Via Memeorandum, the bailouts are beginning:
US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion of capital into Fannie Mae and Freddie Mac to stem the crisis at America’s biggest mortgage firms.
Under the terms of the proposed move, the US government would receive a new class of shares in exchange for the capital, which would be hugely dilutive to shareholders.
Can someone explain to me why the industry that refuses to be regulated appropriately always is the first one requiring a bailout? And shouldn’t any bailout be contingent upon structural changes to the industry? Why can’t we demand more openness and regulation (not something I really am a fan of- I think the less regulation the better, generally, but clearly the pendulum has swung way too far in the deregulation direction)?
I am tired of people enjoying years of vast riches based on Ponzi schemes and then having the government have to bail their stupid asses out. And really, as I do not understand many of these business practices, that is how I see it. A big Ponzi scheme, and the taxpayer is the last investor before the whole fraud is exposed.