Regulators around the world like to use words like “bailout” in order to help failing institutions. Which kind of institutions get a helping hand? The honest ones? The fair ones? You got to be joking. It is friends and relatives who get bailed out!
Freddie Mac and Fannie Mae kept telling the whole world that they are well capitalized. The SEC chief thought they were well capitalized, the auditors (of course one of the venerable big 4 – PriceWaterhouse and Delloitte thought they were “a going concern”), S&P, all thought these companies “were” or “are” in good shape. However, the equity market – full of small investors – kept hammering these shares. Thus the market did its job of price discovery very well.
Why did the bail out happen? To support the dollar? To “help” the friends who could have got into trouble? To save the “soverign” investors? – China, India, Japan….Do these “soverign” investors get away with words like “soverign guarantee”? F and F looks like the biggest fraud on the public. However, Ben, who seems to have PhD in printing, will convert trees costing $ 2k into paper which will be worth $ 2 million or billion….so what if the $ is suddenly worth 10 yen or Rs. 20?
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