John Olagues

How Treasury Favors Banks over Taxpayers in Warrant Negotiations

I would say that in all probability everyone of the banks that accepted TARP money needed and wanted the TARP funds. For example Goldman Sachs accepted $10 Billion when just weeks earlier they accepted $5 Billion from Warren Buffett where GS gave him 45 million warrants and 10% interest on the Warrants. That deal was far more onerous to GS than the TARP money.

The banks are probably borrowing from the FED at 1/2 % and paying off the TARP money which requires 5% and are trying to buy back the warrants for 50% of their value.

Perhaps executives like those at JPM who received $85 Million of SARs and Restricted stock in January 2009 which is now valued at $175 million should forfeit 50% of their gains back to JPM. JPM would be able to pay off the Treasury at its contractual value instead of begging for more subsidies from the Treasury.
John