Tuesday, March 31, 2009

Bloomberg: Financial Rescue Pledges Now $12.8 Trillion

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I guess I am going to need to update this weekly; just last week it was $12 Trillion [Mar 25: Taxpayer Welfare to the System $3 Trillion Down, $9 Trillion to Go], now it appears to be up to $12.8 Trillion per Bloomberg. Numbing. And I was numb back in November 2008 when I said the Federal Reserve is now Atlas! [Nov 26, 2008: US Government on Hook for $8+ Trillion] I don't know how people can be cheering this; the rewards are short term in scope for the long term weight we are attaching around the necks of future generations. Sure some of this dollars are "investments" (surely AIG will pay us back!) and much of it is 'pledges' (just in case) but we have literally built a parallel economy of dollars to prop up the actual US economy. As I wrote last week

Just to put it into perspective the ENTIRE U.S. economy is $13-14 Trillion. Our federal deficit is now $11 Trillion (and we're now on pace to add $2 Trillion a Year with all the new spending/plans). The entire market capitalization of the Wilshire 5000 (the broadest measure of the stock market) was roughly $8 Trillion last I checked.... call it $9 Trillion if you wish. (which is why I am saying of late, sure if we throw enough worthless paper dollars at the stock market, yes stocks will rise - at a major long term cost)


I am left speechless, especially as I watch the cheerleading of this. We are creating an illusion of recovery and eventual prosperity. We still have Medicare and Social Security to deal with (??) Anyone??

Per Bloomberg
  • The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
  • New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks.
  • The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation.
  • “The president and Treasury Secretary Geithner have said they will do what it takes,” Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said after the meeting. “If it is enough, that will be great. If it is not enough, they will have to do more.”
  • FDIC Chairman Sheila Bair warned that the insurance fund to protect customer deposits at U.S. banks could dry up because of bank failures.
  • The combined commitment has increased by 73 percent since November, when Bloomberg first estimated the funding, loans and guarantees at $7.4 trillion.
  • “The comparison to GDP serves the useful purpose of underscoring how extraordinary the efforts have been to stabilize the credit markets,” said Dana Johnson, chief economist for Comerica Bank in Dallas.

===========================================================
--- Amounts (Billions)---
Limit Current
===========================================================
Total $12,798.14 $4,169.71
-----------------------------------------------------------
Federal Reserve Total $7,765.64 $1,678.71
Primary Credit Discount $110.74 $61.31
Secondary Credit $0.19 $1.00
Primary dealer and others $147.00 $20.18
ABCP Liquidity $152.11 $6.85
AIG Credit $60.00 $43.19
Net Portfolio CP Funding $1,800.00 $241.31
Maiden Lane (Bear Stearns) $29.50 $28.82
Maiden Lane II (AIG) $22.50 $18.54
Maiden Lane III (AIG) $30.00 $24.04
Term Securities Lending $250.00 $88.55
Term Auction Facility $900.00 $468.59
Securities lending overnight $10.00 $4.41
Term Asset-Backed Loan Facility $900.00 $4.71
Currency Swaps/Other Assets $606.00 $377.87
MMIFF $540.00 $0.00
GSE Debt Purchases $600.00 $50.39
GSE Mortgage-Backed Securities $1,000.00 $236.16
Citigroup Bailout Fed Portion $220.40 $0.00
Bank of America Bailout $87.20 $0.00
Commitment to Buy Treasuries $300.00 $7.50
-----------------------------------------------------------
FDIC Total $2,038.50 $357.50
Public-Private Investment* $500.00 0.00
FDIC Liquidity Guarantees $1,400.00 $316.50
GE $126.00 $41.00
Citigroup Bailout FDIC $10.00 $0.00
Bank of America Bailout FDIC $2.50 $0.00
-----------------------------------------------------------
Treasury Total $2,694.00 $1,833.50
TARP $700.00 $599.50
Tax Break for Banks $29.00 $29.00
Stimulus Package (Bush) $168.00 $168.00
Stimulus II (Obama) $787.00 $787.00
Treasury Exchange Stabilization $50.00 $50.00
Student Loan Purchases $60.00 $0.00
Support for Fannie/Freddie $400.00 $200.00
Line of Credit for FDIC* $500.00 $0.00
-----------------------------------------------------------
HUD Total $300.00 $300.00
Hope for Homeowners FHA $300.00 $300.00
-----------------------------------------------------------
he FDIC’s commitment to guarantee lending under the
Legacy Loan Program and the Legacy Asset Program includes a $500
billion line of credit from the U.S. Treasury.


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