Ugh. Unbelievably stupid, especially when you consider the benefits/ beneficiary ratio. And that $4.6 trillion figure keeps increasing.
There's something else going on. Freddie Mac and Fannie Mae backed mortgages worth about $1.4 trillion. About 5% of those were "troubled," which means $70 billion was in jeopardy. I may be off a bit, but say those mortgages represented 1/10th of all mortgages and that the "jeopardy" rate was the same for those mortgages, or 5%. That means we could have simply paid off all those bad mortgages for $700 billion, which would have benefitted all homeowners (not just the 5% deadbeats) AND Wall Street. I'd like an explanation as to why they didn't take that approach. Yeah, it's "woulda shoulda coulda" hindsight, but still, the I don't see that $4.6 trillion has helped much. On Nov 26, 2008, at 2:09 PM, Michael Luscombe wrote: > > The link was a diagram illustrating the story you posted: > > http://www.maumedia.com/testbed/bailout-pie.png > > > > > On 26-Nov-08, at 3:56 PM, [EMAIL PROTECTED] wrote: > >>> A touch of perspective: >>> >>> http://www.voltagecreative.com/blog/wp-content/uploads/2008/11/ >>> bailout-pie.png >>> >> >> That site is too busy. And the link is annoying. (For some reason, >> cutting and pasting won't get both lines.) >> >> Here's some additional perspective from Urgent Agenda: >> >> We get some of our best information here at Urgent Agenda from >> informed readers. Reader Ray Cleveland alerts us to a remarkable >> set of statistics comparing the federal payouts being made to deal >> with today's financial crisis with payouts made in the past. >> Consider: >> >> If we add in the Citi bailout, the total cost now exceeds $4.6165 >> trillion dollars. People have a hard time conceptualizing very >> large numbers, so let's give this some context. The current credit >> crisis bailout is now the largest outlay In American history. >> >> Bianco Research crunched the inflation adjusted numbers. The >> bailout has cost more than all of these big budget government >> expenditures – combined: >> >> • Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: >> $115.3 billion >> • Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: >> $217 billion >> • Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: >> $237 billion >> • S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 >> billion >> • Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 >> billion >> • The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: >> $500 billion (Est) >> • Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 >> billion >> • Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 >> billion >> • NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 >> billion >> >> TOTAL: $3.92 trillion >> >> That is $686 billion less than the cost of the credit crisis thus >> far. >> >> The only single American event in history that even comes close to >> matching the cost of the credit crisis is World War II. Original >> Cost: $288 billion, Inflation Adjusted Cost: $3.6 trillion. >> >> The $4.6165 trillion dollars committed so far is about a trillion >> dollars ($979 billion dollars) greater than the entire cost of >> World War II borne by the United States: $3.6 trillion, adjusted >> for inflation (original cost was $288 billion). >> >> Bianco Research, which crunched the numbers, is often quoted in >> financial news stories. >> >> Ray Cleveland goes on to note a Bloomberg report that the total >> bailout this time represents $24,000 for every man, woman and child >> in the United States. >> >> It seems to me that Americans, including many journalists, still >> don't understand the enormity of the federal bailouts and the >> implications for our economic system. The federal government now >> has equity stakes in major American banks and corporations. True, >> it can get some or all of the money back in the future, as the >> economy grows once more - if it grows. There are no guarantees. >> >> And we are far from out of the woods. >> >> >> >>> >>> On 26-Nov-08, at 2:45 PM, Bruce Johnson wrote: >>> >>>> <http://tinyurl.com/5s5w2b> >>>> >>>> Excellent article about the current economic mess as told by Wall >>>> Street insiders. >>>> >>>> None of this 'blame it all on the poor folks and ACORN/CRA' >>>> stuff. It >>>> was straight-up financial fraud, mainly by the subprime lenders, >>>> the >>>> ratings agencies and the investment banks. >>>> >>>> The money quote: ( [] added by me) >>>> >>>> "That�s when Eisman finally got it. Here he�d been making >>>> these side >>>> bets [buying credit-default swaps] with Goldman Sachs and Deutsche >>>> Bank on the fate of the BBB tranche [lowest quality mortgage-backed >>>> bonds] without fully understanding why those firms were so eager to >>>> make the bets. >>>> >>>> Now he saw. >>>> >>>> There weren�t enough Americans with shitty credit taking out >>>> loans to >>>> satisfy investors� appetite for the end product. The firms used >>>> Eisman�s bet to synthesize more of them. Here, then, was the >>>> difference between fantasy finance and fantasy football: When a >>>> fantasy player drafts Peyton Manning, he doesn�t create a second >>>> Peyton Manning to inflate the league�s stats. But when Eisman >>>> bought a >>>> credit-default swap, he enabled Deutsche Bank to create another >>>> bond >>>> identical in every respect but one to the original. >>>> >>>> The only difference was that there was no actual homebuyer or >>>> borrower. The only assets backing the bonds were the side bets >>>> Eisman >>>> and others made with firms like Goldman Sachs. Eisman, in effect, >>>> was >>>> paying to Goldman the interest on a subprime mortgage. In fact, >>>> there >>>> was no mortgage at all. �They weren�t satisfied getting lots of >>>> unqualified borrowers to borrow money to buy a house they >>>> couldn�t >>>> afford,� Eisman says. �They were creating them out of whole >>>> cloth. One >>>> hundred times over! That�s why the losses are so much greater >>>> than the >>>> loans. But that�s when I realized they needed us to keep the >>>> machine >>>> running. I was like, This is allowed?� " >>>> >>>> There's a term to describe this: "Ponzi Scheme" >>>> >>>> >>>> -- >>>> Bruce Johnson >>>> University of Arizona >>>> College of Pharmacy >>>> Information Technology Group >>>> >>>> Institutions do not have opinions, merely customs >>>> >>>> >>>> >>>> >>> >>> >>>> >>> >> >> Francis Drouillard, PE >> Novato, CA 94945 >> >> >> >>> > > -- > Michael Luscombe > [EMAIL PROTECTED] > http://www.maumedia.com > > "The only valid censorship of ideas is the right of people not to > listen." - Tom Smothers > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "StrataList-OT" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/StrataList-OT?hl=en -~----------~----~----~----~------~----~------~--~---
