Unlimited returns limited liability
Now my goat with the whole process is that the government in these occasions made the tax payers pay for operational mistakes for which the management and shareholders who chose the management are responsible, while putting minimum costs on the shareholders. On the event of a bail out, the shareholders can still liquidate their shareholding and leave with whatever they get. They shouldn't be getting anything in a government bailout. A government bail out happens only when the market does not value on going operations of a company higher than the sum of its parts. The first right of whatever is earned out of the parts auctioned in the market is with the employees, debtors etc in that order, and equity holders come last. But a government bail out serves the shareholders before anybody else. And the economic cost of buying at a price higher than the fair market value is passed on to the tax payers. This is not just. This is my goat.