I was on the conference call with the Treasury officials tonight, and listening to the official who opened the call (I didn't catch his name) talk about the warrants, I got the distinct sense that the Treasury isn't planning to take significant warrants from institutions that voluntarily participate in the "market mechanisms" (i.e., auctions). The text of the bill only requires the Treasury to take equity warrants from an institution voluntarily participating in the market mechanisms when the institution sells more than $100 million into the Treasury fund, and even then the amount of warrants required is left to the discretion of the Treasury. But the official seemed to suggest that companies that sell more than $100 million into the fund still wouldn't be required to issue significant warrants, because the Treasury wants to go out of its way to avoid discouraging private capital injections. He kept emphasizing that the Treasury has significant discretion in determining how much equity in the form of warrants will be required; he also emphasized more than once that the Treasury doesn't want to scare away private capital. The message seemed to be that the Treasury will take equity warrants in institutions participating in the market mechanisms, but that the amount of equity warrants will be small enough that the dilution will be de minimis. On the other hand, he suggested that the Treasury is planning to take significant warrants when it makes "direct purchases," but that such purchases would be limited to failing institutions. Bob Hoyt, Treasury's GC, later said that when the Treasury makes direct purchases from failing institutions, it will "run the same play" it ran with Bear Stearns and AIG. That is, shareholders get wiped out. That's what I took away from the call, anyway.