Monday, September 8, 2008

The US Business Cycle: CEOs and "Short-Sellers" Get Millions as Businesses Fail

Fannie Mae and Freddie Mac CEOs Richard Mudd (L) and Richard Syron (R)

The US Treasury Department has taken over mortgage bundlers Fannie Mae and Freddie Mac. Though these corporations have been run into the ground by leadership incompetence and/or malfeasance, their CEOs leave with millions in compensation. China is also a winner, as these corporate bonds they hold are now secured. "Short-sellers," those betting for stocks to decline in value, have already profited from the failure, with working-class people again caught holding the bag. Marketwatch reports that more than $1 Trillion in credit default swaps will need to be settled. Forbes states that the taxpayer liability is unknown, but that it may reach $300 Billion.{0BD9AF95-0034-4309-85FE-03A8B7B77B32}&dist=morenews_ts#comments

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