The problem is they were already operating on razor thin margins. Imagine people walking through their lives with only $10 of savings, and hundreds of thousands of dollars in debt. First time something happens, boom, you go bankrupt.
Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much money if they paid off. But they didn't paid off. Why should we bail them out?
In fact, is there something we can do to PREVENT these colossal leverage figures? Banks don't care, regulators can't do much about it, PE companies don't care, the companies being bought out don't have a say, and neither consumers.
Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much money if they paid off. But they didn't paid off. Why should we bail them out?
In fact, is there something we can do to PREVENT these colossal leverage figures? Banks don't care, regulators can't do much about it, PE companies don't care, the companies being bought out don't have a say, and neither consumers.