It was widely known that Goldman Sachs (GS) bought back the warrants it issued the government as part of the bailout at a profit. But it was unclear just how profitable the deal was for the government. It was also unclear if the sales of warrants by other banks represented a good deal for the banks.

Recall Morgan Stanley (MS) also paid to buy back the warrants, while JPMorgan Chase (JPM) chose to sell the warrants via auction. A report issued this week has found that the government took in a profit of $4 billion, overall. You have to consider this good news. Banks should be relieved that they dodged what would have been another PR hit. All in all, the Treasury Department maintains it has generated an absolute return of 3.1 percent from dividends and a 5.7 percent return from the sale of the warrants in 34 banks. So it's not been a financial disaster for taxpayers, but it did represent something of a gamble. Had stocks not recovered the returns would have been awful. 

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