The reason is purely tactical and personal. I've recently levered up to buy Arizona real estate at distressed prices, and I've stretched doing that about as far as I can swing. Which isn't merely a different call on an asset return; I now live there etc.
My standing recommendation on playing the whole crisis is to buy the senior securities now, bonds and preferreds, and use the coupons to buy common. This will average in to the latter at depressed prices over the right time scale. Do not touch the high quality bomb-shelter fixed income things (like treasuries, CDs, etc, with rates at zero). The credit markets will recover first.
Uh-huh.
By the way, I caught this in another post:
Incredible amounts of populist pressure not to be seen helping the banks in any way. It is idiocy, but it is the political reality of the moment. Has been since Bear Stearns day, really. All the top regulators know what it actually required, but they think they need populist political cover to do any of it, and the bomb throwers in the gallery do not care a lick what they burn down, as long as they can cast the blame elsewhere. It is just epic irresponsibility fighting political weak technocrats.
So the trillions spent in attempting (so far unsuccessfully) to recapitalize banks in TARP I and Son of TARP doesn't qualify as "help"?
You crack me up.