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Don’t look now, but the bank bailout is starting to turn a profit.

The Treasury Department announced Wednesday that the money it gave to banks during the financial crisis has been paid back, and then some.

The bank bailout — part of the Troubled Asset Relief Program — is now $6 billion in the black, a profit that might ultimately rise to $20 billion, according to the Treasury.

And that’s nice. But if you look at the whole program, there are still some trouble spots, and not everyone is happy.

"We still have more work to do repairing the damage caused by the crisis and strengthening the recovery, but today is an important milestone in our efforts to recover taxpayer dollars as we continue winding down TARP," Treasury Secretary Tim Geithner said in a statement.

For a long time, TARP was the albatross around Treasury’s neck. It authorized the department to spend up to $700 billion to stabilize financial markets through the purchase of "troubled assets."

And that’s just what Treasury did, spending a total of $432 billion dollars to help banks, the domestic auto industry, AIG (AIG, Fortune 500), and fund grants aimed at avoiding foreclosures.

And while some of the biggest banks are now flourishing, critics are slamming Treasury for falling down on part of its broader mission — helping Main Street.

"These Main Street-oriented goals were not, as the Treasury Department is now suggesting, mere window dressing that needed only to be taken ‘into account,’ " Neil Barofsky, the program’s former special inspector general, wrote in a New York Times op-ed.

Barofsky specifically laments the attention paid to the big banks, while mortgage modifications were all but ignored. A program — the Home Affordable Modification Program — was put in place in February 2009, but has not been particularly successful.

"That program has been a colossal failure," Barofsky wrote. "As the program flounders, foreclosures continue to mount, with 8 million to 13 million filings forecast over the program’s lifetime."

On Tuesday, the Republican-controlled House voted to kill the program.

And Treasury acknowledges the housing market is still difficult.

"Housing is an area where there is still much work to be done," Acting Assistant Secretary Timothy Massad told Congress on Wednesday. "It should be remembered that the forces that created this housing crisis had been building for nearly a decade."

There is also the issue of cost. According to the latest estimate of the nonpartisan Congressional Budget Office, TARP — the whole program — will ultimately cost taxpayers $19 billion, mostly due to losses from assistance to AIG, the auto industry and HAMP.

Still, that number is far lower than anticipated by most analysts — including CBO, which initially estimated that TARP would lose hundreds of billions of dollars. Treasury has displayed a stellar track record thus far in recouping taxpayer funds, but there are a few problem areas.

CBO estimates that the roughly $80 billion auto bailout will end up costing taxpayers $14 billion. And HAMP, which is a grants program and was never expected to return a profit to taxpayers, will eventually cost $13 billion. 

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Regulators on Friday shut down a small bank in Illinois, boosting to 26 the number of U.S. bank failures this year after 157 succumbed in 2010 to the sputtering economy and piles of soured loans.

The Federal Deposit Insurance Corp. seized Bank of Commerce, with one office in Wood Dale, Ill., $163.1 million in assets and $161.4 million in deposits. Advantage National Bank Group, based in Elk Grove Village, Ill., agreed to assume the assets and deposits of the failed bank.

In addition, the FDIC and Advantage National Bank Group agreed to share losses on $145.7 million of Bank of Commerce’s loans and other assets.

The failure of Bank of Commerce is expected to cost the deposit insurance fund $41.9 million.

Illinois has been one of the hardest-hit states for bank failures. Sixteen banks were shuttered in the state last year. The shutdown of Bank of Commerce was the third bank failure in Illinois this year.

California, Florida and Georgia also have seen large numbers of bank failures.

The 157 bank closures last year topped the 140 shuttered in 2009. It was the most in a year since the savings-and-loan crisis two decades ago.

The FDIC has said that 2010 likely would be the peak for bank failures. Already this year the pace of closures has slowed: By this time last year, regulators had closed 41 banks business cards design.

The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

The growing number of bank failures has sapped billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.

The number of banks on the FDIC’s confidential “problem” list rose to 884 in the final quarter of last year from 860 three months earlier. The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis.

