Some nice suggestions from Donald Marron to end the tyranny of the TARP, but we despair that they shall ever come to pass.
Treasury should give up on negotiated sales and simply auction the warrants it received through its TARP investments. Auctioning the warrants will:
* Enhance the transparency of the process (since no one can accuse Treasury of playing favorites in the auction);
* Ensure that taxpayers get a fair return on their investment (since the warrants will be sold at their real market value);
* Allow banks, if they choose, to preserve needed capital (if investors purchase the warrants, banks won’t have to use up any of their scarce capital); and
* Free banks from the nuisance of government involvement (since banks get free of TARP even if private investors end up purchasing the warrants).
The reality is that the TARP has been far more useful to the Treasury and the Administration in general as a cudgel than as a stimulus and bank support program. Donald’s first and last points are, in fact, bugs, not features to a Treasury that, for example, negotiates the results of stress tests with its regulatees. Of course, it would be interesting if The Big Guy financed minimum pricing limits on the warrants.
[Donald Marron via Alea]
great idea
Yeah, that’s the ticket, keep painting the living dead as victims.
The mere existence of TARP is the only thing that gave you losers the sense that you might ever collect from your counterparties at all. It was a regrettable action on the part of governments past and present. You s–t-eaters ALL should have been allowed to fail, and fight it out for years in bankruptcy court, just so that I would have had the pleasure of listening to EP’s bemoaning the gov’s having let the banks fail as he asked me for spare change.
@3- what are you doing reading this site? that’s an actual question.
Pequot capital closing
They’re droppin’ F-bombs at the D7 meeting I’m told…!!
I’m a she.
@3 sounds a lot like a recent CNBC commentator.
@8- and who would that be?
@9—It’s not you.
@4 fair question, I’m reading it because as much as EP’s self-righteousness annoys me, I just love Bess’s posts.
- 3
EP @7
Prove it.