satyr

Bank Dilution Looms for 2010

A few things could use some qualificaiton or clarification here. First off, the current problems in commercial real estate are not so much the result of poor underwriting as the falling value of the assets. I would not blame underwriters for not anticipating that collateral would lose 30% of its value. Second, it should not be assumed that capital levels will be bolstered by stock sales. There are other means for accomplishing this, so until a financial institution announces a stock sale, I would not suppose it. And, third, when a company sells shares, it does not necessarily result in dilution, other than in the very short run. Remember, they get cash in return for the shares, and this is a new asset owned by all shareholders. In turn the cash will be exchanged for other assets that generate income. This should not be characterized as a negative, because if capital is properly deployed, it is actually a benefit to existing shareholders.

25 Companies That Lost America Nearly $1 Trillion

Quite a lot of distortion here, both in terms of facts and interpretation of them. Enough said, I think.