Bloomberg reports:
Federal Reserve Chairman Ben S. Bernanke rejected the idea that officials plan to use reviews of banks’ balance sheets as a pretext for government takeovers of the nation’s largest lenders.And financials roared....
The Treasury will buy convertible preferred stock in the 19 largest U.S. banks if stress tests determine they need more capital to weather a deeper-than-forecast recession, Bernanke told lawmakers in Washington today. The shares would be converted to common equity stakes only as extraordinary losses materialize, he said.
“I don’t see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when it just isn’t necessary,” Bernanke said at the Senate Banking Committee hearing.
Source: Yahoo
Jake - Financials roared but they roared off a much smaller base so lets not go crazy here.
ReplyDeleteBen is sticking his head in the sand. Nationalization will come sooner or later...
if you invested $1 in any of these firms at monday's close, you got these returns yesterday, regardless of the smaller base
ReplyDelete