B.M.

How Treasury Favors Banks over Taxpayers in Warrant Negotiations

Forced into taking TARP? Let me remind everyone that the government tooth fairy gave out free money to GS and other banks who made bets with AIG. Those banks were aware of the counterparty risk of AIG, they chose to ignore it. Did they pay? No, the taxpayer paid. So let's not run around saying the banks took TARP against their will. Had the TARP not been there, WFC, BAC, C, AIG, FNM, FRE, and yes, GS and JPM and MS would have all gone t!ts up from a panic run on those banks.

You can't listen to people like Warren Buffett either, who say TARP and gov't bailouts were necessary. OF COURSE they were necessary according to Buffett, he's got tremendous skin in the game in the form of ownership of STI, WFC, BAC and other banks which would have gone under.

The bottom line is, this author is correct in saying the gov't is handing taxpayers money to bankers. This is a fact. Those of you in the banking industry should just shut up and be happy there isn't a lynch mob outside your door, because that is what would have happened in the old days had you ignorantly opened your mouths which are feeding on the gov't teet.

How Treasury Favors Banks over Taxpayers in Warrant Negotiations

You dissenters all assume taxpayer gets whole on all the banks who were given TARP. Do you forget that only a minority of banks will pay back the TARP?? So just because your AAA credits are paying, doesn't mean the "cost to taxpayers is nil", we are paying because the sub-prime banks are going to eat all our TARP and give nothing back.

Furthermore, when part 2 of this crises occurs, the gov't is going to have to bail out TARP-paybackers AGAIN.