Bailout thread

I'm sure you've seen a poster or politician refer to the bailouts as TARP alone, and say things such as "its almost repaid". Not even. Here's a handy PR full of links for referral:

STEALTH BAILOUT UNDERWAY Bailout Cost Still Increasing, $4.71 Trillion Now Disbursed

Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an update on CMD's total Wall Street Bailout accounting that unlike other bailout assessments includes Federal Reserve loans.

In total, CMD found that over the last month, the funds disbursed by the Federal Reserve, Treasury and FDIC in the bailout have increased by $47 billion to $4.71 trillion. CMD also found that the total outstanding amount has increased $26.4 billion to $2.01 trillion.

$19 billion of the $47 billion increase is from the Preferred Stock Purchases Program of the U.S. Treasury Department. The funds are being used to prop up Fannie Mae and Freddy Mac in order to keep the mortgage market from collapsing entirely after Wall Street destroyed it through the use of derivatives and exotic mortgage-based financial products. The program, which formerly had a cap of $400 billion, was uncapped and given an unlimited credit line in a late, Christmas Eve announcement timed to avoid public scrutiny.

The Federal Reserve is also taking aggressive action to prop up the housing market. The Fed has now disbursed a total of $3.9 trillion, or 83% of the bailout's total. $1.4 trillion, largely in mortgage-backed securities issued by Fannie and Freddie, remains outstanding. Figures come from the Federal Reserve's own accounting.

"The Obama administration keeps telling us the bailout is winding down, but a 'stealth' bailout is underway as funds are being disbursed to prop up Fannie and Freddy with little Congressional discussion or debate," said Mary Bottari, Director of CMD's Real Economy Project. A recent article in the New York Times speculated that Fannie and Freddy are suffering huge losses because they were paying too much for mortgages in a back-door effort to aid mortgage lenders.

Learn more about the 35 programs included in our bailout tally by visiting our Total Wall Street Bailout Cost Table, which contains links to pages on each bailout program with details including the current balance sheet for each program. CMD also publishes a Financial Crisis Tracker, a widget for the table that can be downloaded to websites to get up-to-date numbers on the financial crisis and the bailout.

The Center for Media and Democracy is an independent, non-profit, non-partisan, public interest organization located in Madison, Wisconsin.

The extent of the bailouts now extends into Europe, and is arguably just beginning:

This is the perverse logic of meritocracy. Once a system grows sufficiently complex, it doesn’t matter how badly our best and brightest foul things up. Every crisis increases their authority, because they seem to be the only ones who understand the system well enough to fix it.

But their fixes tend to make the system even more complex and centralized, and more vulnerable to the next national-security surprise, the next natural disaster, the next economic crisis. Which is why, despite all the populist backlash and all the promises from Washington, this isn’t the end of the “too big to fail” era. It’s the beginning.


Tags: bailout (all tags)




will someone dispute these numbers ?

by Ravi Verma 2010-05-17 08:25PM | 0 recs

My eyes are certainly opened by this post.

I have been busy playing bear market last week and the week before, with the flak thats been flying out of the european markets but I had no idea the extent of the reforms underway in the U.S.


Out of the corner of my eye, I have been watching commercial real estate. I am going to have to do some homework on the financial reform here under discussion in this post - I've been blindsided, I think - by the magnitude of this package....


I'm a big fan of healthcare, to be certain - I think that keeping that issue - in particular a national health service - is a great way to go to finish the work there.


That said, if this bill is working its way through congress -  and, as usual - the bill is some thousands of pages and packed with all kinds of political strangeness ... I'm thinking it might be better to do your homework on this one, figure out what to do...


Then circle back around to healthcare once this vote is done. Man this thing is a big deal.



by Trey Rentz 2010-05-19 12:56PM | 0 recs

I'm still playing the bear a little bit this week too... :)

by Trey Rentz 2010-05-19 12:56PM | 0 recs


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