Tuesday, May 05, 2009

News keeps scrolling --- Stress tests, Chrysler dissidents

The government's bank Stress Test results are to be released on Thursday, so what is this flow of news from "sources familiar with" that keeps coming out. Tonight it's focused on Bank of America as the bank most in need of capital, Citibank needing it but not as much as BofA due a planned conversion of government preferred to common, and JPM being in the best shape of those three giants, in fact needing no new capital over the next two years. We have also learned the no banks can repay TARP money if they can't raise funds in the market without an FDIC guarantee. There is not much news here, except for the apparently definitive statement on BofA. The biggest news is this Stress Test info is leaking like the gutter over my patio. And I really need to get that fixed.

Other news, not leaked or anything but extremely interesting, is that the dissident unsecured investors in Chrysler that are trying to block the deal will be required by the Court to make their identities public by 10am tomorrow. Whether they have credit default swaps and are trying to force the company into liquidation or whether they are more vintage vulture debt investors that thought they would be able to wrangle some equity stake, who knows, but there will likely be some usual suspects.

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