by Afferent Input
The US Treasury will announce this morning an investment of $250,000,000,000 into the US financial system. Half of that will go into nine of the largest banks in the US. The rest will go to smaller banks and thrifts. Here are some details:
The preferred stock that each bank will have to issue will pay special dividends, at a 5 percent interest rate that will be increased to 9 percent after five years. The government will also receive warrants worth 15 percent of the face value of the preferred stock. For instance, if the government makes a $10 billion investment, then the government will receive $1.5 billion in warrants. If the stock goes up, taxpayers will share the benefits. If the stock goes down, the warrants will be worthless.
I’ve always wanted to have my very own bank…