>> But we've *already* guaranteed all bank liabilities.
>
> By no means. What happened at Citi was a forced debt equity swap for
> large holders of preferred shares. They took a huge hit. And we've
> given absolutely no guarantee we won't do that again. Fear over
> unsubordinated debt is rampant. That's why -- unlike in the Swedish
> case -- nobody is investing in banks or lending them money.
I don't understand this. Nobody was forced to do anything. Geithner called up a bunch of preferred shareholders and asked them to convert early. They took a huge hit because they bought convertible bonds in a bank that's now insolvent. Or am I missing something?
[I'm way overposted, so I'm out.]
SA