Contrary to Reports, Obama & Treasury Doing Great Work

It seems to just be accepted that the TARP and other bailouts of American companies was a failure and cost taxpayers billions of dollars. This is a product, in part, of the incessant repetition of Republican talking points in the mainstream media. But not only are we getting paid back in full, we are making a profit for the taxpayers:

The Treasury said Thursday it sold 272.17 million warrants in an auction held because Bank of America and the government could not agree upon an acceptable price. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price. Link

The $1.54 billion total is the largest amount raised from a single institution from the sale of warrants... Link

In the auction, Treasury sold 150.38 million warrants that it labeled "A warrants" with a minimum bid price of $7 per warrant. It received a price of $8.35 for each for those warrants. Link

What does this actually mean? The Treasury got a premium over their minimum price of $1.35 more than they asked for...which is a 19% premium over their minimum asking price. Or to put it another way...the Treasury made an additional $200 million for taxpayers on this transaction alone.

Linus Wilson, a finance professor at the University of Louisiana at Lafayette and an expert in stock warrants, said he would give Teasury a high grade for how it has handled the auctions so far. "These are great results. I think the auctions have had a significantly positive impact on the prices that Treasury has obtained for the warrants," Wilson said. Link