They were money-boarded!

Does Code Fink know about this? What about Nancy Belushi? Barney Rubble? Harry “Nevada Thin” Reid? Keith the Worst Sportscaster in the World? Chris “Kringle Tingle” Matthews?

The terms and language of the warrants varies between the banks. There are a couple of different versions out there and there are plenty of write ups on the various settlements made already for TARP warrants in the public domain. Read up and you will understand why the governement is pausing on this.

Do the banks have the cajones to play hardball?

Am I in trouble?

The warrants will be worth more as we emerge further out from the crisis. The stock prices are still historically low for many of the firms who have returned the funds.

That is called SPECULATION. You are advocating that he federal government become a stock speculator. There are other shares that will rise when/if we emerge from this crisis, too. Shoudl the federal government speculate on them, too? They could make a lot of money – more than speculating on the banks, even.

I think there is plenty of upside left without this creating an undue exposure to the tax payers.

The exposure is undue, in and of itself. And it is un-Constitutional, to boot.

The chairperson of the oversight board you thought was a great idea agrees.

Where did I say that anything about TARP was a “great idea”? I only expressed that the ridiculously pathetic oversight that was finally put in was not as awful as the original bill had structured things.
Let me say this slowly for you – TARP was un-Constitutional and stupid, oversight or not, but it would have been even worse without any oversight. As it is, there is an infinitesimal amount of oversight. Yippee!

And I couldn’t care less what anyone else thinks. I am giving you my views.

I respectfully disagree with you on this as being some sort of threat to our nation.

lexhamfox on June 9, 2009 at 6:34 PM

When the Constitution is actively ignored, this nation comes under very serious threat. The Founders understood that the best way to fashion a governmental structure that would be rigorous and strong, though not strangling to the citizenry, was through the limitation of power and then the appropriate ways of breaking that power up and placing different entities in competition/conflict/partnership in their quest to exercise the bits of power that they were assigned. This is the essence of the Constitution, not the social drivel that most lefties think it’s all about. To dismiss this is to violate the most deeply held views of the Founders about what America is, and to take away our true strength.

That’s okay, because the idiot messiah’s anti-individualist, anti-competitive, anti-capitalist, anti-growth, enviro-wacko and insane spending policies will kill the dollar, anyway, and end this nation’s existence, so the whole TARP problem will just end up in the background of a dead federal structure.

To me… that is more un-American than holding the warrants longer.

lexhamfox on June 9, 2009 at 6:12 PM

Bank shares have already risen a huge amount since the issuance of the warrants. The profit is there, right now. Holding onto the warrants only keeps the federal government exposed to the movement in the values of bank shares – i.e. speculating on bank shares.

Why do you think the government should be speculating in private stocks? Why does that concept not bother you? What do you have to say about the reason the warrants were issued and how that reason ceases to exist with the repayment of the TARP funds?

TARP was one possible response to the crisis, and neither the best response nor the Constitutional one. Do you remember how Paulson originally came in with a three page description for the authorization of TARP? DO you remember what the moron Dems wrote instead? Do you remember that it took the courageous pushback of House Republicans to get the moron Dems to put any oversight into TARP, at all? Do you understand how that last bit of legislation was still un-Constitutional (as evidenced by the Geithner interpretation that TARP is now a permanent slush fund for Treasury to use for anything it sees fit)?

This is not ideology. This is practical Constitutionality. This is about the very real preservation of our nation.

But, when we have a bunch of morons that ram through almost a trillion in federal waste without letting anyone have time to even examine it the bill, I guess TARP seems almost reasonable by comparison. That’s how far we’ve fallen. It is pathetic and dangerous beyond words.

Unconstitutional? How? You are saying the US can only sell land or other assets at the original purchase price or less? The fed should not charge interest?

lexhamfox on June 9, 2009 at 5:42 PM

No. I am saying that the US government is not built to be in the business of making money. That much should be clear. The argument that the federal government might make money off of some transaction is not an argument that stands Constitutional scrutiny. What is so difficult to understand about this?

But, you have your mind set, so let me put it to you this way, the warrants were extended to the federal government for the sole purpose of providing some defense of the TARP funds that were given to them. If the TARP funds are returned, then there is no longer any reason for the feds to hold onto the warrants – except if the feds decide to go rogue and just act like a big trading house, which doesn’t seem to bother you at all.

Further, with respect to TARP, itself, I am saying that Congress is not allowed to delegate any of its responsibilites to other branches, even though it might want to. This is the basic difference between a Constitutional structure and a Democracy. Even if all agree to violate the Constitution, that doesn’t make it allowable in the Consitutional setting. Even if 100% of the people want something, they are still constrained by the Constitution. This idea has been lost, these days, as we have slipped into ochlocracy, in general, and the rule of incompetent fools in the particular.

Unconstitutional? How? You are saying the US can only sell land or other assets at the original purchase price or less? The fed should not charge interest?

ACORN is now eligible for $68 Billion in TARP loans

CMonster on June 9, 2009 at 2:20 PM

I am with you and all the others who think this is going to go to all the nuts.

OT- Foopie just pled NOT GUILTY in the nice Court in NY. God save us!

I don’t get you being so vexed over the US keeping the warrants.

Because the federal government should not be holding equity, or warrants, in any private companies.

Explain why the US should not get something back for adding it’s capital to the banking system during a crisis.

The federal government is not a hedge fund. Do you understand that? The federal government is not allowed to just “invest” any money it has, can get through taxes, or can print. That is not how the US was structured.

Your argument about the federal government making a profit is insane. The primary task of the US government is to protect the rights of American citizens on American soil, not getting its hands into private business and making money.

