"I don't know what the number is going to be, but it's going to be a big number. It has to be. The point is to, kind of, get people back on track and startle the thing into submission."
- Obama economic adviser Austan Goolsbee, on the Money Bomb to come, November 2008
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34 comments:
Another day, another $800 billion spent by the Fed to unfreeze credit.
Such courage Ben. It probably took you all of two seconds to make that decision. How do you find it in you to your printing presses going all day?
Thanks for nothing. Thanks for grand theft nation.
The Powers that be don't seem to realize that this was a mania and the only reason people were buying was because of false wealth . The false wealth is not there anymore and people have lost their shirts in the stock market .
"back on track" = consume, consume, consume.
i love the two entrenched, corrupt parties soooooooo much! we should all be thankful this Thursday for their leadership.
Will it be evil when Bush puts thru a stimulus package but awesomely cool when Obama does?
About your poll:
2 choices
$10 Trillion Money Bomb
or
Great Depression 2
Here's a third option:
Dubya Dubya III
If they explode a money bomb. It'll be years before we can clean up all that money lying around.
It'll be a herculean effort to do it.
Let's hope they don't.
Who wants money lying around. It doesn't even burn that well compared to wood.
300 billion yesterday, 800 billion today, and still no regulations, do, I live on planet earth?
Keith, this is from the Big Picture..
Big Bailouts, Bigger Bucks
Posted By Barry Ritholtz On November 25, 2008 @ 7:19 am In Bailouts, Markets, Taxes and Policy | 25 Comments
Whenever I discussed the current bailout situation with people, I find they have a hard time comprehending the actual numbers involved. That became a problem while doing the research for the [1] Bailout Nation book. I needed some way to put this into proper historical perspective.
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.
Jim Bianco of 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
______________________________________________________________________
data courtesy of Bianco Research
>
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).
Go figure: WWII was a relative bargain.
I estimate that by the time we get through 2010, the final bill may scale up to as much as $10 trillion dollars…
>
UPDATE: November 25, 23008 10:34am
A few additional details:
-Well regarded Jim Bianco did the number crunching. The easiest method is to recalculate the numbers using CPI data. There are other ways to depict this — such as percentage of GDP, or on a per capita basis, or in terms of costs of common items (eggs, bread, big macs, etc.).
[2] Bloomberg calculates the total amount the taxpayer is on the hook for is $7.76 trillion, or $24,000 for every man woman and child in the country. ([3] Data breakdown is here)
Regardless, no matter you calculate it, we are talking about an ungodly amount of money.
--------------------------------------------------------------------------------
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/
A few thoughts: (1) If Americans follow their usual instincts and spend their share of the stimulus money almost exclusively on imports, aren’t foreign economies the true, ultimate beneficiaries of the stimulus? If so, aren’t we just making ourselves poorer? Wouldn’t it be more time and cost effective for the USA to merely just hand the money over directly to China, India and Japan since that’s where the stimulus money is going to end up anyway. (2) Shouldn’t the USA stimulate the economy by directing the money not to consumers (who would spend it buying imports) , but on domestic projects where most, if not all, of the materials and labor would be domestic – i.e. a Re-Build-America stimulus plan which is a cover for a Buy-American stimulus plan. (3) Shouldn’t the USA stimulate the economy by REFORMS? The public’s loss of confidence is due to the finance industry having been run as a MBA con game. Strong, immediate reforms are necessary not to deter ongoing misconduct as much as to restore confidence that the system will no longer be run with the ethical integrity of a three-card-monty game. (4) Shouldn’t the economic goal of the country include maximizing not only growth, but–God forbid!--quality of life? And no, maximization of growth does NOT equal quality of life. There is no scientific principle that humans must maximize the utilization of their labor and resources to maximize someone else’s profit. This country was based on the pursuit of happiness, not profit. While neo-cons consider profit and happiness to be the same, they are not. We mock the Europeans for their long vacations, but what is wrong with that? Is it better that they should imitate us and languish in their florescent lit, windowless offices for 50 weeks out of the year?
This is not a valid question.
A)$10 Trillion Money Bomb?
B)Great Depression 2?
A = B.
A + B = B X 2.
Your friend a Harvard.
Satan...
You can't scare every last dollar into circulation at the same time you flood the market with liquidity.
This is a government Ponzi scheme that will enable the government to raise interest rates through the roof so the banker lobbyists can make real money by lending at high rates to cash strapped slaves.
Government is run in the interest of the elite. The elite have tons of cash and are now ready to get high interest.
It is obvious that government is not trustworthy and that the sheep take the bait every time.
Love you!
Satan...
Whoot cut the credit off to the sheep. Pump the Banks with Trillions.. Slaves your all slaves..
Buwuwuwhhahahahaah
Back in 1929 Financial Crash it was said that some Wall Street Stockbrokers and Bankers JUMPED from their office windows and committed suicide when confronted with the news of their firms and clients financial ruin . . . Many people were said to almost feel a little sorry for them . .. . . . .
In 2008 the attitude has changed somewhat:
The sign reads : Jump you Fuckers"
Wow!! Where did the Obama is going to save us party go?
I love you too Satan!!
Well I already paid my 24K to the government so I can just sit back and watch.
Did my part!!!
Now anybody got a dime to spare so's I can buy some food?
I think guy n. cognito nailed it with "consume."
The general public still wants things to go back to 2006, they want easy money to buy more stuff. This country will never turn around until people begin to truly understand that all these lifestyles they have been sold are unsustainable.
