yourdeadmeat69

A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan

Reducing the value of preferred and common to junk is appropriate, and probably understood by the last six months of investors, who have turned over this entire float at least three times. Maybe there are some institutions out there with $70 shares still on the books, but most retail folks are in these firms around $7-10 or so if they are still holding.

There will be a stampede tomorrow by folks who'll bolt in either direction, first to think this is some kind of new guarentee, then those that read the fine print and find out, govt GSE preferred is WORSE than private banking preferred, a quote from Paulson, traditionally lost probably SEVENTY YEARS.

After all, he just found out via JPM this is a "flawed model" and S and P took till conservatorship was announced to downgrade the stocks. Now that takes genius, doesn't it?

The truth, the common and preferred will be all over the place.