Twofish's Blog

January 18, 2009

Postscript to letter to shareholders of Chinese banks

Filed under: china, finance — twofish @ 11:28 am

Victor Shih wrote a hypothetical letter to from Chinese banks to shareholders:

P.S.: If you don’t like what we are doing then you can kindly buy shares of a Western bank, who are in worse shape than we are, and are going to be forced over the next few months by their governments to be doing exactly what we are being forced to do right now.

We know that we have had our difficulties in the past, but your experience as a minority shareholder in a state-run nationalized bank will no doubt come in handy when Western governments start nationalizing their banks and turning them into state-run entities.

That is of course assuming that there is any shareholder equity left in any of their banks once all of the losses come out, or that when Western government nationalize their banks, they don’t end up massively diluting if not totally eliminating the value of the shares you bought before the nationalization.

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