The short answer is yes, the estimates presume some gains from some TARP investments. Some of the preferred stock investments have gone up in value, for example, and the government has received dividends and some warrants that have value. On the other hand, we’ve also lost money on some deals, most notably the initial money into GM and Chrysler. TARP accounting is a bit complicated — I might blog about it one day — but the basic idea is that CBO calculates a net present value based on the money out, a projection of future money back in, and a discount rate that accounts for the time value of money and a measure of risk.

P.S. A big question is whether some gains and repayments in TARP get recycled into new investments and, if so, how profitable those will be.

Does that mean that there is an imputed gain buried in these numbers? If that’s the case, what confidence can we have that $130 billion is at all a realistic estimate of the net loss?