This isn’t Obama…. this was the intention of the Congress, the Bush Administration, and the Fed!

lexhamfox on June 9, 2009 at 5:23 PM

I don’t care who subscribes to this, it is un-American and un-Constitutional.

The government is out of pocket because the US has to borrow the cash in the first place. This was never intended to be a handout. The loan did not have a commercial interest component. I can assure you that Morgan Stanley and most of the other institutions which have since been rechartered as banks absolutely did need the money. It’s BS that the money was forced on them. Look at the rise in assets since the worst of the banking crisis has passed. TARP helped give everyone time to settle, work through their bad assets and liquidity, and recover rater than close down because they had no viability in September of 2008. It was effectively a bridge loan to get them through a period when their assets were in the tank. The fact that they can pay back the loans is good for everyone. There is still risk that the other parties not yet able or fit enough to pay the funds back will have worthless warrants. The whole purpose of the warrant is to keep it and sell it when it is worth the maximum value. The increase in value when the warrants are sold or exercised goes to the US current account… it helps offset the deficits you hate so much. I don’t get you being so vexed over the US keeping the warrants. Explain why the US should not get something back for adding it’s capital to the banking system during a crisis. This isn’t Obama…. this was the intention of the Congress, the Bush Administration, and the Fed!

Chaz.. go look up what a warrant actually is. The value is tied to share prices. It’s a good asset if the share prices go up. that’s why the US won;t sell them while the stock prices for these firms is still historically low. Would you?

Chaz706 on June 9, 2009 at 5:10 PM

Evidently, you know nothing about options – specifically equity options, here. There are many methods of evaluating their value.

In the end, you can take bids for them and decide whether you want to sell them at those prices, but your argument about expiration dates is crazy. All options have expiration dates, and Euro-styoe options don’t allow for exercise, except at expiration. But they are all fairly easy to value (there are many theoretical pricing models) and one can find markets for options on just about anything.

I’m not sure what point you’re trying to make, but your ideas about options (and, thus, warrants) are just misguided and incorrect.

And, BTW, TARP has always been illegitimate. The fact that Geithner now considers TARP a slush fund that will run in perpetuity makes it something far worse.

That’s got to be the single, most retarded statement I’ve seen.

progressoverpeace on June 9, 2009 at 4:57 PM

In order to sell Warrants you have to have buyer.

A warrant (like any other option) has an expiration date, and if it’s going to be exercised, it must be exercised before the expiration date.

alwyr on June 9, 2009 at 4:14 PM

If a Warrant has an expiration date you’re going to have to either (A) hold it until it expires. That kind of flies in the face of the argument that we wanted to sell the Warrants to make a profit in the first place. So (B) we have to sell it for a lower price because of the expiration date. The only people interested in such a Warrant would be (1) someone who would want to hamstring a back by pulling on their CEO’s strings or (2) the bank itself… which already had to pay penalties and interest on the TARP money they were forced to borrow in the first place.

Do you see my argument now?

Furthermore, what are the Warrants worth? Is there some material value (besides the TARP money. Key point here.) of the Warrants? If the bank wants to buy them back… what’s the price? That would have to be determined at the time of contract or this whole Warrant business is Null and Void. If the value of the Warrants was tied to the TARP money, then they should be given back to the bank when the bank repaid the TARP cash. If they were independent of TARP, then what did the banks get in return for selling the Warrants? If they were just made out of thin air (which is the only other possibility) then the whole legitimacy of this TARP business never existed.

You can’t sell Warrants w/expiration dates cause they’re only good for so long anyhow.

Chaz706 on June 9, 2009 at 4:41 PM

That’s got to be the single, most retarded statement I’ve seen.

Go back and look at news items when TARP was constructed… this is what everyone insisted on when the loans were made. It had to benefit the tax payers if the banks prospered on the back of ‘free’ government money they could not get anywhere else. I don’t know why Ed and others here are up in arms over the warrants not being cancelled or sold back at face value. I’d like someone to explain why the tax payers should not benefit from helping out Wall Street.

lexhamfox on June 9, 2009 at 4:36 PM

I will have to respectfully disagree with you. If the TARP money is being paid back in full, with interest, the tax payers aren’t out any of that money. It is my understanding, that this money was forced on the banks in the first place, and for a time, the banks wanting to pay it back, was refused by Geithner…and I’m sure he got his orders from someone on that.

Obama wants to try a new stimulus, knowing full well the first one isn’t working. We can’t spend our way out of this debt now…and Obama just wants to throw more money, we don’t have, at the problem. This tells me, this is what he wants. This is the aim, the goal. To essentially break the back of the economy, and re-create it, in his image. A god if you will, but not a very bright god.

Lew on June 9, 2009 at 4:43 PM

Well said, again. Care to cut to the chase? What’s gonna happen? :)

It’s official.

This administration is corrupt.

Skywise on June 9, 2009 at 2:18 PM

Did you just wake up from a coma? It’s been officially corrupt since about mid-afternoon on January 20th.

I’d like someone to explain why the tax payers should not benefit from helping out Wall Street.

lexhamfox on June 9, 2009 at 4:36 PM

For banks that ask for it, repayment of the warrants is – er – “warranted”. But for the banks that had it forced on them, why should they have to pay any de facto interest or penalty? Besides, the concern is not nearly so much the extra money the banks have to pay as it is the “power lien” Obama’s team is able to place on the banks, so they can still push the banks’ management around. I assume that plays well with the class envy crowd, but I — who am living okay but have roughly my net worth in a pickle jar full of nickels and pennies — find it appalling for the President of the United States to be running around making American citizens “eat a bug”.