Oh, dear. It seems likely that that middle thing Paulson decided, buy preferred shares because the Germans and Brits said that's smarter, wasn't the right thing to do. Now private investors STILL don't know what crap is on the books at financial institutions, and they don't want to invest as lesser creditors, absorbing the real losses.


Nov. 20 (Bloomberg) -- The U.S. may need to spend another $1.2 trillion to recapitalize the eight largest financial institutions and stabilize the markets because private investors won't take the risk, an FBR Capital Markets analyst said.

``The sheer size of the capital deficiency, coupled with the opaque nature of credit risk, will keep private capital sidelined,'' Paul Miller said in a research note yesterday.