GO
Loading...

Auction TARP Warrants?

When America’s banks took Troubled Asset Relief Program money during the heart of the credit crisis, they also issued equity warrants to the government. These were derivatives that entitled Washington to buy a certain amount of shares of each company. The problem, though, is that no one knows how to value the warrants now that the TARP funds have been repaid.

The scenario can work out one of two ways: Either the banks underpay when they buy back the warrants, thereby ripping off the taxpayers, Cramer said, or they overpay and suffer penalization from the government. State Street bought back its warrants for about $11 when they probably should have fetched $15. Even JPMorgan Chase CEO Jamie Dimon said on his conference call today that he doesn’t know how the situation will resolve itself.

Cramer thinks he’s found a solution, though, and he shared it with Mad Money viewers on Thursday. Watch the video for his full report.

Cramer's charitable trust owns JPMorgan Chase.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book