Fed's bailout of the US Financial Sector
Filed under: Global Economy
Everywhere you look now, there is always some mention of the US financial sector and the instability which it’s facing. First there was Enron, then the subprime loan crisis, then fuel price concerns, followed by Fanny Mae and Freddie Mac, and now the government is proposing bailing out failing financial institutions. There’s is even further talk of some of the executives of these companies getting their fat bonuses despite the demise their companies are facing. Those companies took a calculated risk and the markets went forth with a downward spiral. They should have realized when it was time to cut their losses and find other places to invest. Unfortunately it is the taxpayers which ultimately foot the bill for the bailout and this is something that I and I’m sure other people are not pleased about. All of us as regular citizens, can not simply go back to the investment company and say “My stock dropped $10 and I lost $10K. Can you please subsidize it?”. The government in my opinion made a bad move by trying to subsidize the financial sector. Instead, they should have let the companies fend for themselves. It may have caused instability in the already sensitive financial markets, but it would also increase corporate responsibility and oversight over financial traders and fund managers.
Posted on September 23rd, 2008 by Andy Yiu
0 Comments