tag:blogger.com,1999:blog-1194375569044391746.post579828239793369811..comments2024-03-28T05:30:09.322-04:00Comments on Corporate Justice Blog: Profiting From TARP: The Treasury Department Nets $1.5 Billion In Bank Of America Warrant SaleSteven Ramirezhttp://www.blogger.com/profile/16741346526253732489noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1194375569044391746.post-14822964959546641762010-04-08T16:33:08.743-04:002010-04-08T16:33:08.743-04:00On Monday March 29 2010 The Treasury Dept. decided...On Monday March 29 2010 The Treasury Dept. decided to sell its stake in troubled banking giant Citigroup over the course of the year. This sets up the government to make a substantial profit at the bank's current share price.<br /><br />Treasury says it will sell the 7.7 billion shares of Citigroup common stock it received in June, 2009, in connection to a $45 billion federal bailout. The government paid $25 billion for the stake, or $3.25 a share. At Citi's current share price of around $4.28, Treasury would book a profit of about $8 billion.<br /><br />Treasury adds that the sales don't affect its holdings of Citigroup trust preferred securities or warrants for its common stock. After the sale, the United States will continue to hold about $5.3 billion Citigroup trust preferred securities. The bank raised more than $20 billion of capital in December to buy trust preferred securities held by the United States.At the end of 2009, Citi repaid $20 billion of the funds received under the federal government's Troubled Asset Relief Program (TARP).<br /><br />These profits are going to make a great PR victory for the current administration …I sincerely thought that it would have taken a lot longer for banks and institutions to pay the TARP funds back. I think Citi should wait until the end of the year to pay back their TARP because the country is not quite out of the financial crises. Paying back the TARP funds to soon could hurt the capitalization ratios along with the banks earnings which might stimulate another sell off. We wouldn’t want to have to bail out a bank whose already paid their TARP funds back do we????Sarkis Zadeyanhttps://www.blogger.com/profile/02258786490141863316noreply@blogger.comtag:blogger.com,1999:blog-1194375569044391746.post-90082258895404446392010-03-08T12:38:58.609-05:002010-03-08T12:38:58.609-05:00The fact is, as long as there are outstanding debt...The fact is, as long as there are outstanding debts and our nation is in a deficit, the media will be charged to follow politics and the politicians that agreed to loan the money. The success of TARP will take years to assess but in the meantime, banks will not feel pressured to continue to lend money once they pay back the government's auctions. So far, this has been the case; Goldman Sachs borrowed less money from TARP so they quickly paid it back so that they would not be forced to lend money when they do not feel like it. JP Morgan and other banks will soon follow. Hopefully this will not be a consistent trend for the future or else we will be back in this position again within another 5-10 years.Aston C. T.https://www.blogger.com/profile/15403192706820663311noreply@blogger.com