday.

At the time, critics questioned the wisdom of turning the federal government into a vulture investor. The Nobel Prize winner Joseph Stiglitz called the program a robbery of the American people.

Now the new data from the Treasury Department shows that investors have drawn $5.2 billion in equity from the department for their purchase of bad mortgage assets. That money has produced $1.1 billion in unrealized gains, bringing the government's investment to roughly $6.3 billion.

When you include $314 million in equity gains already doled out to the Treasury Department, the government's return jumps to $1.4 billion, a 27 percent increase.

For more, see Bad Asset Purchase Program Turning a Profit by Ben Protess, January 24, 2011 at NYTimes.com's Dealb%k.