America is a trust fund kid who finds out the money is all gone and he's gonna have to work as a fry cook if he wants to have food and stay warm. Not gonna be pretty...
Using more tax-payers money (and the money of future generations) to bail-out housing gamblers - what a joke.
There isn't enough popcorn at the store to get through this show.
It's going to be a long, drawn-out train reck.
"I don't know what the number is going to be, but it's going to be a big number. It has to be. The point is to, kind of, get people back on track and startle the thing into submission."
You sure he's not talking about the number of dead polititians it's gonna take to right this ship??????
Hey Sashers, after a little bout with deflation, we will see MASSIVE INFLATION. Your hard earned savings will go POOF! HA, HA, HA, LOL, LOL, LOL. You Fucked Savers are so fucked. Do you really think the government or the banks will end up foreclosing on all of us so called Fucked Borrowers? If they did, they would end up shooting themselves on the foot. Thus that is why they are putting together one plan after another.
Mark my words; sooner or later they will end up reducing my principal and give better terms! Keep living with mom Fucked Savers.
I need to open up an ink shop.
From article on today's new(?!) $800 billion bailout:
"As part of the Fed’s new plan it will purchase as much as $600 billion in debt issued or backed by government-chartered housing-finance companies."
So the government gave out lots of money as questionable loans through its corrupt financial entities. These entities, Fannie and Freddie, had to be rescued by none other then the government. Now the Fed is going to explicitly buy those loans back if they go bad.
OMFG
Sorry Nick. I think you want to go over to housing panic.
This is soot and ashes the blog where we discuss just how fucked everybody is regardless of whether they are still in their overleveraged house or if they have moved back in with mom and dad or if mom and dad have moved in with the kids.
We're all fucked here because when crime rates go up, no safe gated community will save your ass when you get held up at gunpoint in the wallmart parking lot or at the bank ATM or at your country club.
"Keep living with mom Fucked Savers."
Cash buys gold and oil. What happens when oil goes spikes again? What happens when you have to sell your car to get to work?
I expect a call from some Countrywide sharpie when mortgage interest rates hit 15% next year. They'll beg me to close out my 5.25 fixed rate note, and since I have the cash I'll oblige them, for a mere 50% discount!
Sorry bastards
Nick, fat, drunk and stupid is no way to go through life.
Do you think those of us who were not caught have no compassion for you? Hell, Nick, I lost so much money when the tech bubble burst that you look like a sniveling pussy in comparison. Man up.
And remember this, no one cares about you. That's what men learn as they grow older. You are on your own.
Love lost, money lost, hell, if you live long enough, it's memory lost. So freaking what?
You haven't paid your mortgage in over a year and you have not shut up here for months and months. Good grief, man, open your pants. Are there a pair of balls in there? Man up.
Sometimes you win, sometimes you lose. What is NOT cool is harassing others because of YOUR actions. Do you hear me? Your actions.
I can take my savings and put them in a Swiss money market account. You? What are your options? Man up.
When I lost my money in the tech bubble burst, did I endlessly complain to strangers under a pseudonym? Nope. I looked in my pants and realized I still had a pair of balls and that life goes on. Was I an unhappy camper then? Yep. Am I better now. Yep.
Why?
Because I manned up.
Do it. Shut up and do it.
Right on LibVet - right on
"Knoxville car dealers say cheaper gas prices have refuelled SUV and truck sales. Dealers say record high summer gas prices hit the brakes on sales by upwards of 30%. But now that gas has fallen below $2.00 a gallon, dealers say drivers are buying bigger cars with bigger tanks again..."
No comment.
Hung like a horse said...
no safe gated community will save your ass when you get held up at gunpoint in the wallmart parking lot or at the bank ATM or at your country club.
Nick lives in an apartment-to-condo conversion in the innercity. He is unhappy. He has been sharing the roaches with his neighbor next door after paying all that money for the granite countertops.
He is waiting for his Hope Now condo welfare bailout. He just needs to feel better about himself here.
Anonymous said...
"Knoxville car dealers say cheaper gas prices have refuelled SUV and truck sales. Dealers say record high summer gas prices hit the brakes on sales by upwards of 30%. But now that gas has fallen below $2.00 a gallon, dealers say drivers are buying bigger cars with bigger tanks again..."
No comment.
Yup, I heard that on the radio too. Just wait until the stimulus hits next Spring. VISA & AMEX will be flooding the mailboxes early to prepare us for the Red White and Blue Light Special.
There will be tears of joy at the mall as everyone goes to max out the new card.
God Bless America.
I thought one of the arguments for the TARP 700 Billion was that Banks would absorb all of that money almost instantly into bad mortgages and failed derivatives paper. They said the money supply wouldn't be increased and therefore wouldn't create price inflation.
Now, that is exactly what they are going to do.
1 package of sliced bologna = $30.00.
Ah, now the $500,000 mortgage doesn't feel so bad.
Let's forget about tomorrow -
Let's forget about tomorrow -
Let's forget about tomorrow -
For tomorrow never comes.
UGL (Ultra Gold) is coming soon.
Got a pair?
notice the 'kind of':
you may translate it as 'abracadabra'.
So you can sum it up as:'let's throw money at people and hope for a society project to pop up out of it'.
protip: Zimbabwe, you should look into it.
It never seems to fail that when everyone jumps on a bandwagon for a solution to an endemic problem, that it's always a really, really bad one.
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