The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.

Depositors’ money _ insured up to $250,000 per account _ is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.

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Bank of England policy makers voted 6-3 to keep interest rates on hold this month and saw “merit in waiting” to assess the impact of rising oil prices on inflation, which they forecast may exceed 5 percent.

Andrew Sentance maintained his call for an increase in the benchmark interest rate to 1 percent from a record low of 0.5 percent, while Martin Weale and Spencer Dale wanted a move to 0.75 percent. The remaining six members, including Governor Mervyn King, voted to maintain the current level. Adam Posen kept up his push to expand stimulus with further bond purchases.

“It was not yet clear that the weakness in output growth seen in the latter part of 2010 would prove temporary,” according to the minutes of the March 10 decision published today in London. “The uncertainty created by both developments in the oil market and the recent indicators of household spending and confidence meant there remained merit in waiting to see how those factors evolved before altering the stance of monetary policy.”

Among the majority of members who voted to hold the rate, there were “differences of view” on the “risks associated with an increase in inflation expectations materializing.”

“Some thought that this risk remained limited given that the near term outlook for inflation could be explained by reference to changes in energy and other commodity prices, VAT and the sterling exchange rate,” the minutes said. “Others thought that this risk had risen, given further upward revisions to the near term outlook for inflation, and that the case for an increase in bank rate had strengthened in recent months.”

Significant Risk

The pound fell almost 0.4 percent today, and traded at $1.6302 as of 9.54 a.m. in London. Bonds rose, with the yield on the 10-year gilt slipping 3 basis points to 3.57 percent.

“If they really want to look through all the volatility they may decide to wait for more activity in the second quarter before moving, and that makes August more likely,” said David Tinsley, an economist at National Australia Bank in London and a former central bank official. “We do rule out, more or less, an April move but a May movement is still on the cards.”

Britain’s inflation rate rose to 4.4 percent in February, more than twice the central bank’s target, and the Monetary Policy Committee sees a “significant risk” it may increase to above 5 percent in the near term. As policy makers try to balance price risks against the threat to the recovery from the government’s budget squeeze, they also have to weigh the potential impact of the March 11 earthquake in Japan and the Middle East turmoil on the global economy and commodity prices.

Oil Prices

Crude oil prices have risen almost 40 percent in the last six months on concern that turmoil in Libya and other nations may curtail shipments from the Middle East. Corn has gained 30 percent in that period.

For the three members voting for an interest-rate increase, the “near term outlook for inflation had deteriorated further,” adding to “the risk of the perception arising that the committee was more prepared to tolerate persistent deviations of inflation from the target than in the past.”

On the bond plan, the MPC voted 8-1 to keep it at 200 billion pounds ($326 billion). Adam Posen kept up his vote to expand it to 250 billion pounds. Still, he noted risks to inflation, according to the minutes.

He “recognized the risk that a sustained upward trend in medium term inflation expectations or global price pressures could outweigh the forces pushing down on inflation, but did not see this risk as material,” the minutes said.

BOE Debate

Sentance said in a speech yesterday that U.K. policy makers are facing decisions that are “much less straightforward than they appeared to be before the financial crisis.”

King said on March 1 that increasing the key rate to make a gesture in the fight against inflation would be “self- defeating.”

“I don’t believe we’ve yet seen significant evidence of a pickup in medium-term inflation expectations,” he said. Still, it’s “reasonable to believe that if we continue to experience above-target inflation for long enough there could be an upside risk to inflation expectations.”

The economy shrank 0.6 percent in the fourth quarter and the recovery is at risk as Chancellor of the Exchequer implements a spending squeeze to reduce the record budget deficit. Osborne will announce his budget for the fiscal year through March 2012 at 12:30 p.m. today.

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New Zealand’s economy will grow 1 percent this year before earthquake rebuilding boosts the expansion to 4 percent in 2012, the International Monetary Fund said.

