New Bank Offerings are a Crapshoot - Buyer Beware

http://www.OurHussein.com ^

[publius321]

The banks are issuing secondary offers as high as $34 BILLION in the case of Bank of America. Investors who are willing to throw additional billions to these banks in new offerings like this one are basically engaging in a “crapshoot”. I say that because the Obama Administration is making up the rules as they go. Think about it. Nobody told the banks when they took the TARP that they might not be allowed to pay it back. Nobody told them BEFORE they took the money that if they did take it, their salaries would be capped at $500,000. Nobody told them there would be “stress tests”…

My point isn’t to issue judgment on the virtues of any of those particular policies. My point is that it is the pinnacle of idiocy to buy shares in a company when their new “partner”, the Obama Administration – makes up the rules as they go along and nobody can do a thing about it. THAT makes this new issue a crapshoot because TODAY – by TODAY’S RULES – the new issue will help them with their desired goals. Next week, there may be a whole new set of rules – especially if the administration really wants to control the large banks. This may be little more than an elaborate charade.

For more on this READ: May 8, 2009 "Organized Crime" is Alive & Well (The Real Goodfellas) by MrArbitrage at www.OurHussein.com

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[silverleaf]

when the crap rolls downhill, we can now all see the position that will be held by purchasers of bank stock and bonds (err, greedy selfish obstructionist investors)

Let this short sighted demagoguery reflect on the long term value of the assets held by the unions to secure their benefits and retirements

[EGPWS]

The banks are issuing secondary offers as high as $34 BILLION in the case of Bank of America.

Pretty risky for a bank such as B of A when they are hurting for cash without an investor to back them. /s

[publius321]

and VERY risky for the investors who buy the newly issued shares. Talk about uncertainty.