According to research by our government, it will be very possible to stretch out the funds from the financial bailout if the stock was converted from preferred (read: silent partner) to common (read:voting). This gives the government controlling share in several banks receiving TARP funds. To clarify, as the article does, preferred stock is like a secured loan, common stock is like what you and I trade and has the complete potential to lose all value if the company bankrupts. There's a lot of risk for us all in this and also sets the stage for all further necessary funding in order to keep the gov from losing that money when the company bankrupts.

I recall a statement from our fearless leader that his administration was in no way considering anything close to nationalization of these banks. So much for that.

And here's a nice lefty source for you. I know if it came from Fox I'd hear nothing but bs.

http://www.nytimes.com/2009/04/20/business/20bailout.html

People only have attention spans as short as flies.


As for the switch to common stock, I believe I have posted this already....

Anyway, the reason they will switch from preferred to common stock is because they need the voting power. What for?

Right now, the government can only hyperinflate this economy if banks are coming along.

Government controls two out of three important points in money creation process. Let us recall: 1-Creation of monetary base, and 2-manipulation of interest rate.

The point number 3, the propagation of newly created monetary base into economy is at the mercy of banks. Thus, as long as banks are bankrupt, the government is caught in check mate and cannot efficiently hyperinflate out of trouble.

Once they get the voting power, then they will force the boards to initiate lending of newly created monetary base under molested interest rates. Bingo.

Weasels in the hen house, not foxes!

excellent

We can't catch the great uncatchable Hussein on some little lie. He said he wasn't considering..., now he will do it unconsidered!

See??? No lies!

Steps and phases.
I gotta' admit. I'm just a dumb old Redneck when it comes to what ya'll are talking about.
From the get go, this economic crisis almost feels man made, a manipulation by two Govs., Europe and the US.
Am I close or is it a thing that just happens naturally like an ocean tide?

Saddam Hussein was lying about the WMD?

Aliens are behind it

No Sir. It is all man made and designed to happen. If you read the history of America prior to installment of unconstitutional money by communists in 1913, you will see that free markets do not create crises.

The very reason one would chose to have a fiat money system is to be able to affect the markets, that otherwise would be quite stable and uneventful.

Ask Fanta. He will tell you that the reason we have fake money is to smooth out the ups and downs in economy. What he doesn't know is that to even have those ups and downs one must be unconstitutional.

Unconstitutional money? The communists gave it to us? Can I buy unconstitutional stuff with it?

I appreciate the answer.

Now,for a solution. What, realistically can We The People do about the situation aside from sitting back and enjoying the ride?

As far as trusting BHOBNers, I'd seek the advise of my mule first. It's actually a jackass, I just didn't want to offend anyone.

Realistically (strictly), we can not do anything. Why? Because majority wants this to continue. It is good for them, in very fist approximation (at least so they believe). I have mentioned somewhere, that an average working man has lost about 120% of his wealth as compared to an American worker before the new world order of 1913. But, he doesn't know it since he isn't capable of thinking and the only easy material he is offered is the propaganda his school teaches him.

Philosophically, we can not do anything because to overcome any of the weaknesses requires knowing about it and a will power.

Most people will never know about it, because they have been denied good education by having offered a free non-education. They hesitated, but then they were told it is their right. With that, the offer seemed fair, and they accepted.

Will power is not applicable to democratic societies, only a dictator can have a role of a will power (and even then it must be a benevolent dictator).

Actually, the reason is that preferred stock is in fact a loan that is somewhat backed and allows legal action if unpaid. Common stock is not insured in the least so that essentially moves the money from the secured debt column to the unsecured debt column, effectively freeing more capital. Although, I'm sure there is the desire for power in the decision as well.

But like I said, if they go down, we're left holding the bag.

Sure! You can buy Senators, Congressmen and Presidents, happens all the time!

Good post as usual Andrew...

Looks like we agree on mechanics of it, and the only difference is that you believe that the government wants to switch from preferred to common stock:

-- To amplify the wight of the subsidy they have already given.

while I believe that they want to do so:

-- To be able to hyperinflate away from debt.

We will see what the future will bring...

no, we're fully in agreement. I merely pointed out how their "reason" works out - and it does in fact work out mostly like they say it will. Control over the company and voting power on the reserve board is just a perk.