The damage from the September and February temblors is estimated at NZ$15 billion ($11 billion), or 7.5 percent of gross domestic product, the Washington-based IMF said as part of an annual review of the country’s economy. The Rugby World Cup later this year and higher trade will help propel growth, it said.

The Reserve Bank of New Zealand’s half percentage-point cut in the official cash rate to 2.5 percent this month was appropriate, the fund said. The rate could be lifted “relatively quickly” should inflation pressures mount because a shift in recent years to floating-rate mortgages makes consumers more sensitive to higher interest rates, it said.

“Monetary policy will need to be tightened when it becomes clear that the recovery is under way,” the IMF said in the statement posted on its website. “The RBNZ needs to guard against medium-term inflation expectations becoming anchored at too high a level.”

The quakes destroyed homes and businesses in Christchurch, the nation’s second-biggest city, and surrounding South Island regions that make up about 15 percent of the national economy. Prime Minister John Key yesterday said the government will curb spending because its budget deficit will be wider than expected.

‘Scope to Cut’

The central bank “has scope to cut the policy rate and provide liquidity support for banks if necessary” should domestic growth or global financial markets falter, the fund said.

“Reflecting the impact of the earthquakes and slower-than- expected economic recovery, we project the 2011 fiscal deficit to reach 9 percent of GDP,” the IMF said. “We assume the earthquakes increase public expenditure in the current year by NZ$6.5 billion.”

The IMF said the government should target returning to a budget surplus by 2015 to protect itself against future shocks and reduce debt.

“We encourage the government to take concrete measures to control spending and thereby strengthen the credibility of budget plans,” it said. There is scope to reduce payments to middle-income families, to rationalize capital spending and improve the efficiency of public services, the fund said.

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China on Sunday expressed “regret” over punishing airstrikes by the U.S. and European nations against Libya to enforce a U.N. no-fly zone.

Foreign Ministry spokeswoman Jiang Yu said China “consistently disagrees with the use of force in international relations” and expressed “regret” over the Saturday attacks.

In a statement posted on the ministry’s website, Jiang said China “hopes the situation in Libya resumes stability as soon as possible” in order to avoid escalation of a military conflict.

China was among five countries that abstained from Thursday’s vote on the U.N. resolution to allow “all necessary measures” to stop Libyan leader Moammar Gadhafi. It was approved with the backing of the United States, France and Britain.

The strikes marked a sharp escalation in the international effort to stop Gadhafi after weeks of pleading by the rebels, who have seen early gains reversed when his regime unleashed the full force of its superior air power and weaponry short term personal loans.

Operation Odyssey Dawn, as the allied assault has been dubbed, followed an emergency summit in Paris during which the 22 leaders and top officials agreed to do everything necessary to make Gadhafi respect a U.N. Security Council resolution Thursday calling for the no-fly zone and demanding a cease-fire

Earlier this week, China had strongly repeated its reservations about the U.N. authorizing military action.

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Five Build-A-Bear Workshop stores in Japan have been closed in the aftermath of the devastating earthquake.

This is yet another reminder that the world is flat — and that global is increasingly local, as the saying goes.

Overland-based Build-A-Bear has a franchisee who runs nine stores in Japan. All of the stores’ employees are safe, a company spokeswoman said.

The five stores that have closed are all in shopping malls that have shuttered in the wake of the disaster. These stores are in Sendai, Hanyu, Narita, Koshigaya and Tsuchiura.

Build-A-Bear’s foundation also announced this week that it is making a donation of $25,000 to the American Red Cross for relief efforts in Japan.

In addition to company-owned stores in the United Kingdom, Build-A-Bear has franchisee agreements in 12 countries including South Africa, Thailand, Mexico, and the United Arab Emirates.

Another one of its franchised stores in Bahrain was also recently closed due to the political turmoil in that country.

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Oil prices rebounded Wednesday as traders tried to gauge the impact that numerous international crises will have on world energy demand.

