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re: WHy the bailout???
Posted on 9/20/08 at 2:07 am to coloradoBengal
Posted on 9/20/08 at 2:07 am to coloradoBengal
quote:
Does this skew the Risk/Reward tenet of the Free Market and capitalism in general? If the poorly managed companies get bailed out, that seems like a complete violation of the "Corporate Darwinism" that is essential to the success of the free market.
Apparently that isn't true. Without these bailouts - the free market would completely fail. Unless you consider economic oblivion to be "success".
But don't worry about the risk/reward tenet being lost on shareholders. The shareholders of all these bailed out companies are virtually getting zeroed out. The difference between a bailout and no bailout for shareholders is the difference between losing 99.9% of their share's value and 100%.
As proof of this - would you like to buy 34 shares of Fannie Mae for $20?
This post was edited on 9/20/08 at 2:09 am
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