Quote:
Originally Posted by Captain Awesome
I'm no market expert, but I doubt any serious investor is going to look twice at a GM stock offering. This last time GM got in trouble all of the secured creditors got nothing and the unsecured creditors got everything. This is in complete violation of the bankruptcy laws.
Breaking it down, people with investments in the company (like old folks investing their retirement, or working stiffs with 401k's) who are required by law to be first in line in bankruptcy proceedings got robbed of everything. It was handed over to a bunch of unsecured creditors (unions).
What makes you think that it won't happen the next time?
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The next time(s) is yet another fallout of Keynesian economics. It leads corporations to preserve capital and look to bailouts. Keynesian economics
can work, but it simply takes much longer for it to work. Allowing the market to correct itself (during pre-bailout times) would assert hoarding, faster deflation, more bankruptcies, and a quick return to prosperity.