Mike Shedlock comments on the WSJ’s reporting that the Fed Pushes Citi, BofA to Increase Capital:

The most likely ways for the banks to raise capital are via dilution of Treasury owned preferred stock at taxpayer expense and via the Public Private Investment Plan (PPIP). The latter is a scam to heist taxpayers to the tune of hundreds of billions of dollars.

Government officials stated today “that banks directed to raise more capital shouldn’t be viewed as insolvent.”

What else can it possibly mean when taxpayers have to pony up hundreds of billions of dollars every other month just to keep the banks running?

However as Rolfe Winkler points out, converting preferred to common will not raise the total amount of capital -just increase TCE.  The government will, as Mike says, have to put more in… unless they can sucker some private investors.