Banks negotiating to reclaim stock warrants they granted in return for Troubled Asset Relief Program money may shortchange taxpayers by almost $10 billion if Treasury Secretary Timothy Geithner’s first sale sets the pace, data compiled by Bloomberg show. Full Story »
Posted by Kaizar Campwala
Taxpayers could be out some $10 billion if Geithner allows banks to buy back stock warrants at the same terms of his first sale, Bloomberg reports. Why other publications aren't hammering this story too, I'm not sure. This is one of the more crucial pieces to come out of TARP coverage. Bloomberg's analysis is impressive.
An important story that's very well reported by Pittman. Tax payers could be losing out on a lot of money going straight to banks, if other TARP paybacks are set at the same terms. Pittman calculates these projections, and consults with experts to lay out this story.
“Bank managers have stronger incentives than Treasury personnel to get a better deal for their constituents,” said Wilson, who has written about appraising warrants. More »
a complicated system for banks to pay off the warrants, the figures here let the reader understand what's happening. altho the banks say these payments are 'onerous' and 'punitive', it appears that if the banks waited longer to pay them off, they would be worth more, and they would have to pay even more. the gov't doesn't appear from this piece to think the cost to the taxpayers is thus.
If anyone thought the taxpayer was going to benefit form this TARP, they need to get a tarp, wrap theirself in it and cry. The only people who will make money on this is politicians. lobbyists, and banks.
The article delivers a bewildering array of prices, authorities, and some perspective on their meanings, but it is intended for those familiar with financial business. The implicit message is that Treasury is allowing taxpayers to take a beating on TARP sales.
With Treasury and the Fed Reserves populated with Wall Street insiders, it is not surprising that banks are being given high-sugar deals.
Treasury Department spokesman Andrew Williams,“We’re doing our best to protect the taxpayers’ interest and make sure we get fair market value." The first ... More »
Pittman did very good job at putting together data that otherwise could be used for anesthesia quite easily. The contextual relevance of the story forces the reader to see the facts for what they are - and some of them are stunning. In short - some of the banks are complaining that taxpayers may get a windfall - and without the ability to manipulate the market (as is often the case but not actually called that) the banks must deal in a transparent manner with re-purchasing the options. They aren't comfortable at buying them back at what they are referring to as inflated prices. Fact is - the stabilization is a direct result of the taxpayer fund ballast. Again, I respect the writer for the comprehensive neutral view of ... More »
One thing I haven't seen much talk about is a public advocate. When NYC was in terrible vendor hell - Mark Green (currently Air America Pres.) was the NYC Public Advocate - He helped mitigate numerous situations of all feather, and was in fact the electorates Ombudsman. It is an exceptional program that forced fairness into play and served to force dialog. It seems to me that if the taxpayers, had an independent representative that is rewarded by some magic formula to negotiate ... More »
Retrieving Comments
