TARP Repayments: Investors Get Screwed Again

Okay, so let me get this straight. Not only were certain banks forced by the powers that be to take TARP money; now that they want to pay it back, they have to ‘prove’ to those same powers that be that they can raise money in the public market. So at first the taxpayers got screwed and now the shareholders of these certain banks get diluted and lose 4% overnight as these banks hold multi-billion dollar stock offerings.

When will all of this nonsense stop? After all, why should these banks have to prove that they can raise money? I thought that the results of the ’stress test’ was proof in the pudding as to the financial situation of individual banks?

If this isn’t further proof of the dangers of government intervention, I don’t know what is. Anyone notice a pattern? Government gets involved in an industry, taxpayers have to foot the bill as billions of dollars are thrown into a black hole, and then the government sets another rule that ends up diluting or in the case of the auto's, completely wiping out any value that shareholders had.

As usual it’s the little guy that gets screwed!

Comments

[mkreisel:]

Who should you trust more?

Bankers who got us into this mess, or Bernanke who tries to clean up their mess?

Jun 03 02:35 AM

[H Nguyen:]

Yes, small guys get smack, but the damage from the small guys compare to the damage for those who sent their monies from overseas (countries) that benefited from out sourcing and high oil price) are so small.

Jun 03 03:14 AM

[Free Market...:]

I don't think it was the banks that got us into this mess. It was the Govt saying that they would back up the mortgages (the implied support through Fannie & Freddie) to people who couldn't / wouldn't pay them back. If not for that, the banks and the ultimate investors would not have touched them and the flow would have been cut off years ago.


On Jun 03 02:35 AM mkreisel wrote:

> Who should you trust more?
>
> Bankers who got us into this mess, or Bernanke who tries to clean
> up their mess?

Jun 03 02:17 PM