Investors who backed the recent drive by US financial companies to raise capital are sitting on nearly $10bn in paper losses amid a continued slump in the sector’s shares, an FT analysis shows. The negative returns suffered by investors are likely to make it more difficult and expensive for US financial groups to tap equity markets if, as expected, they are forced to raise more capital. Investors who bought the $65bn-plus in common and convertible shares issued by large US financial institutions since last October have seen their total investments fall by more than $9.7bn – a negative return of about 15% – according to an FT analysis of Dealogic data.
[…] “Investors who backed the recent drive by US financial companies to raise capital are sitting on nearly $10bn in paper losses amid a continued slump in the sector’s shares, an FT analysis shows.” **** - I wonder how long it will be before they get that back? 5, 10, 20 years? « Garfield Minus Garfield […]
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I’m amazed that they managed to find these foolish investors in the first place.
And that does not even account for the loses on the US dollar over that time. Who believes the bull about dollar recovery? The dollar has disappointed so many times and is not about to recover in a high inflation and recessionary economy, see this blog post for more ideas: http://arabianmoney.net/2008/06/16/bernanke-and-paulson-talking-bull-to-support-the-dollar/