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October 28, 2008




Been traveling and I hate typing on a bberry. Almost came to the race Sunday, but didn't quite make it. Haven't really looked at the MS MUFJ deal too much, but that does sound very peculiar. Especially when you look at the amounts they are raising.

Issuing ~USD3bn through preferred and registered to raise around ~6bn more in common within a year. Coincidental perhaps, but together thats roughly what they paid for the piece of MS.

Dilution is substantial but look at the rates MUFJ preferred is paying on their preferred!

Look at their press 3 releases from Oct 27. First one: we have not decided to raise capital at this time. Second one: we are issuing 3bn in preferred. Third one: we may (and probably will) issue 6bn in common on top of what we just did.

10% preferred, convertible with US government backing? Excellent for the Japanese, but what the hell was MS thinking? Could this deal have been forced to inject confidence into the system?


RP...where you been? Something just doesnt add up with that whole deal. It was weird enough when they paid what they paid for 21% of MS. And then there was the vague reference that Tsy was going to "protect" MUFJ's investment. I was not sure how they weren't going to dilute them with a 10bn capital buy. But now MUFJ is raising capital and diluting the crap out of its shareholders in this mkt? Something doesn't add up right?


It would be absolutely amazing if we dodged two massive asset bubbles without any serious damage to the greater economy. Is this really possible? Something does not feel right, it is time to do some cooking. I'm going to fire up my Ouija Board and see what Milton thinks.

Also, please share the new MS-UFJ perspective. Does it involve access to the government asset purchase programs and the lending windows?

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