"And the man at the back said everyone attack"

The ideologues are out in force attacking the GSEs. Not only are they attacking the GSEs and their irresponsible behavior (a fair point), the ideologues are attacking anyone who advocated not wiping out any and all investors possible (I.E. any investor not owning the AAA-rated senior notes) including Treasury Secretary Paulson. Today's Wall Street Journal states:

"We think Mr. Paulson should already have eliminated managers and private holders as a price of the recent bailout legislation. But if he lets either survive after taxpayers are forced to inject cash, the Treasury chief should be run out of town."

I agree that management has to go. I can also accept that equity shareholders should be wiped out. After all, they had the ability to vote. Management and the resulting mess management created was put and kept in place by the voting equity shareholders. I do not believe preferred holders and subordinate bond investors, who were not part and parcel to ANY decision making whatsoever. In takeovers and privatizations, preferred holders have, traditionally, been treated as very junior creditors. In the case of subordinate bonds, if interest payments are halted, the GSEs would be in technical default and bondholders could force an involuntary bankruptcy upon the GSEs. It would be appreciated if the ideological sensationalists would get their facts straight.

Maybe some of these pundits who are beating up the GSEs should be investigated for manipulation. It is interesting how the rhetoric was ramped up after the short sale restrictions were lifted. Hmmmm.