The U.S. government is starting to see profits from the $750 billion Troubled Asset Relief Program (TARP), started last year to thwart the financial crisis.

Today we examine a couple of recent stories from Fantasyland – otherwise known as Wall Street. Seven of America’s largest banks repaid their TARP borrowings to the US Treasury yesterday, in the process providing one more occasion for hopeful investors to proclaim the end of the credit crisis.

In a moment, I will tell you exactly how you can make some heavily leveraged gains as the stock of Capital One plummets.  But first, here’s an interesting true story.

Just days after Chrysler LLC said it would be cutting one quarter of its auto dealerships, 1,100 General Motors Corp. (NYSE: GM) dealerships have reportedly been told not to expect a relationship with the embattled U.S. carmaker after October 2010.

Even though the government stress tests have ended and the banks in question have set about raising the required capital, credit rating agency Standard & Poor’s believes the nation’s banking crisis has “merely entered a new phase” and might not end before 2013.

In an odd bit of capitalist irony, the U.S. banking crisis could end up as the catalyst that finally jump-starts the long-moribund market for initial public stock offerings (IPOs).  In fact, it already appears to be happening.

One business day removed from the government’s bank stress tests, four of the largest U.S. banks – BB&T Corp. (NYSE: BBT), Capital One Financial Corp. (NYSE: COF), U.S. Bancorp (NYSE: USB) and KeyCorp (NYSE: KEY) – announced plans to raise capital through stock offerings.

The results of the government’s bank stress tests were released yesterday (Thursday), and the U.S. Federal Reserve has directed 10 banks to raise an aggregate $70 billion-plus in capital.

Executives from credit card issuers, including Bank of America Corp. (BAC) and American Express Co. (AXP), met with President Barack Obama last Thursday to make their case against new limits on transfer fees and higher interest rates.

Although we’re still in the middle of the worst financial crisis in decades, a few select banks are positioned to make a boatload of profits. And if you pick the right ones, gains of 100% or more are easily within reach.