I’m shedding absolutely no tears for the nearly wiped out shareholders of Fannie Mae and Freddie Mac. Equity owners are last in line in the capital structure. Fan/Fred were leveraged 50x, so their equity was always a lottery ticket masquerading as long-term investment. Shame on these so-called "investors" for taking on such risk. Why did they? Because they thought the taxpayer would come to their rescue. They got what they deserve, as Mencken would say, “good and hard.”
~ Kevin Duffy, Bearing Asset Management, July 11, 2008
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