>>>How about shareholders first losing the profits they made? After all, every move made was justified by the uppermost duty of every financial officer in any of these risky businesses was to maximize profits for the shareholders. If they have reaped the benefits, they should also lose them - and only then, if there's no other way to clean up the mess, should the tax money ooze in.
>
>>One should know few things before posting it. In case of Fannie/Freddy nationalization, as you put it, shareholders will lose all equity, i.e. total 100% loss.
>
>Good. I've had enough of this corporate socialism, the tax money bailing out every fucqueing gambler and con artist out there, if only large enough. They enjoyed the gains, they should enjoy the losses too. That's how market is supposed to work.
>
>>By the way, taxpayers and shareholders are usually the same people.
>
>#define usually. Most of the shareholders pay tax. Most of tax payers are not necessarily shareholders.


There is a difference here. Fannie Mae and Freddie Mac are government sponsored and were designed that way. They are not the typical private enterprise.

You may find this proposal from back in 2004 interesting. Particularly interesting is Alan Greenspan's proposals:

http://www.chicagofed.com/news_and_conferences/conferences_and_events/files/2004_bank_structure_how_to_privatize_fannie_mae.pdf

and this (purpose and reform):

http://www.heritage.org/Research/GovernmentReform/bg1861.cfm

Fannie Mae was created in 1936 during the Great Depression to provide a secondary market to encourage greater use of the innovative long-term, fixed-rate, level-payment, fully amortized mort­gages that the newly created Federal Housing Administration (FHA) was insuring against loss of principal and interest. The exercise was a success, and this type of innovative mortgage became the standard means of financing the postwar housing boom that raised the homeownership rate from 44 percent in 1940 to 69 percent by 2004