Investors are concerned that if the government takes control of troubled banks, shares in these companies will become worthless.They are afraid their stock will be worthless.
"Well if you're an investor -- with all this talk of nationalizing banks -- if you're a shareholder in xyz bank, the fear is if it gets nationalized your stock goes to zero," said Art Cashin Jr., managing director at UBS Financial Services. source
Allow me to say something incredibly stupid right. Investors are worried that the government will nationalize banks and so this is reflected in the market indexes going down. The result of market indexes going down is that right now stock prices for several of the world's largest banks are practically worthless.
In other words, investors' fear of nationalizing banks is causing the market to fall and banks stocks are now practically worthless. Yet if banks are nationalized, these same investors are afraid that the stocks will be worthless.
OK is it just me but this makes no sense. They are getting the same result either way i.e. the stocks are worthless. Now one might think that you would want a rise in stock value to offset a fear of nationalizing banks.
Reuters: Nikkei falls 1.4 pct after Wall St hit by bank fears
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