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I am not convinced that the bank's share price is the good measure for a (partial) nationalization success. After all, the shareholders will probably get wiped out, even if the bank itself will become more solid, so there is not much incentive to buy those stocks.
by Deni on Wed Oct 8th, 2008 at 09:45:24 AM EST
[ Parent ]
... combine that with the loss of opportunity to distribute revenue that you pretend is net revenue by ignoring systemic risks and the loss of opportunity to make income from the real productive economy because you are not in a position to lend and with a steep recession kicking in, they are a bad credit risk to lend to ...

... multiply the expected loss in shareholder equity by the dilution of the private shareholder's share in equity, and banking stocks out to be plummeting.

The measure of the success of any system is not in the equity markets, but in the credit markets.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Oct 8th, 2008 at 02:26:42 PM EST
[ Parent ]

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