The 1.8 trillion dollars bailout
CNBC has made an interesting analysis on the US government bailout of the financial crisis.
It’s not just 700bn$, more like 1.8trn$. Quick laundry list:
- 700bn$ recently announced plan to buy assets from bank
- 150bn$ MBS purchase by Fannie and Freddie
- 85bn$ for AIG
- 90bn$ in repayment to JPM for Lehman
- 200bn$ for Freddie and Fannie
- 300bn$ for FHA
- 200bn$ of currently outstanding loans Fed’s issued to banks
- another 100bn$ in “smaller” things
Read it here for a fuller explanation.
I am not sure this plan addresses the real problem, which is the US consumer stretched way beyond the imaginable. It’s a big mess, and keeping the “banking system” (or part of it) afloat might not do the trick.
So much for 1.8trn$ investment, the S&P was down almost 4% today, back to were it was close of play Thursday. Really though times if 1.8trn$ buy you just a day of breath. In this whole mess, the S&P is down only 20% from the peak. I made a bet a couple of months ago with a friend of mine, to see it below 1,000 within 12 months. I think the market will have to catch up with the real economic situation, sooner or later.
Sphere: Related ContentDid you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment