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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: posthumousone who wrote (160441)	10/27/2008 8:41:52 AM
From: ChanceIs	Respond to of 306849

>>>I still don't understand....is this good for their stock???<<< One of the experts at the AEI - conservative, free-market, think tank - addressed this matter. He reasons that when the market sniffs a bailout, the more clever folk buy a bank's bonds and short its stocks. They do this because the bonds are now backed and less likely to suffer a default. The stock will be diluted by the preferred (assumed convertible) and/or warrants. So in theory (xounds good to me) that which the government is trying to prevent (market collapse) is fostered by its actions. Unintended consequences.