Oh Crap, things are just getting worse
Banks and lenders are continuing to have rough times and things seem to be getting worse. Was it not last week that spokes people for Fannie and Freddie said that they were able to deal with their troubles and were adequately capitalized??? What the heck happened over the weekend? Someone finally got around to balancing the corporate checkbooks? (I know it is not that simple)
“White House, Fed will rescue Fannie, Freddie
Government-sponsored lenders are too global to go under, Paulson says“
These two company’s stock (FNM FRE) have cratered – seriously. I wounder how much longer before the bargain hunters come out to give it some support? (An opportunity? No clue and I am staying out of this mess.) Friday afternoon showed support but now that the bailout news is “official”, well, it will be interesting to see how the market reacts on Monday.
Oh, when did the Treasury get into the stock purchasing business? What the heck is the federal government doing by authorizing the purchase or publicly traded shares? I can understand they don’t want these institutions to have asset “fire sales” as that would put massive pressure on the broader markets, but authorizing the purchase of shares to stabilize these companies stock prices? Huh? Let the stocks crash and bailout the companies capital situation to protect the economy as a whole – not the shareholders!
At times all systems breakdown, and when that occurs we should fix them, however, sometimes the best fix is to let them die a natural death.
We cannot reward (or cover for) incompetent or lackadaisical management. Let the “Free Market” be “Free” and punish the hell out of these companies stock price. I know, I am commenting from the cheap seats but you have to admit, this sucks. The Taxpayers are going to get stuck with this bill and heads should roll.