Monday, October 13, 2008

Banks underperforming today

Many bank shares are down or up far less than the broader market. I wonder if they are anticipating tomorrow's announcement of the U.S. plan to recapitalize banks. The plan could include punitive measures to existing shareholders, as we saw with AIG and Fannie/Freddie.

On my radio show today I spoke with William Isaac, who was the former chairman of the FDIC. He said that any plan that includes wiping out existing bank shareholders would be "a terrible mistake."

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