Quote:
Originally Posted by turbo6bar
They have to support the preferred shares, because not doing so would create more defaults/failures and the government would have to step in again. It is a case of pay now or pay later with interest. In other words, bend over.
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Yep, seems the decision is bailout the existing preferreds or wipe out the shareholders of a lot of banks and have the FDIC pick up the costs.
Either way we all get screwed on this deal. (Ultimately I don't see how the cost will be less than $100 Billioin at the least. At 5 trillion in mortgages a 1% loss due to forclosure is $50Billion + the above mention $55billion in pfd's & Sub-deb. )
Certainly things don't look good. Currently 2009 As reported EPS and Opertaing EPS for the S&P 500 carry a 40% spread! Wall St. expects many more wright downs for 2009.
