Several commenters to my last post wondered why the heck Hank Paulson & Co. think they need to bail out Fannie and Freddie. I’ll give Paulson’s answer, then translate: These Preferred Stock Purchase Agreements were made necessary by the ambiguities in the GSE Congressional charters, which have been perceived to indicate government support for agency [...]
Can someone explain why the government created companies that are now run by private shareholders? I’m having trouble understanding what the advantage is. Taxpayers are still clearly at risk so it seems that the shareholders can capitalize and then, should something go wrong, taxpayers will have to bail them out. Wouldn’t it be better to [...]
