$7.76 Trillion - Bloomberg Reports on Growing Cost of Bailout

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wwSwimming
$7.76 Trillion - Bloomberg Reports on Growing Cost of Bailout

Nov. 24 (Bloomberg) -- The U.S. government is prepared to
provide more than $7.76 trillion on behalf of American taxpayers
after guaranteeing $306 billion of Citigroup Inc. debt yesterday.
The pledges, amounting to half the value of everything produced
in the nation last year, are intended to rescue the financial
system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion
already tapped by financial institutions in the biggest response
to an economic emergency since the New Deal of the 1930s,
according to data compiled by Bloomberg. The commitment dwarfs
the plan approved by lawmakers, the Treasury Department’s $700
billion Troubled Asset Relief Program. Federal Reserve lending
last week was 1,900 times the weekly average for the three years
before the crisis.

http://www.bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home

the US Federal Reserve puts some of their data online.

http://research.stlouisfed.org/fred2/categories/123

The BOGNONBR (Board of Governors, Non Borrowed Reserves) numbers are going off a cliff. From 4th Quarter 2007 to today, Total Bank Reserves of US banks dropped from about $40 billion to -$300 billion.

In other words, the reserves that US banks use to meet "reserve requirements" are mostly - borrowed.

I was concerned when the US National Deficit was $5 trillion. It has skipped through $10 Trillion on the way to $15 Trillion so fast that my gut tells me, the US economy is very, very sick. Before the bailouts began earlier in the year, the US National Debt was $9 trillion. So, now, add $7.76 trillion on top of that.

The only way the US can pay interest on the debt is to borrow more money.

& the Bush administration can spare $300 billion for Citigroup, but hems & haws about federal assistance for GM, Ford, & Chrysler (which, between the companies & their suppliers & dealers, employ 2.5+ million people.)

Something very strange is going on. It's almost as if the government wants the auto companies to go bankrupt - yet has no problem bailing out hedge fund managers who make $500 million a year (the average salary of the top 30 earning hedge fund managers in the US in 2007).

Looks like the looting of the US is in full swing, with preference being given to the oil companies, the bankers, and the defense contractors.

non borrowed reserves

and, finally, some good news. This video of Christian the Lion, a lion cub that was purchased at a London Department Store, then released into the wild, made me feel good.

http://www.youtube.com/watch?v=adYbFQFXG0U

Frustrated Mess Frustrated Mess's picture

And then to file absolute absurdity atop the insanity, we have this:

Quote:
President-elect Barack Obama vowed on Tuesday to scour wasteful spending from the federal budget to help offset an investment in a huge recovery plan to jump-start the ailing economy

Trillions for banksters, scouring for the productive economy.

But wait! There's more ... ominously more ... :

Quote:
“We can’t sustain a system that bleeds billions of taxpayer dollars on
programs that have outlived their usefulness or exist solely because of
the power of politicians, lobbyists or interest groups,” Mr. Obama
said. “We simply can’t afford it.”

Like the auto industry?

 

Frustrated Mess Frustrated Mess's picture

Quote:

There is little doubt that this crisis is already
having a devastating impact on heavily-indebted American households.
But one of the striking characteristics of analysis to date -- by both
the left and the mainstream media -- is the almost exclusive focus on
the wealthy countries of North America, Europe and East Asia. From
foreclosures in California to the bankruptcy of Iceland, the impact of
financial collapse is rarely examined beyond the advanced capitalist
core.

The pattern of capitalist crisis over the last fifty
years should alert us to the dangers of this approach. Throughout its
history, capitalism has functioned through geographical displacement of
crisis -- attempting to offload the worst impacts onto those outside
the core. This article presents a short survey of what this crisis
might mean for the Global South.

Making the World's poor pay