The government wants the insolvent big banks to raise more capital but it is making it impossible for those hapless institutions to do so.
Given the government's involvement with, and upending of established law in the case of Chrysler, why on earth would anyone invest in any enterprise in which the government is or may become interested? There is no basis on which anyone can have any confidence in what rules may apply going forward.
One can rely only on tangible in-hand possessions with intrinsic values.
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We have now seen the Obama administration take over Chryler and GM with taxpayer funds and give the companies to their union constituants, totally screwing the bond holders in the process. The status of a secured creditor no longer has any value. I believe that these actions will have a serious impact on the credit and equity markets and any prudent strategy needs to consider this new risk.
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