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russiangambit (28.92)

Where is the TARP money?



July 10, 2009 – Comments (7)

Where is the TARP money, anybody knows? Today I was reading an article about Treasury selling warrants back to the banks below the market price. No surprise there. But I was surprised that all of the warrants remaining in Treasury are under 10 billion. I expected them to be to the tune of a couple hundred billion.

 “The report estimates the total value of bank warrants held by the Treasury at $8.05 billion, while the Treasury has recently offered a $6 billion estimate.” 

So, TARP was 700 billion, we were told 100 billion was never touched; another 100 billion or so was repaid recently. That leave 500 bil, and the warrants are only for 8 bil. Where is the rest of the money? I don’t think all the remaining 490 bil are in preferred stock. I can see may be another 100 bil in preferred stock. Where is the rest of it, I ask.

7 Comments – Post Your Own

#1) On July 10, 2009 at 10:13 AM, WeenTang (26.02) wrote:

As Obama promised, this is the most transparent administration in long as no one asks questions.

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#2) On July 10, 2009 at 10:17 AM, Dividends4ever (< 20) wrote:

It is in my backyard.

Ok so I'm kidding.

Ask Goldman. They borrowed it, ran the market up, made boatloads of cash, then returned the principal.

Best scheme out there, especially since the tqaxpayers dont seem to care. Must be the MJ television coverage that keeps everyone busy. 

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#3) On July 10, 2009 at 11:08 AM, drgroup (68.22) wrote:


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#4) On July 10, 2009 at 11:12 AM, farmnut1985 (< 20) wrote:

drgroup,  all I can do is smirk and shake my head, because somehow it would not suprise me.

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#5) On July 10, 2009 at 11:21 AM, FreeTruth (< 20) wrote:

No, no friends, Goldman became a bank back in October, received their stimulus money, gave it back after helping create a faux rally and now congress keeps it on deposit for use as their own slush fund.

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#6) On July 10, 2009 at 11:47 AM, starbucks4ever (88.09) wrote:

I don't care anymore. 100 billion more, 100 billion less...You have to print another trillion nowdays to get people interested...

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#7) On July 10, 2009 at 1:46 PM, rd80 (95.78) wrote:

It's in bank preferred stock, GM loans and new equity, Citi common, AIG loans, Chrysler loans and new equity, and GMAC loans.

The warrants were part of the capital purchase agreements.  When a bank sold preferred to Treasury they also had to fork over warrants for common worth 15% of the transaction as part of the deal - note that's not the value of the warrants - it's value of excercising the warrant. e.g.Goldman Sachs got $10 billion in exchange for $10 billion worth of prefered and warrant for 12 million shares with a strike of 122-something.

Half those warrants get cancelled if the bank raises private equity equal to the amount of the TARP investment before the end of this year.

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