Marginal

Deciphering the Issue of Tangible Common Equity

A "forced" conversion of the government's preferred shares to ordinary shares may very well result in the same "forced" action for private investors in preferred shares of these institutions. At current common stock prices, this amounts more or less to a total wipe out of preferred shareholders - double pain preferred share- investors who purchased them for their fixed interest income under a quasi bond-like guarantee of payment of interest. Then came the nationalization of Fannie and Freddie and the government revealed itself as malevolent a financial adviser as any bank or mortgage broker. I am sure many other investors in preferred shares feel my pain: losing nearly all principal and a fixed income source that was only one or two percentage points above the same institutions' bond interest, but now seems so easy to wipe out. Continuing to issue this type of instrument to investors if the preferred shareholder's inherent risk is as high as that of the common shareholder amounts to misrepresentation. Why do preferred shares exist?

A Nation of Debtors

Finally.....Mr.Rafat deserves ownership of 20% of AIG's newly issued preferreds just for his sheer intelligence to state the obvious.
I have been wringing my head over outrage by politicians in the name of U.S. "taxpayers'" for the government putting them on the hook for speculators' debt..Mr. Rafat hits the nail on the head: The US government's foreign creditors would bail from all and any further future US investments and we'd be sitting on our trillion dollar deficit without any chance of recouping a penny from our trusted foreign sources.
when all is said and done, the government will reap a nice reward in m its preferreds' interest and me, Miss USA- AIG and Freddie 100 K shareholder ( the "Wall street speculator?") is the one who lost out --all I can do is consider it my patriotic sacrifice ...