Morgan Stanley repurchases TARP warrants

[FreakinDJ]

Source: Stephen Bernard, AP Business Writer

Morgan Stanley repurchases TARP warrants

Morgan Stanley buys back warrants tied to TARP from Treasury Department for $950 million

NEW YORK (AP) -- Morgan Stanley said Thursday it paid $950 million to buy back warrants from the government that could have eventually been converted to common shares in the bank.

New York-based Morgan Stanley issued the warrants to the Treasury Department as part of the loan package it received under the Troubled Asset Relief Program.

As part of the program, Morgan Stanley received $10 billion in funding from the government to help bolster its balance sheet as credit markets essentially shut down. In exchange, the government received preferred shares in Morgan Stanley and the warrants to purchase common shares.

-snip-

Between the repurchase of the warrants and dividends paid on the preferred shares, Morgan Stanley paid the government $1.27 billion.

Read more: http://finance.yahoo.com/news/Morgan-Stanley-repurchases-apf-807078386.html?x=0&sec=topStories&pos=5&asset=&ccode=

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Ok - Now what are the "Doom & Gloom" market reporters / "Short Seller Enthusiest" going to say now.

The Tax payers just got $1,27Billion Dollar return on their investment - Just like Obama said they would

Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling! Oh No - the Sky is Falling!

Oh BTW: Obama is very GOOD for my portfolio unlike Chimpy / McCheese Pants

[boomerbust]

1. I've been sayimg it all along

Obama stated which way He would take this country. You can whine like all the Cons or you can put your money on Obama. I prefer the latter.

[HamdenRice]

2. Let's give credit where credit is due: The heros here are Barney Frank & Gordon Brown

Paulson wanted carte blanche to spend the $750 billion or so however he saw fit under a 1 page bill.

Barney said, we have a weekend or so to write a bill, and we're going to disburse this money in a way that gives the taxpayer a good chance of getting all the money back with interest.

Barney wrote a 100+ page bill in a few days.

Some of us read it back then in its entirety and tried to tell DU that while it wasn't perfect, it stood a good chance of working AND paying back the taxpayer.

For that we were called shills, fat cats, and class enemies.

Then Gordon Brown decided that London would actually inject capital directly into the British banks rather than buy assets. Economists like Krugman wrote that this was actually a pretty good idea -- better than the purchase of TARP assets.

TARP was flexible enough for Treasury to modify its asset purchase plan to purchase preferred and warrants.

So now, thanks to Barney Frank, the Treasury helped save the financial system while turning a profit.

[Igel]

3. This is TARP, right?

The money that Morgan Stanley got under TARP last Ocrober? As part of the $700 billion that isn't part of Obama's deficit spending, even though he asked for the second half of it to be released "on his behalf" and seems to claim at least part ownership on all of it? Did Senator Obama really promise a $1.27 billion return on the money loaned to Morgan Stanley? Or was that Senator Obama's Treasury Secretary who said that? (

Details, details.

In any event, most of the banks/institutions likely to repay the money probably have. There's a heck of a lot of it out there still, and while */Bernanke and others stipulated that there'd be interest paid on the primary amount and options in addition to that right up front (to the naysaying of those who considered the TARP program a losing proposition) it's very likely that the program will end up deep in the red. A few haven't even made all their interest payments on time. Note that if Obama's praised for the current gains, when the losses are finalized and swallow up the gains will he get "credit" for that, as well?

Of course, the money was to go back to the Treasury--that's how you get the profits on the money, right? We'll see how much of it actually goes to the Treasury. Last I heard the money was almost all being repurposed.

Yes, I was a TARP supporter, and still think it was necessary for a few reasons. I think that jubilation over how great an investment it is is premature. No, I don't see a contradiction.