Comments on: Quick Quiz: Can you match the event to the pricetag?

By: Roswell

Roswell — Wed, 14 Oct 2009 14:07:10 +0000

A3K’s comments are well taken. It would appear that Mr. Ritholtz may have fallen in the same trap for the S&L crisis, since the actual total when one includes the repayments/sales out of Resolution Trust suggest that the Fed actually made a small overall profit, although not on an inflation adjusted basis.

By: A3K

A3K — Tue, 13 Oct 2009 20:01:09 +0000

The bailout number isn’t comparable to the others. First, it’s not a taxpayer expenditure. Much of what Mr. Ritholtz included (actually the Fed included) was commitments by the Federal Reserve to prop up the mortgage market. We can debate whether that is good policy, but it’s not backed by tax dollars. It’s backed by fiat dollars.

They didn’t tax Peter to pay Paul, they just turned on the printing press and made more money.

Second, much of the “bailout” has been direct government investment in going concerns. In the case of several banks, the taxpayers have already realized a profit on those investments.

Of course on others, GM and AIG for example, there is virtually no hope of receiving a profit, and slim hope of getting even dollars back on those “investments”, but until the profit-loss statement is finally accounted for, we’ll have no idea if these bailouts/investments will have a positive or a negative effect on the taxpayers as a whole.

And as for the inflationary policies of the Fed, they have largely been implemented to forestall deflation, so if they’re successful, and if the money can be extricated from the economy in time, then it’s possible we’ll not have any meaningful inflation as a result of those policies.

The one thing that IS certain is that the bailouts will not cost $11.6T, and will possibly be $10T or more less than that figure.

By: Will Montgomery

Will Montgomery — Tue, 13 Oct 2009 18:40:32 +0000

Get your numbers together. These are so blatantly FALSE I hardly know where to start. the S&L crisis was really a BAILOUT and in 1990 the costs had already surpassed 500 billion in 1990 dollars.
Iraq is under 600 bill? Try 1 trill and growing.
Jeez you guys could use a little remediasl math!