The Hammer makes offer the nine families can’t refuse
Bob Morris @ Oct 13th 2008 19:53 - Category: Credit crisis
Nine major banks will recapitalize via preferred stock from Treasury. They were not given a choice. And there will be compensation restrictions.
Right or wrong, the hammer just came down. The only question: How hard?
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reader on 13 Oct 2008 at 9:25 pm #
I’m wondering how much of this is just an outright theft carried out by Bush and his gangsters. This stuff is unbelievable, only it’s very, very real.
Where will we be when the dust clears, or will it?
Bob Morris on 13 Oct 2008 at 10:19 pm #
Actually, this is much better than the original deal, which was to buy the glop at inflated prices. With preferred stock, the government gets an interest payment as well as ownership, plus options on stock at a set price, and it goes to the head of the line when it comes to repayment.
They have to get the credit markets unfrozen in the next week or so or else there will be business bankruptcies. California, for example, might need emergency loans because it can’t sell bonds now like it always does to get money in the Fall until income tax payments come in the following Spring.
There are reports that ships can’t unload goods because the bank in the receiving country won’t honor the letter of credit.
That’s how locked up things are now. The central banks of the world have to break the logjam.