Thread: How US Congress Intends To Waste $1.8 Trillion (READ)

How US Congress Intends To Waste $1.8 Trillion

Politics / Credit Crisis Bailouts Sep 22, 2008 - 12:46 PM

By: Mike_Shedlock

Politics

The size of the bailout is growing by leaps and bounds. Inquiring minds are asking A $1.8 Trillion Bailout: Where the Money's Going?

—Up to $700 billion to buy assets from struggling institutions. The plan is aimed at sopping up residential and commercial mortgages from financial institutions but gives Treasury broad latitude.

—Up to $50 billion from the Great Depression-era Exchange Stabilization Fund to guarantee principal in money market mutual funds to provide the same confidence that consumers have in federally insured bank deposits.

—The Fed committed to make unspecified discount window loans to financial institutions to finance the purchase of assets from money market funds to aid redemptions.

—At least $10 billion in Treasury direct purchases of mortgage-backed securities in September. In doubling the program on Friday, the Treasury said it may purchase even more in the months ahead.

—Up to $144 billion in additional MBS purchases by Fannie Mae and Freddie Mac.The Treasury announced they would increase purchases up to the newly expanded investment portfolio limits of $850 billion each. On July 30, the Fannie portfolio stood at $758.1 billion with Freddie's at $798.2 billion.

—$85 billion loan for AIG, which would give the Federal government a 79.9 percent stake and avoid a bankruptcy filing for the embattled insurer. AIG management will be dismissed.

—At least $87 billion in repayments to JPMorgan Chase (JPM) for providing financing to underpin trades with units of bankrupt investment bank Lehman Brothers (LEH).

—$200 billion for Fannie Mae and Freddie Mac. The Treasury will inject up to $100 billion into each institution by purchasing preferred stock to shore up their capital as needed. The deal puts the two housing finance firms under government control.

—$300 billion for the Federal Housing Administration to refinance failing mortgage into new, reduced-principal loans with a federal guarantee, passed as part of a broad housing rescue bill.

—$4 billion in grants to local communities to help them buy and repair homes abandoned due to mortgage foreclosures.

—$29 billion in financing for JPMorgan Chase's government-brokered buyout of Bear Stearns in March. The Fed agreed to take $30 billion in questionable Bear assets as collateral, making JPMorgan liable for the first $1 billion in losses, while agreeing to shoulder any further losses.

—At least $200 billion of currently outstanding loans to banks issued through the Fed's Term Auction Facility, which was recently expanded to allow for longer loans of 84 days alongside the previous 28-day credits.

A quick check of the totals shows that is $1.809 trillion dollars that Congress is hell bent on wasting.

Stay tuned in. Very shortly I will have a complete email and fax list for every senator in the country, including a list used by various software programs that will allow blasting every senator at once with a fax.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

http://www.marketoracle.co.uk/Article6403.html

If these statistics are true, all I can say is BARF!

Good to see more groups rallying against this bamboozle.


W

Add another $30 Billion, the feds sent to foreign central banks last night.
Where in the world does this stop?