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.

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U.S. stocks suffered their first weekly loss since May last week, further exacerbating trader concern that the bullish surge that sent share prices up as much as 40% from their March lows may have been overdone.

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.

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A total of 10 U.S. banks have now repaid the preference share investments in them made by the U.S. Treasury Department’s Troubled Assets Relief Program (TARP), thus demonstrating that the government thinks they are sound. A number of others have yet to pay back that federal infusion. For investors, the question is this: Where do we go from here?

What do you do with your portfolio positions when the stock market moves strongly in one direction?

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.