John Olagues

Treasury Accepts Lowball Price for TARP Warrants

Linus;

As you know, the "fair value" of those warrants can be calculated quite precisely using theoretical pricing models.

Given the extreme recent historical and implied volatilities of the banks, the warrants "fair value" are very high. I am certain that the Treasury, under criminals like Geithner will not receive anything near "fair value". If the Treasury wants to sell their warrants to third parties, I am certain that the third parties will get great buys as they can immediately sell listed calls and short stock and hedge away most of the risk and pocket high theoretical advantages.

But I am confidant that the third party buyers will be friends of Geithner and Dimon and Paulson and Bernanke and other errand boys.

Please ignore the "comments" of the banking shills who seems to immediately rise when their darlings are spotlighted.

John Olagues