The financial crisis has taken a heavy toll on the US in just a few months. According to an article published on Forbes.com “CreditSights, a research firm in New York and London, [states that] the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.”
The article goes on: “The Fed also took on tens of billions in debt, including $29 billion in debt of Bear Stearns, and made $60 billion of credit available to American International Group (nyse: AIG – news – people ). It is committing $22.5 billion to set up a special purpose vehicle to manage some of AIG’s residential mortgage-backed securities, and it is financing $30 billion of a second fund to hold $70 billion of multi-sector collaterized debt obligations on which AIG wrote credit default swaps.
The Treasury, in addition to the $700 billion raised in the Emergency Economic Stabilization Act, agreed to guarantee money market funds against losses up to $50 billion, will inject $40 billion of capital into AIG and is backing the conservatorship of Fannie Mae (nyse: FNM – news – people ) and Freddie Mac (nyse: FRE – news – people ), to the tune of $200 billion. The FDIC, meanwhile, is guaranteeing $1.5 trillion of senior unsecured bank debt.”
If you thought the $700 billion bailout package was outrageous, I don’t even want to imagine what you think about this! Is this ok? Do you agree? Discuss your opinion on DebateTheFuture.com.
Image by azrainman under CreativeCommons.
Related news articles:
