This is a partial quote from “chessmaster315”,
Post# of 82672
“... Before Fannie and Freddie can be recapitalized, current shareholders need to be made whole. As I have explained, "investors" are not like chickens waiting in a line to be butchered and turned into Chicken Nuggets.
Instead, investors "hear the screams" of other investors (who have been wronged) and immediatly "exit" so they wont also be butchered.
And, "would be investors" in the new shares will also hear those screams, and immediately withdraw. Attracting the billions needed wont happen without first making the current shareholders whole.
After all, if the government butchers current investors, what is to stop the government from also butchering "new" investors in the new capitalization? Ans: Nothing.
Since investors are smarter than chickens, we wont wait in a line to be butchered....”