Many investors have been wondering why certain certain financial institutions and companies were bailed out and others weren't. Others wondered why the American taxpayers are bailing out any companies a all. Now a study has been released by a couple professors at Tilburg University in the Netherlands and Manchester Business School in Great Britain, which has has turned up some disturbing (in my opinion) information.
First, stock ownership appeared to be an indicator of whether members of the House voted for the two bills to bailout the financial sector. Second, stock ownership by a member of Congress in a given company was reportedly statistically significantly shown to affect the probability of receiving a bailout. There was also a correlation of the bailout amount and the timing of the bailout, according to the study. There was reportedly even a correlation between Congressional vote and serving on the Board of Directors of a particular firm.
The 65 page study can be found here.
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