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Showing posts from April, 2018

Amazon Trumped

Disconnecting upside from downside or actors from the consequences of their actions will always lead to negative outcomes.  Many examples of this have played out in the financial world in recent history and continue to this day. These include the unfortunate history of the government-sponsored-entities FNMA and FHLMC, each of which were publicly-traded companies that for as long as they made money paid significant dividends to their private shareholders and large bonuses to their executives, but when they lost massive amounts of money in the 2008 downturn relied upon the U.S. taxpayer to bail them out. There was no question to those few in the know that the disconnect between those executives and shareholders who enjoyed the upside and the unwitting taxpayers (and their even less witting representatives in government) whose collective guarantee was always on the hook and who thus always were standing in the wings to suffer the downside, would lead to a massive collapse one day. A ver…