TimT

Ten Banks Escape from TARP: Reason to Celebrate?

Genius....


On Jun 10 10:36 AM Mad Hedge Fund Trader wrote:

> Not me. The world’s largest hedge fund is taking profits on one of
> its biggest positions. I’m talking about the US Treasury allowing
> ten banks to repay $83 billion in TARP money. I guess the banks really
> want to get the government green eye shades out of their board rooms,
> who have been surreptitiously swiping the soap out of the executive
> washroom. This means paying back 5% money when it costs 6% to fund
> in the markets, and 10% of you want to raise equity. I guess it’s
> worth it if this enables you to revive your celebrity golf tournaments
> in California for “clients,” throw Caribbean parties for your top
> producers, and get the Gulfstream out of storage after it couldn’t
> be sold. Could bonus compensation also be an issue? Gee, do you think?
> I have to begrudgingly give the government credit for making a ton
> of money on this trade. Not only did they borrow from us at zero
> and lend at 5% in huge size. They also got, at the point of a shotgun,
> fistfuls of equity warrants that have tripled. And they did stop
> the bank runs that took Morgan Stanley (seekingalpha.com/symbo...)
> down to a near death experience of $6, boosting it back up to a positively
> virile $32. Alas, if only I could play by their rules. I have a question,
> Mr. Geithner. Does the government have to pay taxes on those profits?
> Will it report them?