Benchmark crude for April delivery gained 70 cents at $97.88 per barrel in afternoon trading on the New York Mercantile Exchange. Oil rose as high as $99.60 earlier in the session. In London, Brent crude rose $2.09 to $110.61 per barrel on the ICE Futures exchange.

A series of global events has rattled markets in the past several weeks, with Wednesday’s focus shifting between Japan’s crisis and rising tensions in Bahrain.

Analysts say oil prices will continue to have wild swings as perceptions shift about demand in the global economy. The price of benchmark crude has fallen after topping $105 a barrel earlier this month.

“There’s just so much uncertainty,” PFGBest analyst Phil Flynn said. “Everyone’s trading emotionally.”

Analyst Jim Ritterbusch said the global situation, particularly in the Middle East and North Africa, overshadowed disappointing U.S. economic news that new home construction fell to the second-lowest level on record in February and wholesale prices rose last month.

“There are just so many geopolitical and economic and political crosscurrents that the market shifts each day in an attempt to discount things,” he said.

Here are some of the issues moving energy prices this week:

_In Bahrain, soldiers and riot police clashed with protesters demanding political reforms. Bahrain doesn’t produce much oil but it is adjacent to Saudi Arabia, the world’s biggest producer of oil. More than 1,000 Saudi-led troops entered Bahrain Monday to support the monarchy.

If the uprising grows, analysts fear it could spill across the border into Saudi Arabia and pose a threat to oil production there. So far protests have been minimal in Saudi Arabia. Experts also worry that another OPEC heavyweight, Iran, may be swept by uprisings. Saudi Arabia produces about 8.4 million barrels of oil per day, more than any country in the world. Iran produces 4.3 million barrels per day. Bahrain also is strategically important to the U.S. as home to the Navy’s 5th Fleet.

“The Bahrain/Saudi situation is a powder keg,” analyst and trader Stephen Schork said.

_In Libya, Moammar Gadhafi continued to pound rebel strongholds as the country’s oil exports ground to a halt. Before the uprising, Libya produced about 1.6 million barrels per day, or nearly 2 percent of world demand. Saudi Arabia and other OPEC countries have increased production and say they can make up for the Libyan crude, most of which went to Europe.

_With homes and businesses destroyed by Japan’s deadly earthquake and tsunami, energy demand is expected to initially decline in the world’s third-largest economy. But economists say the country will need to boost imports of oil, natural gas and coal as it makes up for power lost from damaged nuclear facilities. Normally more than 50 nuclear reactors supply about 25 percent of Japan’s electricity. Japan’s nuclear agency says 13 reactors at four nuclear power stations are shut down.

The biggest share of Japan’s power generation _ around 28 percent _ comes from coal-fired plants. Platts reports that five of those plants are shut down because of the earthquake, taking down about 10 percent of the country’s coal-fired generating capacity. Japan also has generators that can run on liquefied natural gas (LNG) and crude oil.

To make up for the shortfall, Barclays Capital estimates that Japan will need to increase imports of coal by 7,800 tons per day and of fuel oil by 143,000 barrels per day. The country also will need an extra 67,000 barrels per day of crude and 800 million cubic feet per day of liquefied natural gas.

J.P. Morgan analysts think Japan will use 150,000 to 200,000 additional barrels of oil per day through August to meet peak summer power demand. Last summer Japan used over 300,000 barrels of oil per day to generate power.

The combination of events is raising doubts about world energy demand and supply this year. As an example, Swiss oil services company Weatherford International Ltd. said Tuesday that it could not provide earnings guidance for the full year because of a variety of issues, including political instability in the Middle East and North Africa.

Meanwhile, the U.S., the world’s largest oil consumer, said its crude oil supplies grew by 1.7 million barrels last week, a little less than 2.1 million barrels analysts expected, according to Platts, the energy information arm of McGraw-Hill Cos.

At the pump, gas prices dropped for a second day Wednesday, though they’re still at the highest levels ever for this time of year. The national average for a gallon of regular fell less than a penny to $3.553 per gallon, according to AAA, Wright Express and Oil Price Information Service. That’s 42.7 cents more than a month ago and 76.6 cents higher than a year ago.

