http://in.reuters.com/article/2012/07/10/spain-banks-idINL6E8IA9UQ20120710
As per the draft Spanish Bank bailout proposal - the preference shareholders and subordinate capital debt hybrid investors are to take a 90% cut. WHAT I dont understand is that why have the equity shareholders been spared?
Ideally the entire equity shareholders should have been wiped off and then the preference shareholders should have been wiped off and all subordinate capital debt holders to be automatically converted to equity - alongwith the bailout funds - also as equity instead of debt.
Instead of this the crooks in the EU have allowed the equity shareholders to go scot free whereas the debt holders have been penalised before the equity share holders - makes you think which is the risk on and which is the risk off asset!!
As per the draft Spanish Bank bailout proposal - the preference shareholders and subordinate capital debt hybrid investors are to take a 90% cut. WHAT I dont understand is that why have the equity shareholders been spared?
Ideally the entire equity shareholders should have been wiped off and then the preference shareholders should have been wiped off and all subordinate capital debt holders to be automatically converted to equity - alongwith the bailout funds - also as equity instead of debt.
Instead of this the crooks in the EU have allowed the equity shareholders to go scot free whereas the debt holders have been penalised before the equity share holders - makes you think which is the risk on and which is the risk off asset!!
Posts
just understand it from the perspective of the termites- they r the equity shareholders. they go in, destroy the edifice while getting paid for it and then after sucking it dry of all possible cash and assets they will render it useless, make it go under and then come back with all the stashed away cash and make it another "private takeover" and infuse the "consultant money they got paid to destroy it" and do it all over again. With each spiral twist, the costs escalate and the hole gets deeper.
ReplyDeletethe meenakshi - the enlightened one!! :-)
Delete