Did they really bought bank preferred and warrants from the holding companies? No new issue? And no control? Anyone who has a slightest idea about M&A knows what that means.
They knew this was an once in a lifetime opportunity to make billions out of complete business failure. And Geitner is still struggling about what to do... all because of their antisocialist ideology. Americans need Trotsky to save them. I will become a patissier, God willing.
The FDIC only resolves the bank and typically pushes as much as possible back to the holding company for them to deal with. Knowing this....it's clearly malfeasance.
Utterly outrageous. Not an attempt to solve the problem. Just shovel money to his buddies. Can someone explain why I am wrong? And why this should not be unwound and why Paulson, Bernanke and Geithner should not go to jail? As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
It would seem obvious that helping banks, not holding companies, would be the most direct way to stimulate bank lending. But when TARP purchased preferred stock and warrants, it bought them from holding companies, not their bank subsidiaries. While TARP has been generous with bank holding companies, these companies have not been so generous with their banks. Four large holding companies -- JP Morgan, Citigroup, Bank of America and Wells Fargo -- initially received a total of $90 billion in TARP money in the fall, but by the end of 2008 they had contributed less than $15 billion in equity capital to their subsidiary banks. The holding companies seem to have invested most of their TARP money in their other businesses or else retained the option to do so by keeping it in deposit accounts, even as the capital of their banks decreased. At the same time the banks, which provide the majority of loans to large corporate borrowers, drastically reduced lending to new borrowers.
While TARP has been generous with bank holding companies, these companies have not been so generous with their banks. Four large holding companies -- JP Morgan, Citigroup, Bank of America and Wells Fargo -- initially received a total of $90 billion in TARP money in the fall, but by the end of 2008 they had contributed less than $15 billion in equity capital to their subsidiary banks.
The holding companies seem to have invested most of their TARP money in their other businesses or else retained the option to do so by keeping it in deposit accounts, even as the capital of their banks decreased. At the same time the banks, which provide the majority of loans to large corporate borrowers, drastically reduced lending to new borrowers.
