Not sure why this stock is rallying in the midst of AIG bonus headlines. If anything, the current administration is displaying plenty of dislike for financial sinkholes such as AIG. How is FRE not in the same boat? What USED to make sense, the gov't taking a < 50% equity position in a company no longer seems to make sense. Even tho the gov't effectively saved AIG, AIG mgt seems to continue to do as it likes. So if FRE gets in trouble in the future, why should the administration look to save it this time? While it might like to continue to pay-off foreign counterparty banks with taxpayer printed dollars in order to prevent electronic bank runs, public sentiment is changing for the worse making this increasingly difficult. Not sure what the new bailout "solutions" of the future will look like, but you can bet they won't make the same AIG mistake twice. The end result of new forms of gov't takeover MAY be that bondholders and mgt teams and employees of ought-to-have-been-allowed-to-go-bankrupt companies may voluntarily look towards bankruptcy as a better alternative to contining to run a zombie company always second-guessed by flighty politicians looking for cheap scapegoats to their own obvious failures.
$1.03 (03/19/09)
