JPMorgan or Mr Dimon think they are smart?
Money for free and chicks for nothing (from a song)…. seems to be the maxim of JPM (Rothschild, Rockefeller) – well if they are such smart asses with the warrants I think the FED should release them from the burden to borrow money for zero interest and charge them the 10 year Treasury rate plus a premium as refinancing rate instead. Lets see how smart they are with that rate.
Its unbelievable buying Bear Stearns with rolling the risks to the taxpayers was not enough of greed already now they want to rip of the taxpayers one more time and claim Tarp money as a short term loan. without TARP and all the other multi trillion programs JPM would be bankrupt as all others – so shut the f,, up sit in your corner and become humble Mr Dimon.
All I can gather from this events is they have not only not learned anything they rather think they can screw around as they are pleased – just the entire system from a complete collapse who the hack has financed that ?
It was a huge mistake to go into this stupid warrant deals as its always trouble to determine ‘fair prices – they should have taken over determined amounts of stocks directly where it is no trouble to see the market value plus created a right to get directly involved in strategic board decisions ( not into the day to day business).
J.P. Morgan to Send Warrants to Market
By DEBORAH SOLOMON and ROBIN SIDEL
WASHINGTON — Several Wall Street firms seeking to buy back warrants held by the government as part of the $700 billion financial bailout are complaining that the Treasury Department is demanding too high a price, according to people familiar with the matter.
The Treasury has rejected the vast majority of valuation proposals from banks, saying the firms are undervaluing what the warrants are worth, these people said. That has prompted complaints from some top executives. J.P. Morgan Chase & Co. Chief Executive James Dimon raised the issue directly with Treasury Secretary Timothy Geithner, disagreeing with some of the valuation methods that the government was using to value the warrants.
The inability to agree on a price has already prompted J.P. Morgan to take the next step in a complex process to remove the warrants from the hands of the government. The bank has waived its right to buy the warrants and will allow the Treasury to auction them in the public market, which bank executives say will result in an actual market price.
“We’re very supportive of the Treasury’s process regarding the warrants,” a J.P. Morgan spokesman said. The bank said it took the action after the Treasury rejected its bid that was based on an independent appraisal.
The disagreement between banks and the Treasury indicates that the banking sector, despite being pilloried for its role in the financial crisis, is becoming increasingly confident in its dealings with Washington. Some banks have begun pushing back against some government initiatives, a move fraught with political risk.
It also is an indication of how tricky it is going to be for the government to extricate itself from its unprecedented investment in the financial sector. The U.S. has flooded the financial sector with hundreds of billions of dollars, most of which is expected to eventually be repaid and, possibly, create a profit for taxpayers.
Many banks have repaid their Troubled Asset Relief Program funds. But the government still holds warrants giving the U.S. the right to buy common equity in those firms for a set price. The warrants are difficult to value because they don’t trade and depend on an estimate of a bank’s future stock price.
Some banks argue they shouldn’t have to pay much, saying the government’s investment was essentially a short-term loan they accepted under duress to help stabilize the financial sector.
Others argue that the government shouldn’t be draining bank capital at such a fragile time. At least one bank has argued it shouldn’t have to pay the government anything at all.
But the Treasury is under pressure to extract as much money as possible for the warrants and avoid seeming to favor Wall Street over taxpayers. Lawmakers and the bailout’s independent overseers have warned the Treasury against settling for too low a price and robbing taxpayers of a richer return.
A Treasury spokesman said the government “has laid out a consistent and clear process for valuing warrants which is the same for all institutions, large and small. We believe our process goes a long way in protecting taxpayers.”
Dozens of banks are seeking to repay TARP and either buy back their warrants or have the government dispose of them through an auction. The government received warrants in more than 600 financial institutions when it bought preferred shares. Congress required the government to receive warrants, believing that would help taxpayers potentially profit from the investment.
Eleven small banks have repurchased their warrants. It is unclear exactly how much money is at stake, given the debate over valuation, but some independent valuations have placed the warrants at anywhere between $4 billion and $15 billion.