$8.5 trillion rescue
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$8.5 trillion rescue

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  • Welcome
  • If he looks confused, I am too. Does thing look better upside down? Is up better or is down better?
  • Numbers, statistics, graphs, charts – how to interpret them. Only consolation: it seems the periods of job loss is much shorter than that of net job gains. Unemployment rate may be 6.7% for the whole nation, but if you are unemployed, it is 100% for you.
  • When is more not better – too many models of cars. Would the dollar values of sales look any better than units sold?
  • A jumbo of numbers. Each line items would contain many, many detail items. Four major government entities Better look at a graphical representation.
  • The “big” picture view of what each agency is committing and has allocated so far. Obama’s Public Works (Infrastructure) plan has yet to be added soon.
  • Pink columns are values “spent” or spoken-for so far
  • Looking at each of the 4 government units in more detail.
  • Wall Street, banks, financial and credits market
  • Affects consumers and businesses directly
  • Bush’s Stimulus package looks tiny now that Obama is plotting a $500 - $700 billion Work Stimulation plan Difference is cash to consumers vs infrastructure improvements and programs
  • Insignificant when compared to the other programs
  • When compared to the GDP, the rescue package is quite substantial. Yet, previous and recent expenditures all add up to not even half of the rescue package. These are huge numbers!
  • Details of what’s in the major expenditures – adjusted for inflationary “worth” Both the Alaska Purchase and Louisiana Purchase look so insignificant. The Russians and French will never forget this. The Iraq war will soon catch up with or exceed the cost of Vietnam war
  • Looking at the numbers at the lower side of the spending fence: This puts in perspective the $9 trillion rescue plan’s magnitude The trade deficit is clicking up by $20,000 per second, about $1 billion per day. The budget deficit equals in value the surplus when Clinton left office, except one is negative, the other positive. In other words, we have burnt up one trillion dollars in 8 years
  • Where did all the promised money the Treasury “printed” go? China is the leading holder. We owe a total of almost $3 trillion.
  • Enough bad news. The good news, GDP has always been climbing up at about the same rate in spite of everything else.
  • Even as population grows, the per capita GDP grows proportionally. That’s good news

$8.5 trillion rescue $8.5 trillion rescue Presentation Transcript

  • Welcome to The financial crisis The credit crisis The economic crisis The bailouts
  • What does it all mean? The economy - millions, billions, trillions
  • Is a picture really worth a thousand words? Jobs Lost Sept 403,000 Oct 320,000 Nov 533,000 Total 3 months 1,256,000 Total 2008 2,000,000
  • ◄ Utopia ? ►
  • Back to reality Crisis <=> Bailouts
  • Summary of the $8.5 trillion rescue The big picture $ in Billions U.S. Maximum commitment Tapped so far Federal Reserve $5,671 $2,219 FDIC $1,549 $149 Treasury $947 $577 Housing $300 $300 U.S.A. $8,467 $3,245
  • The $8.5 trillion Rescue Plan
  • Commitments per Agency Proportions (Pie-Chart)
  • Amounts tapped per Agency
  • Details, details
    • Now we examine the numbers for each agency
      • First the dollar figures
      • Followed by the graphics for each
  • Federal Reserve $ in Billions U.S. Maximum commitment Tapped so far Commercial paper program $1,800 $271 Term Auction Facility $900 $415 Other assets $606 $606 Finance-company debt purchases $600 $0 Money Market Investor Funding Facility $540 $0 Citigroup bailout $291 $291 Term securities lending $250 $190 Term Asset-Backed Loan Facility $200 $0 Other credit extensions $123 $87 Discount window $92 $92 Commercial paper program No. 2 $62 $62 Discount Window No. 2 $50 $50 Bear Stearns assets $29 $27 Overnight loans $10 $10 Secondary credit $118 $118 Federal Reserve total $5,671 $2,219
  • Federal Reserve
  • Federal Deposit Insurance Corp. Loan guarantees $1,400 $0 Guarantee to GE Capital $139 $139 Citigroup bailout $10 $10 Federal Deposit insurance Corp. total $1,549 $149
  • FDIC (Fed Deposit Insurance Corp.)
  • Treasury Department Troubled Asset Relief Program $700 $330 Stimulus package $168 $168 Treasury Exchange Stabilization Fund $50 $50 Tax breaks for banks $29 $29 Treasury Department total $947 $577
  • Treasury Department
  • Federal Housing Authority Hope for Homeowners $300 $300 Federal Housing Authority total $300 $300
  • Back to overall situation
  • “ Big” numbers (billions)
  • Past & recent major expenditures
  • “ Small” numbers (billions)
  • Foreign Treasury Security Holdings
  • Is it all doom and gloom? May be
  • US Nominal GDP (billions)
  • US Nominal GDP per capita (billions)
  • Should we be worried?
    • “ Things will get worse before it gets any better”
    • We have been there before and came out of it
    • Have we learned out lessons?
    • Things are very different this time
      • Much, much higher numbers
      • We owe a whole lot more already
      • Several fronts of instability in the world
      • All the world’s nations are in this together
    • We need to help each other out of this crisis
  • © Samuel S. Tan [email_address] Thank you Be contented Be tolerant Be humble Be healthy