Can someone translate Kathleen Pender's latest article for me (It is in english)

BUt it treads abit ambiguously to me. Her article today in the SF Chronicle has to do witht he streess tests and the manner in which the banks might "Convert" their stock.

Here are the four paragraphs - the one I am least sure of is paragraph three:

Kathleen Pender Will they be forced to raise new capital, by selling assets or convincing investors to buy more stock? Or will they be able to simply convert one type of capital (preferred stock, including the government's stake) into another (common stock)?

Raising new capital would strengthen the institutions and create a bigger buffer against losses between shareholders and everyone else with a claim on the bank, including depositors and bondholders.

Converting preferred into common stock doesn't increase overall capital, but it would let the banks conserve cash by eliminating preferred stock dividends. The conversion, however, would put U.S. taxpayers at greater risk: They would lose their preferred stock dividends and have a lower priority claim on a bank's assets if it failed.

Banks that convert the government's preferred stock into common also will have to put up with the government playing a bigger role in their companies because the preferred has no voting rights but common does.

If they can convert preferred shares to common stock, they stand to save money because preferreds (typically, as there are exceptions) must pay dividends before common shares do. If they can eliminate that requirement, they can save money. Many preferred shares have a specific maturity date, just like a bond and they mature at $25.00 per share, typically. The downside is the standing preferreds have in a liquidation (bankruptcy) is ahead of common stockholders. Giving up that standing means you are likely to get less if anything at all in a bankruptcy proceeding. The upside is that common stock has voting rights and the potential to rise in price higher than preferreds do.

Nice quality to possess.

So what about this: if it falls to this nation that these investment firms/banks do this, and make the preferred stock into common stock, who will then exercise the voting rights?

And how do we, as owners of that stock, have protection that we don't see more "Business as usual" in other words, votes that aid and abet those who are using AIG as a Pass through and helping Goldman Sachs more than the nation as a whole?.

Presumably, the United States Treasury, if they are indeed the shareholders.

I would suspect little more than political pressure. The pressure on the Obama administration to get all this right is massive. The consequences of them getting it wrong or screwing up to the point that Democrats lose elections are also dire.

By the way, thanks very much for the compliment. You are very kind to say so.

First they didn't need the money, we were told. Then we were taken for a $700 billion ride and given the preferred shares as alleged compensation. Now our preferred shares are being converted to common to effectively give these banks many tens of billions more, with NO compensation.

We're getting robbed, and they think you are too stupid to figure it out.