My last post titled “Nightmare Before Christmas” may have been a bit premature. On Christmas Eve the US government decided to lift the 400 billion dollar cap it previously thought was enough to cover the Freddie and Fanny screw ups. Of course this was not really mentioned in the mainstream media and pretty much ignored since it was so close to the holidays. I find it funny and sad that a country that praises its Capitalist ways must continue to fork up tax payers money to bail out large corporations. Just like any parent knows, without rules and structure a kid will mis behave until they are forced to suffer some consequences. Yet Fannie and Freddie can continue to make bad decisions knowing the government will always be there to bail them out. In a real capitalist economy companies go bankrupt when bad decisions are made. This is how the system separates the good from the bad.
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