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Now I'm really confused...
Old 02-27-2009, 09:23 PM   #21
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Now I'm really confused...

Today was a bad day for Citi preferred stockholders...or was it?
Citi to Exchange Preferred Securities for Common, Increasing Tangible Common Equity to as Much as $81 Billion
"In connection with the transactions, Citi will suspend dividends on its preferred shares. As a result, the common stock dividend also will be suspended. The company will continue to pay the distribution on its Trust Preferred Securities and Enhanced Trust Preferred Securities at the current rates."
I've been scanning articles for the last hour. I can honestly say I'm more confused than when I started, at least about prospects for the larger group of bank preferreds. (Most took a modest haircut today.)

Today Citi had several preferred share classes trading with volumes in the 10's of millions, so the speculators and arbitrageurs were having some fun.

Investing in (big?) bank securities of any kind is becoming more speculative by the day...
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Old 02-28-2009, 04:42 AM   #22
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Quote:
Originally Posted by Htown Harry View Post
Today was a bad day for Citi preferred stockholders...or was it?
Citi to Exchange Preferred Securities for Common, Increasing Tangible Common Equity to as Much as $81 Billion
"In connection with the transactions, Citi will suspend dividends on its preferred shares. As a result, the common stock dividend also will be suspended. The company will continue to pay the distribution on its Trust Preferred Securities and Enhanced Trust Preferred Securities at the current rates."
I've been scanning articles for the last hour. I can honestly say I'm more confused than when I started, at least about prospects for the larger group of bank preferreds. (Most took a modest haircut today.)

Today Citi had several preferred share classes trading with volumes in the 10's of millions, so the speculators and arbitrageurs were having some fun.

Investing in (big?) bank securities of any kind is becoming more speculative by the day...
The big difference is between preferreds and trust preferreds. The trust preferreds are really pseudo-bonds. The company will issue bonds into a trust. The trust will be broken up into $25 units (usually) and sold. C is going to be paying the trust preferreds because they are really bonds.

My closed end funds are being hammered again. My typical loss from last February is over 60%. The losses had gotten down to under 50%.
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Old 02-28-2009, 06:48 AM   #23
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I have been so thoroughly confused by this whole economic mess that I have done nothing since my original post. On Thursday, I decided I would go into bank preferreds and then this Citibank craziness yesterday put me back on the sidelines. If the Feds take over the banks I'm not sure i want to get involved no matter how they phrase their position. I don't trust them to do any better at running these banks then the idiots before them. I also don't understand how the gov't can think that by threatening to takeover, that it will help these banks raise capital from private investors. The market demonstrated that yesterday. So I am back sitting in the corner with my thumb in my mouth, ondering it all.
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