Analyst Ritterbusch said motorists should see some lower pump prices because of the drop in oil over the past week, but he speculated that prices could push above $4 a gallon by next month if oil prices remain volatile. Prices already are at $4 a gallon or higher in some areas, including Hawaii and California.

In other Nymex trading for April contracts, heating oil added 6 cents at $3.0097 per gallon and gasoline futures gained 3 cents at $2.8350 per gallon. Natural gas was unchanged at $3.941 per 1,000 cubic feet.

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Chicago and two major airlines have reached a nearly $1.2 billion agreement that resolves many, though not all, longstanding disagreements over the further expansion of O’Hare International Airport, city and federal authorities announced Monday.

That means the construction of an additional runway can begin soon at O’Hare, one of the world’s largest airports and a vital U.S. air traffic hub, though questions about timing and the pace of other planned work still must be ironed out.

“Making improvements to O’Hare will not only reduce flight delays and improve service for air passengers across America, it will ensure one of our busiest airports continues to thrive economically in the future,” Transportation Secretary Ray LaHood said.

United and American airlines had sued in January, accusing Chicago of violating a lease agreement giving airlines authority to approve expenditures for capital projects. Chicago Mayor Richard Daley countered that the airlines reneged on a 2001 promise to help see through the overhaul of O’Hare, which is expected to have a final price tag of about $15 billion instant payday loan.

Monday’s statement didn’t break down just how much of the expansion bill each airline had agreed to pay or from where the money would come. It also wasn’t immediately clear whether the deal put the brakes on the airlines’ litigation.

But American Airlines CEO Gerard Arpey hailed the agreement in the same statement, saying it takes into account the hard economic realities faced by carriers.

City officials have argued that finishing a second phase of expansion, which was also supposed to include a terminal, will help reduce delays in Chicago and throughout the U.S. air transport system.

The first phase of the project culminated with the completion of a new runway and a control tower in 2008.

Airlines, however, balked at footing most of the bill for more upgrades, saying they will benefit little.

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Kingdom Holding Co., the investment company headed by Saudi billionaire Prince Alwaleed bin Talal, and Bahrain’s Batelco Group launched a joint bid Sunday for telecom Zain’s Saudi operations.

The two suitors didn’t say how much they were offering for the 25 percent stake, which they previously had pursued separately. Those earlier offers were unsuccessful.

Kuwait-based Zain has been seeking a buyer for its Saudi division as part of a $12 billion deal for the parent company from Etisalat, a state-run telecom headquartered in Abu Dhabi that has expanded rapidly beyond its home market in the United Arab Emirates.

Zain owns a quarter of the Saudi division that bears its name. Another 45 percent is publicly traded, with the rest held by private shareholders.

Batelco CEO Peter Kaliaropoulos said he is confident a successful joint KHC-Batelco bid will create additional value for his company’s shareholders. He described Batelco’s role as a “technical partner” to KHC in pursuing the deal.

“We value (KHC’s) leadership and we look forward to supporting them through an effective technical and business partnership,” he said no fax payday loan.

Bahrain’s government, which is facing stiff and prolonged opposition from anti-goverenment protesters, owns more than half of Batelco. The company provides telecom services under its name in the island kingdom and Egypt, and owns stakes in five other telecom firms in the Mideast and India.

KHC’s investments include stakes in a number of blue-chip Western companies, including Citigroup Inc. and News Corp.

A Zain spokesman said the company would comment only after its board had met and made a decision on the offer. He spoke on condition of anonymity in line with company policy.

The offer is good until Monday morning.

Etisalat launched its bid for Zain in September, but the takeover effort has dragged on longer than it expected.

Zain must dispose of its Saudi stake to satisfy regulators because Etisalat already has a stake in mobile operations in the kingdom.

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President Barack Obama and the Senate’s top Republican both declared on Friday they want to take on the huge entitlement programs driving America’s long-term deficits _ but their lines of attack differed sharply and that could lead to a showdown over government borrowing.

