These capital injections into the banks are just like another Wall Street product that blows up, but like any Wall Street product, it's done incrementally, and like any Wall Street product, it's sold as good deal.
In this case, they pretend that the common will have value, and the banks won't be nationalized.
They talk about tangible common equity, because that's what they are going to "replenish." And now, the taxpayer, goes from a preferred position, to a position that is blown up!
And they take the shareholders down with them!
Now we have all this "brainpower" inventing more ways that the banks shareholders can get wiped out, while pretending the taxpayer isn't.
But we have a scorecard, and it's the stock market.
As zero hedge put it:
"Give me your toxic debt, your default mortgages, your worthless assets yearning to be offloaded on the taxpayer's balance sheet!"
But it's the only scorecard that Washington doesn't trust.
Except of course, if it's going through a late afternoon swoon, and then you'll hear that an announcement will be coming that will save the day.
Like they saved Citigroup!