RiskTrade

Avoid Banks' Common Shares; Opt for Preferreds, Minibonds

Pointless Article. Buying pref rather then common makes little sense. Buying pref only caps your upside while really exposing you to the same risk as common. In a default pref holders and common holders both get nothing. Whats worse is that bank pref suffers from the risk of forced conversion to common. Further pref usually involves liquidity risk relative to the common. Also from a relative value perpsective it makes more sense to buy the sub debt rather then the pref.

Which Banks Will Survive?

This article omits most of the facts - AIG sold its 10 year deal on the basis of reverse inquiry i.e. investors asked for the issuance. The reason they asked for the deal is because AIG spread is indicative of a single B rated bond. AIG debt is great value for 4 simple reasons:
1. You are buying a AA rated credit at mid B levels.
2. AIG's business model is not at risk.
3. Leadership and operating performance have been weak but both are being addressed via new leadership and attempts at cleaning up the balance sheet.
4. Eventually, CDO's and other structured instruments will find a floor and a bounce will occur. I don't know when that will happen. I do however know that once a floor is found you will see that previous write downs were too conservative and hence AIG and others will actually record a mark to market gain on some of these assets.