Yeah, right – the government is making a “profit” on its “investments” in insolvent banks. That’s what the New York Times and government puppet,  ABC News would have us believe. Rolfe points out that the reality is that for the American people to actually make a profit on these government handouts, er…  bailouts, you have to ignore more than half the total funding we provided:

On a risk-adjusted basis, we’re way in the hole. The long-term costs/consequences of explicit government guarantees against failure –which is what these banks now have — is many, many times larger than any profits earned on TARP warrants.

Yves offers similar insight that this “profit” is bogus.  Face it, this is why the stocks of the bailed-out financials have been manipulated, with incredible volumes, by the bailed-out financial “mafia” to such irrationally high levels lately.  And make no mistake, this isn’t short covering as argued by FT…it’s plain ole (illegal) manipulation.