To Boost TCE, U.S. May Convert Past Bailouts to Equity

``To make its existing dollars stretch as far as possible, NYT is reporting that the administration may convert previous TARP bailouts, which came in the form of preferred shares, into common equity, thereby boosting tangible common equity. This is not good news for taxpayers; with preferred shares in hand, they currently outrank common shareholders in the capital structure. Common equity, in other words, is in the first loss position, which means they have to absorb all losses on the asset side of the balance sheet until they are wiped out.''