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Categories - Copywriting - Shopping - Free Online Business Help - Telecommunications Services Articles: Finance - The $7 Trillion Bailout In spite of opposition from over 90% of the population, Congress and the Senate passed the bank bailout. What taxpayers didn’t realize is that the $700 billion bill was only the tip of the iceberg and that the financial institution collapse, which was sprung on us in the form of bad mortgage backed securities, has been festering for over three years with Congress, the Senate, the President, the Fed, the Treasury, and the IRS implementing costly programs in an attempt to stave it off. Total taxpayer cash and future liability for these programs has passed $7 trillion and is climbing. The following is a listing, probably not all, of the programs that have been implemented at the request of the banking industry over the past two years in order to encourage their implosion.
Term Discount Window Program (TDWP), 10/17/07, Increasing from $92 billion. Term Auction Facility (TAF) 12/12/07 Increasing from $407 billion. Term
Securities Lending Facility (TSLF),
03/26/08, Increasing from $193 billion. Bear Stearns, 3/14/2008, $29 billion. Primary
Dealer Credit Facility (PDCF),
03/16/2008, Increasing from $58 billion.
9/16/2008, Increasing from $175 billion. Asset-Backed Commercial Paper Money Market
Mutual Fund Liquidity Facility (AMLF), 9/19/2008, Increasing from $53 billion.
Expansion
of the Federal Open Market’s temporary reciprocal currency
arrangements
(swap lines), 9/29/2008, $330 billion increase.
Commercial
Paper Funding Facility (CPFF),
10/7/2008, $1.8 trillion. Money
Market Investor Funding Facility (MMIFF), 10/21/2008,
$540 billion. Term
Asset-Backed Securities Loan Facility (TALF),
11/25/2008, $200 billion. Purchase
of GSE direct obligations and MBS, 11/25/2008,
$600 billion. FHA Secure, 08/31/2007, $50 billion. Housing and Economic Recovery Act of 2008, 7/30/2008, $24.9 billion Purchase
of GSE debt and equity, 7/30/2008,
$25 billion. HOPE for Homeowners, 7/30/2008, $300 billion Conservatorship
of Fannie Mae and Freddie Mac, 9/7/2008,
$200 billion. Guaranty
Program for Money Market Funds 9/19/2008 $50
billion. IRS
Notice 2008-83, 9/30/2008,
amount? Allows banks to offset their profits with losses from the
loan portfolio of other banks they acquire. Wells Fargo alone may be
able to deduct $70 billion. Emergency
Economic Stabilization Act (EESA), 10/3/2008,
$700 billion. Increased FDIC insurance coverage, 10/3/2008, Raised the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor. Temporary Liquidity Guarantee Program, 10/14/2008, $1.5 trillion Citigroup, 11/23/2008, $249 billion.
Each program, each extension, and each amount of money that was made available prior to the mortgage backed security crash only encouraged the banks to continue on their merry gambling way while getting Congress and the Fed to implement more legislation and programs until the population, which had been sold ARMs that everyone knew that they couldn’t pay, began to default. Suddenly the banks woke up and realized that they were stuck with derivatives that they couldn’t fund and began to yell foul and help when the practicality of the matter was that they were the ones who caused the harm and they were beyond help.
Even after providing financial institutions with everything that they could imagine, they have continued to foreclose on homes in massive numbers and charge loan shark rates on credit cards, while issuing multi-million dollar bonuses to their managers as they zoom around in their corporate jets.
Seven trillion dollars and increasing? How much longer will the financial experts predict disaster if the banks fail when the banks are what is causing disaster? What has become apparent is that downsizing the banks will downsize the problem.
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