Word: stockely
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...Answering the second question - repairing bank balance sheets - is neither simple nor clear-cut. What is clear is that the capital needed will not come (entirely) from private hands. Banks and policymakers will essentially have a few different options: banks can issue more common stock; policymakers can push more conversions of preferred shares (or liabilities) into tangible common stock of the troubled banks; or more capital can be injected using taxpayers money, effectively taking control and (partially) nationalizing the banks...
...Wells Fargo (WFC), and Bank of America (BAC) are troubled, as the government sees it, and will have to improve their balance sheets by a combined total of almost $60 billion. JP Morgan (JPM) and Goldman Sachs (GS) passed the tests and are free from any additional obligations. The stock market has been voting on which banks are in trouble. The price of the shares in each of the banks indicates that traders already knew which firms had problems...
...course, the government is hoping that the stress tests will be the beginning of the end of the bank crisis because they will raise confidence in these institutions and even give bank stocks a boost. As news of the results has trickled out in recent days, bank stocks have indeed shot higher as investor fear has subsided. But longer term a big issue remains: Investors need to know just what the government's stakes in these banks are worth since that directly affects what the investors' stake is worth. The government says the future stakes it takes in the banks...
...That raises a question for investors. If the government buys the bank's common stock outright, investors know how much their own stake is diluted. But since some of the preferreds may convert and others won't, investors are left with a less clear picture of a bank stock's worth...
...Unable to force Piech to give in, Porsche seems to have just run out of time. Its gambit to acquire VW cost Porsche dearly as it piled up a $12 billion mountain of debt to finance stock purchases. With the sports carmaker beginning to struggle under the weight of that debt, Porsche and Piech met in Salzburg, Austria on Wednesday to end the feud. Following that meeting, Porsche issued a statement declaring that the two companies aimed to "develop a corresponding basis for decision-making on the future structure of the common group...