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should the gov bailout companies like fannie and freddie

Sep-12-2008


bailout and debt management

Governments have been bailing out companies for years. All the way from Chrysler, and now Freddie Mac and Fannie Mae. There are many opinions from all sides about what should or should not be done. Here are some viewpoints that you will PROBABLY HEAR. Companies like Fannie Mae should be bailed out because it would totally destroy the economy, and the people that work at these companies would lose THEIR JOBS. This is the argument in defense of support dying companies like these. investing strategy


I am not here to tell you which argument is right or wrong, but simply to lay down facts for you to think about. Here is another argument on the issue that you will frequently hear. Bailing out these failing companies, are hard on the taxpayers and the people that will lose their jobs will get the chance to work for someone ELSE WHO NEEDS EMPLOYEES after they were taken by these companies. Also if we do not bail out these companies it will allow for newer and smarter companies to be created by entrepreneurs that want to enter this market.

What should we think about a bailout for investing in stocks and the economy

Many investment brokers love it when a company is in a bailout position since taxpayers are paying for the company *many times*. The stockholders do not always end in a better spot though even if a company is bailed out. We can only look into history to decide if it was the right thing to do. K-Mart never got bailed out really, and we just merged with Sears. Then came companies and retailers that were according too many smarter, cheaper and better than K-Mart anyway. If the government would have bailed out K-Mart from closing a lot of their stores, then all these newer companies would have had trouble forming. Chrysler on the hand PAID OFF THEIR DEBT to the government and many jobs and retirements with them were saved. Had the government not bailed they out we would be uncertain about the economic hazards. So as you can see the arguments are endless. Just make sure that if you invest in a bailout that you know what you are getting into as a stockholder, because Fannie Mae and Freddie Mac today are penny stocks.investing in euros