Comments on: Repaying TARP: U.S. Changes the Rules http://www.aleablog.com/repaying-tarp-us-changes-the-rules/ Alea Jacta Est Mon, 12 Jul 2010 20:04:31 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Carlomagno http://www.aleablog.com/repaying-tarp-us-changes-the-rules/#comment-3025 Carlomagno Thu, 07 May 2009 08:14:07 +0000 http://www.aleablog.com/?p=3285#comment-3025 There are various reports that BAC and C have been hoovering-up distressed assets, for example http://www.zacks.com/stock/news/18599/C,+BAC+Pushing+Prices+Up%3F. There are various reports that BAC and C have been hoovering-up distressed assets, for example http://www.zacks.com/stock/news/18599/C,+BAC+Pushing+Prices+Up%3F.

]]> By: jck http://www.aleablog.com/repaying-tarp-us-changes-the-rules/#comment-3024 jck Wed, 06 May 2009 21:26:05 +0000 http://www.aleablog.com/?p=3285#comment-3024 The talk about banks taking bets on distressed assets is non-sense, it would increase their risk-weights balance just as they have to do exactly the reverse. Watch the end of quarter and t-bills going to zero or negative, that tells you that they are doing the japan banks trick, out of high risk-weight, i.e. junk and into low risk-weight, i.e. t-bills, short treasuries. The talk about banks taking bets on distressed assets is non-sense, it would increase their risk-weights balance just as they have to do exactly the reverse. Watch the end of quarter and t-bills going to zero or negative, that tells you that they are doing the japan banks trick, out of high risk-weight, i.e. junk and into low risk-weight, i.e. t-bills, short treasuries.

]]> By: Carlomagno http://www.aleablog.com/repaying-tarp-us-changes-the-rules/#comment-3023 Carlomagno Wed, 06 May 2009 20:10:58 +0000 http://www.aleablog.com/?p=3285#comment-3023 Don't agree. In view of reports that some banks are using TARP money to take bets on distressed assets or otherwise going on a gambling spree, I can perfectly well understand the Treasury putting in this kind of restriction. This is not to say that I approve of the overall approach the US Treasury has taken, but in the context of the current policy the restriction makes political sense (economics went out the window long ago, not just in the US BTW). Don’t agree. In view of reports that some banks are using TARP money to take bets on distressed assets or otherwise going on a gambling spree, I can perfectly well understand the Treasury putting in this kind of restriction.

This is not to say that I approve of the overall approach the US Treasury has taken, but in the context of the current policy the restriction makes political sense (economics went out the window long ago, not just in the US BTW).

]]> By: jck http://www.aleablog.com/repaying-tarp-us-changes-the-rules/#comment-3022 jck Wed, 06 May 2009 17:02:10 +0000 http://www.aleablog.com/?p=3285#comment-3022 Changing the rules repeatedly doesn't seem reasonable to me. They have done it before with Tier 1 made obsolete in favor of TCE. TARP money already makes it difficult to raise equity because of potential dilution a bit like a death spiral convert. Changing the rules repeatedly doesn’t seem reasonable to me. They have done it before with Tier 1 made obsolete in favor of TCE. TARP money already makes it difficult to raise equity because of potential dilution a bit like a death spiral convert.

]]> By: Carlomagno http://www.aleablog.com/repaying-tarp-us-changes-the-rules/#comment-3016 Carlomagno Wed, 06 May 2009 16:11:52 +0000 http://www.aleablog.com/?p=3285#comment-3016 Seems reasonable. Why should they cut the banks any slack while the need a crutch from FDIC? Seems reasonable. Why should they cut the banks any slack while the need a crutch from FDIC?

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