Taxpayers did OK on Goldman, Buffett did better

Goldman Sachs has announced the redemption of its TARP warrants for $1.1 billion. Including dividends, taxpayers will have made a 23 percent annualized return on their TARP investment in the firm. That’s not bad considering the great terms Goldman received when Paulson issued the warrants in the first place.

Compare the terms to those Warren Buffett received when Berkshire Hathaway made a similar preferred investment in Goldman. We got a 5 percent dividend yield. Buffett got 10 percent. We were able to redeem our preferred shares for only 100 percent of their par value. Buffet can redeem his for 110 percent. The strike price on Buffett’s warrants is $115, the strike price on ours is $122.90.