The Real Wall Street Bailout Totaled $29 Trillion

Sunday, December 11, 2011
How much did the Federal Reserve really spend to bail out Wall Street? The estimates vary widely, although all of them fall into the trillions.
Fed Chairman Ben Bernanke claims the total was $1.2 trillion. Bloomberg says it was $7.77 trillion, the Government Accountability Office insists it was $16 trillion, and still others put it at $24 trillion.
But L. Randall Ray, professor of economics at the University of Missouri-Kansas City and senior scholar at the Levy Economics Institute of Bard College, New York, argues that the real figure approaches $30 trillion.
“When all individual transactions are summed across all facilities created to deal with the crisis, the Fed committed a total of $29.6 trillion dollars. This includes direct lending plus asset purchases,” says Ray on his blog, Great Leap Forward.
Most of the total comes from two programs, Central Bank Liquidity Swaps ($10.1 trillion) and the Primary Dealer Credit Facility ($8.95 trillion). The Terms Securities Lending Facility and Term Options Program accounted for another $2 trillion and Agency Mortgage-Backed Security Purchases $1.85 trillion.
Central bank liquidity swaps provide short-term loans (one day to three months) to foreign banks. The Primary Dealer Credit Facility was created in March 2008 by the Federal Reserve Bank of New York to provide overnight loans to big firms, such as Goldman Sachs, Barclays, Deutsch Bank and JPMorgan, which buy U.S. Treasury bonds, bills and notes and sell them to the public. This mechanism ended on February 1, 2010. The Terms Securities Lending Facility, also created in March 2008, provided 28-day loans to the same big firms. The agency mortgage-backed security purchase program, covering roughly the same period, propped up security bundles that were backed by mortgages.
-David Wallechinsky, Noel Brinkerhoff


Esti 11 years ago
"he asset bubble of 2000 did not reeserpnt real wealth. You can continue to compare today's household wealth to that artificial figure. All that shows is that wealth on paper in 2000 was not sustainable. It was artificial."that's not really a valid argument.neither was 2006.that has been my whole point all along: that the wealth that the greenspan bernanke bubble era has created has all been fake and has all wound up going away.oddly, i think you just agreed with me.we have been trying to print prosperity for 15 years and it has failed.that was my whole point when this discussion started.instead of prosperity we have gotten poor growth, no real per cpaita wealth increases, and a big debt burden (and do not forget that leverage matters. net wealth of 150k and no debt is far different from 300k in assets and 150k in debt if anything bad happens).my whole argument is that these polices and attempts to control the business cycle have been a dramatic failure.we just get bubbles and busts that keep piling into one another and getting bigger.the .com bubble was the easiest kin of bubble to clean up. like the railroad bubble, it was a bubble in productive assets funded by equity.we swapped it for the hardest kind of bubble (debt funded non productive assets) in the housing bubble.we are now running one in federal debt that is the kind of thing that can wreck a whole society.this is what i am railing against and peak is supporting.he claims that the fed has done a great job controlling the business cycle and creating prosperity and wealth.i think the evidence argues otherwise.we have never seen concatenated bubbles like this. it's coming from somewhere. with money supply growing at 2X nominal gdp, i think it's pretty easy to see where.
LeeMcD 12 years ago
see...who's afraid of the big bad bank?: an uncensored investigation of the us federal reserve banking cartel--one of the most controversial institutions of our time...(self-serving its country since 1913)... also see: the real housewives of tent city (a hot new reality show---global depression edition): and: this [short]: neverminditol-the great recession depression drug and then get up and join those not against capitalism but against rigged capitalism... or at least see chitty chitty bank bank: important to learn abt leveraged buyouyts --lbos vs jobs --wall st banks and private equity firms that enacted a large scale leveraged buyout of america. see lady gaga does lbos [short] ...lady gaga reveals private equity and investment banking's upcoming financial tsunami (caused by mitt romney's bain capital along with other pe firms like kkr and goldman sachs--and the pending lbo credit crash and its impact on the us economy...then join those standing up for you and genuine capitalism--not rigged capitalism and all this cheating and looting of our economy for short term gain. and if you just want someone to blame, try the blame game: but if you want to return our crap money to its source, try fast free online game "take that: a federal reserve crap$hoot stress relief game":

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