Where the $700 Billion Dollar Figure Came From!
 

http://latimesblogs.latimes.com/wash...lout-plan.html


You won't believe where that $700-billion bailout figure came from

Here's something that John McCain and Barack Obama and Sarah Palin and even longtime Washingtonian Joe Biden probably don't know. Not to mention Bob Barr, Ralph Nader and Ron Paul, who usually knows everything.

It's a fascinating footnote to the economic and political bailout debate that's kept so many people from more properly focusing on the pennant races and the Colts' problems in the last week. (Incidentally, do you think we'd have had this big fight if President Bush had called it a "rescue" plan instead?)

Our buddy from two lifetimes ago, Carl Lavin over at Forbes.com, points out a fascinating paragraph buried in a story on his website late last week by Brian Wingfield and Josh Zumbrun.

You know, this $700-billion figure that exploded into evThe U.S. Treasury Dept which was once headed by Albert Gallatin--see statue--a Swiss native and former U.S. representative who invented the powerful Ways and Means Committeeeryday political parlance almost as fast as Sarah?

The $700-billion "cost" of resolving the financial crisis and restoring confidence and liquidity in the credit markets starting this morning?

The $700-billion figure that Senate Democratic Majority Leader Harry Reid first said he could really use McCain's help with, but then the Arizonan took him up on it and Reid suddenly said the Republican would only get in the way and anyway, Reid said, he already had a done deal, except he didn't and the Nevadan ended up being the embarrassed one?

The $700-billion figure that dominated the first part of the first presidential debate of the 2008 general election season between McCain and Obama?

The $700-billion figure that won't really end up being anywhere near the actual cost because no one knows what all those mortgaged properties are really worth now anyway? Which is the whole problem in the first place because the institutions holding that paper don't know the value of what they're holding either, which is why everyone suddenly got so frightened?

That $700-billion figure that won't really last because eventually the feds will sell off what they're buying and might even make a profit in the end as they did with the Chrysler bailout warrants years ago?

You know where that very important $700-billion figure came from?

Here's a quote from that Forbes story:

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

They made it up to be sufficiently ginormous to frighten everyone into rapid action.

And it worked.

--Andrew Malcolm

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Photo credit: U.S. Treasury Department

From the articles I've read from financial experts, they had interpreted the reasoning to be derived from the outstanding mortgage credit that's out there. Naturally, they phrased it better than I can.

But essentially, it was estimated that there was some $14 trillion in mortgages that needed to be covered, and thus they calculated 5% to cover it... which amounts to $700b.

Sounds about right...It's all Monopoly money to them anyways:helpme:warning

Wow, gotta love them!


https://youtube.com/watch?v=_MGT_cSi7Rs

that is one weird way of explaining this mess. I think there must be more to it

Huge numbers!

from here:

http://zfacts.com/metaPage/lib/Iraq-...st-smaller.gif

interesting :thumbsup

Now they are saying that it won't be enough. $700 Billion won't solve the problem. To many loans, and to much paper being held by foreign banks.

Are you a web designer? You seem to be exploding like one. AlienQ meltdown style.

Pass go and collect $200 :D