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Reply #64: Well, They DID Manage to Turn It All Better for a bit there, didn't they? [View All]

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TheWatcher Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-25-09 03:50 PM
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64. Well, They DID Manage to Turn It All Better for a bit there, didn't they?
Edited on Wed Feb-25-09 03:56 PM by TheWatcher
Here's Why The Fairy's Showed Up For Afternoon Tea, I think:

Treasury says big banks can get more bailout funds
Treasury says biggest banks can have immediate access to further support from bailout fund

WASHINGTON (AP) -- The nation's biggest banks are being granted immediate access to further support from the government's $700 billion financial rescue fund.

Treasury Department officials said Wednesday the new support will be provided through the government's purchase of preferred shares of the bank stock that are convertible into common shares at a 10 percent discount to their price before Feb. 9.

The preferred shares will carry a 9 percent dividend and be convertible at the bank's option, but subject to regulatory approval.

The option to convert the preferred shares into common shares is a change in the rescue program designed to give financial markets greater confidence.

Common shares absorb losses before preferred shares do, which means that under a stock-conversion plan taxpayers would be on the hook if banks keep writing down billions of dollars' worth of rotten assets, such as dodgy mortgages, as many analysts expect they will.

However, common stock in banks is incredibly cheap, and taxpayers would reap gains if the banks come back to health and the stock price rises.

More Fun At The Link: ...

Now, the reason that was given for the DECLINE prior to this was the Market was "disappointed" in Last Night's Speech because it provided little in the way of "details" of how things were going to be "Fixed" in the economy. (And I hate to ever agree with Criminals, but they were right on that one for the most part. Hopefully no one will read what's in the parenthesis, lest one of the "Truth Squads" arrests me for daring to question the words of His Holiness)

SO basically Mr. Market is sending us woeful commoners TWO different Messages today

1. From 9:30AM-2:21PM it was "Hey, Looks Like YOU Guys Are Screwed."

2. From 2:21PM-3:45PM: "But Hey, Daddy Just INCREASED OUR ALLOWANCE!"

When In Doubt- BAILOUT!

On Edit: The Dump At The Close is a bit worrisome. Maybe they spent those newly acquired funds ALREADY? Those Crazy Banksters. Always Impulse Buying.
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