Fannie & Freddie - and Others - Overstate Their Capital Base [View article]
Some investors buy shares and they get wiped out.
Other investors buy debt and they are protected by Uncle Sam.
Some, but not all investors in preferreds apparently will also be protected by Uncle Sam.
I fail to see the logic or the equity of this solution. Why are debt buyers and selected equity buyers worth protecting? The only logic behind such discrimination is that financial institution, national and foreign should get preferential treatment while the hoi polloi can go to hell. Some of the hoi polloi with deep pockets should sue the US Treasury Department maybe even use a class action suit.
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Some investors buy shares and they get wiped out.
Sep 07 11:56 am
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All Comments by captainccs »Fannie & Freddie - and Others - Overstate Their Capital Base [View article]
Other investors buy debt and they are protected by Uncle Sam.
Some, but not all investors in preferreds apparently will also be protected by Uncle Sam.
I fail to see the logic or the equity of this solution. Why are debt buyers and selected equity buyers worth protecting? The only logic behind such discrimination is that financial institution, national and foreign should get preferential treatment while the hoi polloi can go to hell. Some of the hoi polloi with deep pockets should sue the US Treasury Department maybe even use a class action suit.