In an interesting piece in the Urinal today, Stuart Varney alleges that banks are being pressured into NOT repaying TARP money, because the Obama administration wants to maintain control:
http://online.wsj.com/article/SB12387983309458816…
Prominent banks who were forced to take TARP money to legitimize the program and now want to repay TARP funds to get the government monkey off their backs are being refused and pressured to keep the money so the feds can continue to exert control? What country is this again?
Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.
How far will this runaway train be allowed to go?
If I've read the sections pertaining to TARP in companies annuals correctly, they can't repay the money until 2011 unless they do so by issuing new preferred stock in public markets in the amount of the TARP investment.
Four banks have repaid their TARP money already, without issuing any new stock. They did pay interest on the money, but were allowed to pay it back. The four banks were:
Bank of Marin Bancorp - $28 million Iberiabank - $90 million Signature Bank - $120 million Old National Bancorp - $100 million
I certainly could be wrong, but I seem to remember reading that under a certain amount (I think 5bn) the banks don't have to issue new preferred before they can redeem the TARP money. I'll keep looking for the source.
we really are heading towards communism.
Did anyone else read the loosened regulation regarding travel/money transfers to Cuba in the Journal today?
The world has changed. And we must change with it.
The rules I referenced were the original TARP rules. They have subsequently been changed. See this S&P publication:
http://www2.standardandpoors.com/spf/pdf/events/FITconHybrid3.pdf
[quote=drexelalum11]The rules I referenced were the original TARP rules. They have subsequently been changed. See this S&P publication:
http://www2.standardandpoors.com/spf/pdf/events/FITconHybrid3.pdf[/quote]
Nice catch, Drex. Thanks for the link.
TARP => TRAP
How come none of bankers and us saw it coming?
How all of this is happening in America? I was stunned enough when the House passed the unconstitutional (on two counts) "AIG tax" in a weekend.
GS CFO has said that GS will pay back the approx $10B in Tarp Money in 2009.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=a3xTcf52…
At first I questioned their decisions. Then I started getting pissed off at their new ideas. Now I just sit back and laugh at these boneheads running this country.
I used to always come home and turn on CNBC, but I stopped watching all news channels a while ago, because the news made me angry every single day. I don't give a fuck anymore.
I don't know who said it (I think it was Rush Limbaugh), but I agree with him and hope that Obama will fail. I sometimes hope that the recession will last at least 4 years, because I couldn't stand living in this country if these communists get re-elected for a total of 8 years.
Alright just had to vent...
I find this whole situation hilarious, because our government is screwing things up, while hundreds of millions are supporting them and think that the government is actually doing the right thing. This reminds me of Germany during the 1930s (hitler); a naive society at a time of crisis following a charismatic but incompetent leader.
I'm not nearly conservative enough to agree with Rush Limbaugh - I'd like Obama to succeed, for purely selfish reasons, and because if he doesn't, Palin will get elected.
However, I have completely stopped watching news channels because they are either reporting some puerile human interest story, which I can't stand, or they are railing about whatever their pet theory of the day is. If I need news updates, I can get them online just as efficiently.
A bit harsh on the new administration?
Obama's thirst for controlling the industry is bit of a disappointment though.
And how on earth do you stop watching all news channels... (perhaps I missed the sarcasm)
When I was interviewing with GS, I specifically asked my interviewer about the company repaying the TARP. She told me that they were going to pay it back as soon as possible, because they don't want to be controlled by the government.
Romney2012!!
"I'm a fly Malcolm X, buy any jeans necessary."
It's widely known that the Fed strong armed a number of banks (think JPM) into accepting the TARP money and is strong arming them into not paying it back. When the UK did its bank bailout only certain banks took money and they got hammered the next day - the Fed wanted to avoid this happening with the U.S. banks. By forcing everyone to accept money, they hoped the conceal which banks were truly in trouble and were in dire need of the money (think Citi, B of A), though that's now been uncovered. Just the same, if GS, JPM, MS were to repay the TARP money, the stocks of other banks that are unable to so do would likely get hammered.
www.gottamentor.com
Obama is a domestic dictator and a foreign policy pussy. The worst of all worlds.
http://online.wsj.com/article/SB123879833094588163.html
Quasi ea error quis aut accusantium. Enim reiciendis laudantium ut enim iste eos. Aut rem est molestiae beatae.
Optio ea tenetur maxime veniam ut nam. In molestiae architecto itaque sit nulla. Nostrum sint eum sit dolores.
Fugiat perspiciatis dolorem aperiam quis facilis. Illo earum dignissimos enim. Reprehenderit quos ipsum in iste eligendi possimus. Minima ipsam aut cumque esse qui non vel eius. Qui ut voluptates aut.
Quia omnis labore non vel. Aut voluptatibus ducimus exercitationem nihil.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...