Sunday, November 16, 2008

Gaming The TARP "Pay $10m, get $3.4bn of funding?"

That is what is happening when you have opened Pandorras Box...... You really cannot blame Hartford for using all the loopholes......

Das passiert folgerichtig wenn man einmal damit angefangen hat Pandorras Box in Form von Markteingriffen auf Wochenbasis zu öffnen..... Ich zumindest mache Hartford nicht den geringsten Vorwurf all die Schlupflöcher zu Lasten der Steuerzahler zu nutzen..... Aus deutscher Sicht besonders erfreulich da sich hier abzeichnet das die Beteiligung der Allianz jetzt doch nicht ganz so schnell gegen Null tendiert ( siehe Postingende )......

Corporate Welfare by R.J. Matson Barry Ritholtz

FT Alphaville

Nov. 14 (Bloomberg) — Hartford Financial Services Group Inc. said it’s buying a Florida bank [Federal Trust Bank] for $10 million so the insurer can be eligible for the Treasury rescue program.

Hartford, based in the Connecticut city of the same name, expects to qualify for $1.1 billion to $3.4 billion under Treasury guidelines, the company said in a statement distributed today by Business Wire.
What blatant abuse. From the the statement:

“We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability,” said Ramani Ayer, The Hartford’s chairman and chief executive officer. “Securing capital at the terms available through the Capital Purchase Program could be a prudent course in this market environment and would allow us to further supplement our existing capital resources.”
(Translation: Pay $10m, get $3.4bn of funding? Where do we sign?)

> Here are the terms of the Allianz capital investment just 4 weeks ago......

> Nachfolgend die Bedingungen zu denen die Allianz noch vor 4 Wochen Kapital zur Verfügung gestellt hat.....

The Hartford Closes On $2.5 Billion Investment From Allianz SE

The Hartford Financial Services Group, Inc. (NYSE: HIG) today announced the closing of a $2.5 billion capital investment by Allianz SE.

Under the agreement, Allianz has purchased, at $31 per share ( Stock Friday $ 12,65 ), $750 million of preferred shares convertible to common stock after receipt of applicable approvals, and $1.75 billion of 10% junior subordinated debentures.

The debentures are callable by The Hartford at par beginning ten years after issuance. Allianz SE also received warrants which entitle it to purchase $1.75 billion of common stock at an exercise price of $25.32 per share, subject to shareholder approvals. The warrants expire in seven years. The Hartford had announced the deal on October 6.

I want to close this post with a quote from the WSJ that isn´t quite "promising".....

Am besten beendet man dieses Posting mit einem Zitat aus dem WSJ das einen nicht gerade hoffnungsvoll in die ZUkunft schauen lässt......

Congress: Treasury Messed Up the Bailout. Let’s Give it More Power.

So says Congress: Treasury has done a terrible job of managing the bailout. That’s why Treasury should get expanded authority — for instance, to approve bank mergers.

Such paradoxical statements make perfect sense to some Congressional leaders, including New York Democratic Senator Chuck Schumer

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Blogger jmf said...

San Jose to Request $14 Billion from TARP
via Calculated Risk

San Jose Mayor Chuck Reed said Friday he's working with leaders of other large California cities to make sure they're not left behind.

The stimulus package Congress passed last month wasn't designed to dole out money to governments, so it's far from clear whether San Jose will get a piece. But with $1.6 billion in unfunded retiree health care obligations, plus $500 million worth of local and regional road work to be done and the $750 million price tag to bring BART to the South Bay, Reed noted the city has a full slate of needs.
Reed created a minor furor Friday when he told an Associated Press reporter he would seek 2 percent of the bailout, or $14 billion, for San Jose — an eye-popping figure, given that the city's entire annual budget is $3.3 billion.

2:18 AM  
Blogger jmf said...

Toro On The TARP

Great interview this morning on CNBC with Eric Hovde on the chaos known as TARP. I highly suggest you watch it.

I especially like the comment about the "35 year-old technology investment banker from Goldman" running the program.

I hope Obama does not appoint any of these clowns from Wall Street to run the Treasury. They have totally screwed up the global financial system not to mention destroying Wall Street as we know it. We don't need them screwing up the government bailout, which is what they appear to be doing.

Go to the link to see the CNBC clip....

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