With the Guv’t taking partial equity positions, Why hasn’t Wall Street and the ratings agencies and investors realized existing equity positions have now been diluted? and share prices go up after the capital infusion? Why?
Another point,
If we consider the off balance sheet liabilities these banks have as a “shadow liabilty” the banks’ do not recognize until it is comfortable/less damaging to them, Can the infusion of Fed captial now be considered a “shadow equity” position?
Finally,
Considering how senators et al, have summer vacations on tax payer money with no regrets, how can we expect them to exert any force, control or expect any change in a banks’ behavior simply by saying ‘we have an equity stake in these institutions now’?