Senate Republican Leader Mitch McConnell warned that GOP senators would not vote to increase the federal debt limit unless Obama agreed to significant long-term budget savings that could include cost curbs for Social Security, Medicare and Medicaid, laying down a high-stakes marker just weeks before the limit is reached.

Obama said he also wants to tackle military spending and tax loopholes _ issues on which he can expect Republican opposition.

The president said at a news conference that he would be ready to dig into the nation’s long-term financial problems after he and lawmakers reach a deal on funding the government through September. Republicans and Democrats have been debating a short-term funding plan for weeks but are still far apart.

“Republicans in the Senate will not be voting to raise the debt ceiling unless we do something significant about the debt,” McConnell told The Associated Press. “I don’t think he has to lay out in public exactly what he’s willing to do, but we need to begin serious discussions, and time’s a wasting.”

Congress is expected to vote on a three-week stopgap measure next week to buy more time for negotiations on a longer-term budget bill. The House Appropriations Committee Friday afternoon released a measure that contains $6.1 billion in budget savings by rescinding unneeded money from the Census Bureau and other accounts, killing programs proposed for termination by Obama and emptying accounts set aside for lawmakers’ earmarks.

The short-term spending plan involves day-to-day operating budgets _ not major benefit programs like Medicare, Medicaid and Social Security that are seen by most budget experts as long-term contributors to the nation’s spiraling debt. The three programs will make up more than 40 percent of federal spending next year. If left unchecked, they will grow to more than 60 percent of federal spending by 2035, when baby boomers will be at least 70.

“I think it’s very important, when we think about the budget, to understand that our long-term debt and deficits are not caused by us having Head Start teachers in the classroom,” Obama said. “Our long-term debt and deficit are caused primarily by escalating health care costs that we see in Medicare and Medicaid that is putting huge pressure on the overall budget.”

He added, “We’ve got to make sure that we’re tackling defense spending, we’re tackling tax expenditures and tax loopholes, that we’re tackling entitlements.”

The federal government’s tax revenues are at their lowest level in 60 years, when measured against the size of the economy, largely because of a weak economy and the extension of Bush-era tax cuts approved in December, according to the nonpartisan Congressional Budget Office.

Republican leaders have steadfastly opposed moves to bring in additional money by closing tax breaks such as those designed to help businesses.

McConnell has been pushing Obama _ publicly and privately _ to work on a bipartisan plan to rein in the massive benefit programs before they swamp the government. McConnell was purposely vague about he would address them in Friday’s interview. But by threatening to withhold votes to raising the debt ceiling, he gave the issue a new sense of urgency.

Democrats cannot increase the debt ceiling without Republican support in both the Senate and House. The Treasury Department estimates the government will hit the $14.3 trillion debt ceiling sometime between April 15 and May 31. The administration has warned Congress that failing to raise the debt limit would lead to an unprecedented default on the national debt.

A failure by the government to meet its debt obligations would drive up the government’s borrowing costs and also raise borrowing costs for private U.S. companies and consumers.

“Even a very short-term or limited default would have catastrophic economic consequences that would last for decades,” Treasury Secretary Timothy Geithner said in a Jan. 6 letter to Congress.

Obama did not address the long-term financial problems of Social Security, Medicare and Medicaid in the 2012 budget proposal he released in February, saying it will take time to create the political environment necessary for Democrats and Republicans to negotiate in good faith on such difficult issues.

Many Republicans and some Democrats in Congress say now is the time to act, before credit markets force action by reducing their appetite for Treasury bonds. Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, said Thursday that House Republicans will address entitlement programs in the 2012 budget plan they will unveil in April.

In the Senate, a bipartisan group of three Democrats and three Republicans meet weekly to discuss ways to address all of the nation’s long-term financial problems.

“I applaud all of the discussions that are going on in the House and the Senate by well-meaning members,” McConnell said. “But without presidential leadership, nothing will happen. We will not get a result.”

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